Employee confidence continues to decline, reaching the lowest level since data collection began in 2016, according to a March 4 report based on Glassdoor’s Employee Confidence Index.
Although other economic indicators are improving, workers are still skeptical about their employers’ prospects. The share of employees who reported a positive six-month business outlook fell to 45.1% in February, dropping from 45.7% in January.
Layoffs, in particular, appear to be driving some employee concerns, particularly in the tech and media industries. In Glassdoor reviews, mentions of layoffs are up 12% for tech employees and up 25% for media, as compared to a year ago. During the last two years, mentions of layoffs have increased 358% for tech employees and 214% for media.
“More surprisingly, discussions of layoffs in tech are actually higher in February 2024 than even during the worst of the pandemic,” Daniel Zhao, a lead economist and senior manager on Glassdoor’s Economic Research team, wrote in the report. “Measurably, layoffs (even in tech or media) are not as deep as they were during the pandemic, so why is discussion so widespread?”
Zhao pointed to two reasons. First, former employees who mention layoffs in their reviews, who were likely laid off, rate their employers’ business outlook positively only 10% of the time. In contrast, current employees who mention layoffs, who may have survived a round of layoffs, rate their employers’ business outlook positively about 20% of the time. This number has fallen from 25% a year ago, he noted.
“This suggests that even employees who were not laid off are becoming increasingly pessimistic about their employers’ prospects whether because of their opinions of the overall economy or their direct experience with anxiety, lower morale or burnout after a round of layoffs,” Zhao wrote.
In addition, even employees who don’t mention layoffs have reported a decline in business outlook, Zhao wrote. That means the drop in employee confidence isn’t solely linked to anxiety among employees in a handful of companies or industries undergoing layoffs. Instead, concerns are more widespread.
Although it’s possible the worst of the wave of layoffs are over, employee trust in leadership has declined dramatically, according to a survey of HR pros by Challenger, Gray & Christmas, Inc. Employers are dealing with perceptions of inefficacy, inconsistency and poor communication, HR pros said, and workers are attributing their burnout to leadership as well.
Ongoing layoffs in 2024, particularly in the tech and transportation sectors, likely indicate that employers are still adjusting to a post-pandemic reality, Nick Bunker, head of economic research for Indeed Hiring Lab, told HR Dive. Although the announcements may seem troubling, most industries remain stable, he said.
For employers, open and honest communication remains key for supporting retained employees amid layoff conversations, according to a report from McLean & Co. Sources have suggested HR pros can train and support managers to care for workers, create opportunities for emotional support and provide professional development to close skills gaps.