Updated: Aug 14
Author(s): Elaine Boulougouris
With increased uncertainty in our lives throughout the past few years, it's no surprise that job insecurity has become even more prevalent. Between market crashes, inflation, companies going out of business, and an impeding recession, job insecurity, which can be defined as the worry of losing employment, is at an all-time high (Sverke et al., 2002).
Although job insecurity may seem like a good tactic to increase employee performance, research has shown that its effect is only short-term. While employees feel motivated to show they're crucial to their company, they often prioritize work that isn't a high priority, but more noticeable to management. In addition, said employees often try to avoid violating any rules. This avoidance leads to increased hidden errors and distraction on the job, as well as the fear of providing feedback and making suggestions to management. The effects of job insecurity are severe and have been increasingly shown throughout the past few decades (Hassard et al., 2018).
Feelings of job insecurity leads to withdrawal from the workplace. Employees who have higher perceived job insecurity don't spend as much time creating social resources in the workplace as their colleagues. This is referred to as crafting. Crafting includes creating a support network when feeling overwhelmed. Employees who believe they are more likely to lose their job also fear losing their network; therefore, they disengage as a protective mechanism. This creates a negative cycle, as those experiencing stress could benefit from support (Breevart & Tims, 2019). Socially withdrawing isn't the only way that those experiencing job insecurity are withdrawing from the workplace. The connection between health and job insecurity is strong. Research shows these individuals are more likely to experience anxiety and depression, one of the leading causes of absenteeism (Vander Elst et al., 2016). Moreover, prolonged feelings of job insecurity have been linked to heart disease, sleep issues, weight gain, and substance use. Health of the company has been shown to deteriorate as well. Employees with higher perceived job insecurity display an increase in counterproductive workplace behaviour and mistrust. Those experiencing perceived job insecurity and thus the effects were more so permanent employees rather than contract or temporary (Ma et al., 2019).
Due to the pandemic, the labour market is evolving. There is a never seen before trend of job insecurity being at an all-time high, while the great resignation persists. This is because workers are beginning to value their time more and seek out jobs that often provide more of the factors that contribute to increased job security. This trend will exacerbate the need for job security for both employees and organizations struggling with retention.
Although it is almost impossible to eliminate job insecurity due to constantly changing economic and organizational factors, as well as job insecurity being perceived differently by everyone, there are steps that organizations can take to reduce the effects.
Transparency is crucial to employees’ sense of job security. When employees feel that there is a lack of communication and transparency within their organization, they feel it is a psychological breach of contract (Ma et al., 2019). Organizations should implement regular meetings to discuss the financial situation of the company and its strategies with timelines. Providing employees with this information will allow them to feel at ease and understand the current situation to properly make decisions. If employees feel that their job is insecure, they could choose to pick up a new skill to become more employable, put more savings aside, and arrange caregiving for their children, for example. Employers should also encourage transparency from workers, as it was found that those who feel job insecurity are less likely to make suggestions and provide feedback to management. Encouraging is not enough; organizations should implement various ways for employees to share their thoughts. This can include one-on-ones with their boss, coffee chats, brainstorming meetings, and anonymous submissions.
Wellness and Life Initiatives
It's no secret that job insecurity is linked to poor mental and physical health. Implementing wellness programs will allow employees to pause and lower their stress levels. More typical programs including yoga and mindfulness sessions are helpful; however, additional tools are recommended. Implementing information sessions that are relevant to life topics, specifically on managing finances, will provide employees with the resources they need to help them feel more prepared in case of unfortunate events. It is important to note that offering these sessions are not enough. Organizations should ensure workload is manageable and create time for employees to attend.
Job Crafting, Growth, and Development
As those experiencing job insecurity are typically withdrawn from their job, implementing job crafting has shown to increase feelings of engagement. Job crafting essentially gives employees control over their tasks and relationships at work (Wang et al., 2018). Implementing mandatory check-in meetings for employees and management to discuss employee goals and interests to develop a plan will encourage job crafting. Employers should try to be as flexible as possible in changing tasks. However, job crafting is mostly the initiative of the employee. Organizations should be supportive and allow employees the time to form relationships with employees in other departments that may interest them, as well as create and/or participate in new initiatives. Expanding on job crafting and growth and development opportunities are extremely beneficial to those experiencing feelings of job insecurity, and the prevention of those who feel secure. It has been found that employees with basic employability face fears of job insecurity more than their peers who have higher levels of education and training (Bernstrom et al., 2018). Said employees are focused on staying in their current position or advancing at the same company. Providing these opportunities for these employees will not only help reduce these fears, but also provide benefit the organization by investing in loyal employees.
It is important to keep in mind that with all the recommendations provided, there are certain populations of employees who are more vulnerable to feelings of job insecurity. While there are personal factors that can increase vulnerability that aren't always seen, such as someone being the sole provider in their household, there are many external factors to be aware of. Employees who are temporary, have lower employability, and work in an industry that is often hit hard by turbulent economic times tend to experience feelings of job insecurity more often. Being aware of this can help organizations target certain populations of its workforce in their initiatives.
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