Employee Layoff Fears Hinder Economic Recovery

LONDON and NEW YORK -

- Survey Reveals Fear Impacts Risk Taking, Decision Making and Customer Service in the Workplace

One in every three employees of companies in the United Kingdom and the United States is very fearful of losing his or her job, and a staggering 98 percent of employees in the UK report having some level of fear about their job security, according to a recent survey by change management consulting firm Stromberg Consulting and conducted by Braun Research. Yet in an interesting twist, on the surface, data suggest productivity may be up overall: 40 percent in the UK and more than half of those fearful in the US say they are working harder as a result.

According to Stromberg Consulting (www.strombergconsulting.com/), a certain amount of tension in the workplace is positive as it can encourage employees to perform better, but at a certain point, the added stress takes its toll on employees’ physical and mental health - which raises the possibility that employees might leave their current place of employment for a lower-stress environment as soon as the economy improves.

Fear Stifles Decision Making

Based on the survey findings, fear is also causing organisation-wide delay in decision making. Across all levels of an organisation, smart risk-taking and timely decision-making behaviours are stifled by fears of a worsening economy. A significant portion of employees of UK and US companies who fear job loss say they are afraid to take risks; 25 percent of employees of US companies believe fear is delaying critical business decisions.

When decisions are finally made, only half of employees believe managers and senior leaders are making the right decisions to position their organisations for economic recovery.

“Managers need to help employees cope with workplace anxiety”, said David Rockland, Ph.D., partner and managing director of Ketchum Global Research Network and Stromberg Consulting. “Fear of job loss can drive increased short-term productivity, but it is not sustainable for an organisation in the long run”.

Fear Impacts Customer Service and Advocacy

Customer service has also been affected by worried employees. According to the survey, 1 in 10 fearful employees say they are less enthusiastic about servicing customers. In addition, almost two-thirds of those who report little to no fear are willing to recommend their company’s products and services; this compares to those who report high levels of fear, of which only 37 percent are willing to recommend their company’s products and services.

“The impact of fear is experienced at all levels of the organisation, from senior leadership to those at the front line serving customers”, said Rockland.

Other findings include: - Only one-third of fearful employees would recommend their companies to others as an enjoyable place to work. This compares to those with little to no fear, of which almost half would recommend their companies to job seekers. - Corporate reputation is being damaged, as employees who strongly fear losing their jobs are more likely to have (and share) negative views about their company’s futures. - Fear impacts everyone regardless of geography, gender, age or income level. When it comes to employee fears, UK and US workers are very similar.

About the Survey

The survey was conducted by Braun Research via phone April 3-10, 2009. In total, 503 employed adults in the UK and 501 employed adults in the US were surveyed, with a margin of error of plus or minus 3 percentage points for the total sample and plus or minus 5.5 percentage points for each subgroup.

About Stromberg Consulting

Stromberg Consulting is a change management consultancy with offices in New York, Atlanta, Chicago and London. A Ketchum company, Stromberg leverages focus on leadership alignment and development, employee engagement and development, organisational design and alignment, and assessment and measurement. For more information, visit www.strombergconsulting.com.

About Ketchum

A communications innovator, Ketchum ranks among the largest global communications consultancies and leads the industry in the UK and continental Europe as Ketchum Pleon. With five global practices - Brand Marketing, Corporate, Healthcare, Food and Nutrition, and Technology - and specialty capabilities that include Access Communications (high- and consumer-tech PR), Concentric Communications (experiential marketing, events and meetings), MMG (clinical trial recruitment), Ketchum Global Research Network, Ketchum Sports and Entertainment, and Stromberg Consulting (change management and workplace communications), Ketchum leverages its marketing and corporate communication expertise to build brands and reputations for clients. In 2009, Advertising Age named Ketchum to its annual “Ones to Watch” Agency A-List, noting the agency’s long-standing client partnerships, digital and disruptive media expertise, and CSR and sustainability programming. For more information on Ketchum, a unit of Omnicom Group Inc. (NYSE:OMC), visit www.ketchum.com.

Source: Ketchum Ltd

Contact: Paul Teuton, +44(0)20-7611-3644, pteuton at strombergconsulting.com