A 2023 survey of more than 35,000 workers revealed that more than half are worried about the economic environment and how it may impact their job security. 37% of employees say they are concerned about losing their jobs. Younger workers are among the most anxious along with those working remotely. According to Harvard Business Review, remote workers were 32% more likely to feel anxiety over job concerns, and two-thirds said it affected their performance.
There are regular reminders about job losses, layoffs, and closures in the news these days, so it’s no surprise that workers are feeling unsettled. Whether that worry is justified at a company or not, businesses may be fueling the fear.
Some workplaces even create environments where people fear losing their jobs as a way to motivate workers and reduce costs. While there may be some short-term benefits to this approach, like employees working harder, research shows that this practice does not improve performance over time. Plus, the additional stress it creates can lead to greater turnover, especially with high performers who have other opportunities.
What Is Job Insecurity?
With job security, workers feel comfortable knowing they have employment in the future. However, job insecurity is the opposite. Employees fear being fired or laid off with no warning, losing their income and benefits. In a tight economy, they may also be worried about not being able to secure another job quickly, adding to the stress.
When people worry about losing their jobs, it can hurt your business — even if the fears are false. Often, job insecurity concerns may have more to do with the economy in general or industry changes, such as the impact of automation or artificial intelligence tools.
While employers can’t promise employees they’ll have a job forever, businesses can help to reduce employee concerns. Failing to do so creates significant risk.
The Risks of Ignoring Job Insecurity
When fears are high, businesses aren’t likely to get the best work out of their employees. Despite efforts by HR teams, organizations may see lower productivity and struggle with employee retention. Other risks include:
- Higher levels of absenteeism
- Difficulty in attracting top talent
- Lower morale and turnover
- Employee burnout
Employees fearful of losing their jobs may also stop working toward team goals and focus on individual performance to make themselves look better than their colleagues. This can create additional stress and distrust within the organization.
Additionally, when workers have high levels of job insecurity, they are less likely to follow workplace rules. Despite greater motivation to adhere to company rules, a Harvard Business Review study found that many workers feel as though their behavior won’t make a difference. So they’re prone to break rules more often.
For workers, lack of job security can also manifest itself in other ways. For example, job insecurity has been linked to mental health concerns and increased risks of hypertension, coronary heart disease, ulcers, back pain, and more.
The Benefits of Improving Job Security
Conversely, the benefits of improving job security for employees has significant benefits, including:
- Increased employee engagement and motivation
- Higher levels of productivity
- Improved talent attraction and hiring
- Improved reputation
When employees aren’t worried about their jobs, they are also more likely to be innovative and take risks.
How Businesses Can Promote Job Security
How can companies actively promote job security to realize these benefits? Here are some proactive ways to ease fears and promote a more productive workplace.
Prioritize Employee Welfare and Benefits
While companies must focus on business objectives, they can’t afford to forget that their workers are the ones driving their businesses. When employees don’t believe their employer cares about their welfare, job insecurity increases.
Companies should make employee well-being, satisfaction, and growth a priority. Such an approach requires a consistent effort to build a fair and inclusive culture throughout the organization, and it can pay dividends. Companies with a strong culture see 72% higher employee engagement levels than their peers.
As part of managing employee welfare, companies need to offer a strong benefits package that demonstrates how companies value their employees. Some of the most common benefits include:
- Medical, dental, and vision insurance
- Wellness programs
- Life insurance, including long-term and short-term disability
- 401(k) retirement plans
- Health savings accounts (HSAs) and Flexible spending accounts (FSA)
- Employee assistance programs (EAPs)
Companies should invest the time to understand the benefits employees want most. The right mix of voluntary benefits can go a long way to easing concerns.
Open communication channels are key to reducing job insecurity worries. Ensuring that employees know what’s happening in your business and industry helps assure them that you are making the right moves to remain competitive and adapt to new challenges. Even if things aren’t going well, keeping your employees informed shows respect.
Despite companies saying they have open-door policies, just 7% of employees strongly agree that they get accurate, timely, and open communication in their workplace.
Rather than wait until employees leave or engage in quiet quitting, employers may want to engage in stay interviews and one-on-one discussions with employees to understand how workers feel. Such interviews help build a culture of trust, especially if you can address some of their concerns.
Encourage Team Cohesion
Job insecurity often leads to employees looking out for themselves, which can harm a team environment. Working collaboratively is crucial to success. Employees who work together are 64% more likely to complete tasks versus those working by themselves according to a Stanford study.
When teams collaborate, it can help create a bond between employees. Close-knit teams work more productively and have greater job security. This creates a sense of belonging.
Give Employees a Sense of Purpose
Employees worried about their jobs often feel that their work no longer has meaning. Providing a sense of purpose helps overcome this. Companies should remind employees what they do and how it benefits others. When employees have a clear understanding of how their contributions make a difference, they are more engaged in their work.
Some ideas to embed this sense of purpose include:
- Sharing positive customer feedback to show employees how real people are impacted.
- Explaining career paths and advancements to demonstrate how work leads to rewards.
- Asking for employee input on business decisions so they feel heard and valued.
The more employees feel their work has meaning and purpose beyond a paycheck, the more committed they become, despite external job market fears.
Invest in Training and Development
Another key to combatting job insecurity is investing in training and development. Career development planning, as part of performance management, can demonstrate an investment in employees. This helps them improve the skills they need to excel in their job and prepare for advancement.
Cross-training employees also helps broaden their skill set and makes them more valuable to the company. At the same time, employers benefit from more highly-skilled workers who can fill in the gaps during vacation or when jobs are open.
Mentoring, coaching, and ongoing education also enable employees to grow and give them more confidence in their employer. When workers believe their company cares about their future, they are more likely to be loyal and less worried about losing their jobs. So, ensuring employees see a career pathway for upward mobility in pay and/or role helps create more optimism about their future.
Employees may also fear for their jobs because of changes in their lives. A new mother may be concerned about losing advancement opportunities because of time off. Remote workers may fear missing out on in-office interactions, which could make them more expendable. Employees who need time off to care for an aging parent or deal with health concerns may be anxious about asking for time off.
By accommodating life changes with some flexibility, companies can alleviate these job insecurity fears. For example, you might allow employees to shift to different work schedules or work remotely for part of the time. Ensuring remote employees have equal access to promotions or offering return-to-work programs after major life events can demonstrate empathy and help employees feel more secure in their jobs.
Avoiding Job Insecurity
Job insecurity can derail even well-run companies, creating an atmosphere that impacts performance. Companies need to effectively manage their workplace to avoid unwittingly creating job insecurity. By creating an open, caring, and collaborative culture, businesses can help reduce fears about job loss. In turn, companies that do so are generally rewarded with greater productivity, reduced turnover, and happier — more engaged — employees.
Resourcing Edge empowers companies to focus on success. As an industry leader in human capital management solutions, Resourcing Edge helps businesses of all sizes manage the burden of employee oversight. Providing administration and consultation with HR, payroll, benefits, recruiting, compliance, and technology, Resourcing Edge is a leading Professional Employer Organization (PEO) dedicated to helping businesses grow.
Contact Resourcing Edge today to see how they can help your business succeed.