In the Jungle

Employees in the Downturn: Part 1

Before I left for my weekend shenanigans, I met with Christy to take stock of the week. As we wrapped up our chat, she handed me a research brief recently published by SHRM. “Maybe you can mention this on your blog next week,” she explained. I agreed to take a look at it and mention it at some point.

However, after reading through it, I realized that this report on employee reactions to the recession (subscription to SHRM is required, sorry) raises a few interesting questions. In fact, this single brief contains so many interesting findings that I decided to spend more time on this than I expected. Given the number of potential discussions, I will break this feature up into a number of different entries over the coming week.

I will start this series of discussions with a particularly puzzling finding: SHRM indicates that fewer people expect to renew their job search activities once the economy recovers. Really? Why? I am not often stumped by human behavior, but this one threw me for a loop, at least initially. Employees everywhere have had to do more with less as a result of this economic downturn. They may have had to take a pay cut or reductions in benefit contributions; others may have seen the elimination of employee-sponsored childcare services. If you work for the City of Chicago, Mayor Daley has repeatedly asked you to take unpaid time off. Heck, even HRPuffnStuff was recently talking about employers eliminating coffee service for their employees (gasp!). [Note: Thankfully, the president of our company is still lavishing us with fresh Starbucks coffee… seriously; a thank you note is in order.]

Under normal circumstances I would expect these cutbacks to result in reduced organizational commitment and job satisfaction. This in turn would lead to an increase in job search intentions and behaviors. Clearly, these are not normal circumstances. If I was a betting man (Texas Hold ‘Em, anyone) I would have lost quite a bundle. So, how do we explain this counter-intuitive observation? More importantly, how do we learn from this?

My best guess draws liberally from attribution theory (a vibrant and very interesting research area in social psychology). Simply put, people are inclined to seek the causes to events they observe; people attribute observations to some causal agent. In western cultures we are predisposed to seek entities as causal agents, usually people, but sometimes organizations. Something about our culture leads us to under emphasize environmental or contextual factors that contribute to events we observe. For instance, we might observe that Suzy was late to work one morning. We can attribute this lateness to the fact that Suzy is lazy, but we could also attribute it to unusually heavy traffic. Our preference for explanations (correspondence bias for the psychology geeks out there) can be short-circuited by powerful or particularly salient (attention-grabbing) contextual factors. In this case, the economic maelstrom has been discussed so heavily in the popular media and other sources that it may have become salient enough to shift our attribution biases. I think employees see the pay cuts, layoffs and other uncertainties as a function of the business environment, rather than their organization. If it is the organization’s fault, then employees are more likely to retaliate by searching for a new job. However, if these undesirable outcomes are caused by the environment, who would they retaliate or recoup their economic losses?

If this explanation has some merit (and I think it does), then one can apply this lesson to reduce the impact of future outcomes that may impinge on employee’s economic interests. Strong transparent communication effort can highlight he contextual factors enough to shift the attribution away from the organization in turn reducing unwanted turnover. [Note: This doesn’t mean we can abuse this technique; knowledge should be used responsibly]

I can think of a few more explanations, but I will let this one sink in for a bit. What do my readers think? Am I full of it? Can you think of other reasons the data might look like this?