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Published Veröffentlicht 08/12/2022

Study shows corporate layoffs have lasting impact on brand reputation

Nearly one-third of Americans say news coverage of a company’s layoff has directly impacted their perception of the brand (31%), a recent Allison+Partners study shows.  

Simply put: The influence of media is inevitable. And as news of recent layoffs in the United States floods the media, it leaves behind a trail of companies that consumers, competitors and employees will examine. It will also simultaneously cause pause for brand communicators who might face this kind of decision-making.  

As data analysts within a communications firm, we decided to take the pulse of the current layoff landscape, uncovering what it means to U.S. consumers and how brands can, and should, react if the time comes.  

We found buyers are watching closely to see how companies approach layoffs – with more than a quarter indicating they pay more attention to the news now given the recent influx of layoffs (29%). A misstep could have lasting implications for your customer-brand relationship. As is the case with any heightened economic environment, the need for corporations to understand their core audiences and to use data, not assumptions, to inform decisions has become incredibly important.  

Here are three ways that Allison+Partners’ Performance + Intelligence (PI) team can step in to help organizations do just that using our Suite of Corporate Health Solutions. Together, these approaches can help business strategists keep their finger on the pulse of employees, clients and overall brand reputation. 

Measuring Brand Health in a Crisis and Beyond 

With 40% of Americans saying their perception of a company would be negatively impacted after employees are laid off, understanding the health of your brand before and after a potential layoff becomes a fundamental organizational diagnostic tool.  

What’s more – if a company releases a public statement that feels inauthentic following its layoff, 45% of consumers indicate their view of that company’s core values and mission would be negatively impacted. Roughly 40% would have a negative view of the company’s leadership if employees are laid off in a manner consumers feel is improper. 

Those are major pieces of a brand’s identity at stake

Establishing a strategic, ongoing, brand health program allows you to establish benchmark data, uncover opportunities, avoid potential problems and face the ripple of market perception that comes hand-in-hand with layoffs. In the event of a crisis or competitor announcement, quickly fielding a survey to target audiences and comparing these results to existing benchmarks can help a brand determine the short- and long-term reputational impact, along with any opportunities to minimize damage.  

This kind of perception measurement needs to reach across all stakeholders, including listening to customers and employees’ voices – both current and prospective. 

Managing the Ever-Changing Customer Experience  

More than 90% Americans are aware of the layoffs impacting employees in the United States right now. With the breadth of coverage and attention layoffs attract, it becomes a matter of when, not if, news will wind up in front of a current or prospective customer. 

In fact, they want it that way. Only 14% of consumers don’t think a company should have to release a public statement about its layoffs – leaving the large majority demanding answers. Most often, they want brands to release a public statement on their corporate website (33%); in a press release or in comments issues to journalists (33%); on their corporate social media channels (28%); or at a live event, such as an earnings call or press conference (28%). 

When that announcement is made, 62% of consumers say it is important brands provide transparency behind their layoffs, while 40% demand a timely announcement. 

It’s simply the reality of today’s Information Age. Customer expectations are at an all-time high, and brand experiences are no exception. In these times, brands must actively evaluate their customer base to understand – and quantify – any pain points present in their day-to-day brand interactions, so these processes can be reevaluated, solutions ideated, and the overall brand experience improved. 

The impact of layoffs echoes into this experience. More than 50% of Americans indicate their likelihood to purchase from or use a brand is impacted if they believe that company poorly managed a layoff. And 52% of these Americans warn they would stop purchasing from such a brand, even if they were already frequent customers. 

By arming themselves with Customer Experience data, brands can better predict these kinds of reactions and increase customer lifetime value. After all, when you deliver the experiences people need, they reward you with both their business and their loyalty.  

Keeping Sight of Employee Experiences Both Present and Future 

As A+P PI Senior Vice President Katie Malark recently stated, “employees are the first touchpoint” for customers and “active ambassadors for the brand itself.” When approaching reputation management scenarios like layoffs, these voices must not be bypassed.  

And with nearly 25% of Americans feeling uneasy about their current job due to recent layoffs, employers need to lend an ear. 

A great way to accomplish this outside of an annual Employee Experience (EX) survey is through internal pulse surveys. These can be fielded at regular intervals leading up to, during and after a difficult decision, such as employee layoffs, to help company leadership gauge internal communication expectations, leading anxieties, confidence in longevity or maintained belief in core values – among other foundational elements. 

Yet, as data analysts, we know all too well listening without action is a moot point. In fact, in our consumer layoff study, we found 25% of Americans want their employers to address the current layoff landscape with employees. That’s why our team of analysts works closely with strategists within Allison+Partners’ Corporate and Reputation Risk teams to help brands translate these EX-related data points into actionable next steps that can be shared with internal audiences – bridging the gap between understanding and accountability. 

Though it may seem counterintuitive to do so in economic uncertainty, brands also need to think past maintaining employee morale to retention and future recruitment. Today’s employee environment is not so separate from that of tomorrow. 

Case in point: 25% of working Americans and those currently unemployed but looking for work say recent layoffs have expedited either their job search for their next position or their retirement – the former most often planning to move to a company they feel is more recession-proof (55%). An overwhelming 62% of consumers indicate a poorly managed layoff would impact their likelihood of working for the brand in the future. 

In the end, it comes down to establishing a truly holistic Experience Management (XM) program, capable of pushing brands through the noise and pressure of a potential crisis and coming out on the other side with your head held high and ample data to guide you. 

Methodology: Allison+Partners Performance + Intelligence surveyed 1,000 U.S. consumers over the age of 18. The survey was fielded using the Qualtrics Insight Platform and panel was sourced from Lucid. Fielding was executed in December 2022. 

Brooke Fevrier is a research manager on the Performance + Intelligence Team who lives and breathes consumer sentiment and behavior mapping, turning data patterns into strategic insights and effective communication tactics for clients across all industries.  

Olivia Witt is a research and data analyst on the Performance + Intelligence Team, specializing in quantitative methodologies and developing custom measurement solutions, which help clients show up smarter. She is the driving force of the engineering behind the Allison+Sports Earned Performance Sports Scorecard.  

Performance + Intelligence at Allison+Partners is a dedicated team of experts who work to collect and decipher data in order to help organizations spot strategic opportunities, take smart risks and show clear outcomes.  

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