Change is inevitable, especially in the workplace. However, constant uncertainty can breed organizational anxiety, affecting entire teams or even the whole company. HR teams have a key role in recognizing the signs of organizational anxiety and developing strategies to manage it.
Understanding Organizational Anxiety
A 2023 study revealed that 4.05% of the global population, or around 301 million people, suffer from an anxiety disorder. However, anxiety can take different forms. It can be a personal issue, but in some cases, it can show up as a collective workplace phenomenon.
Organizational anxiety is the collective unease or uncertainty employees experience when they feel insecure about their roles or the company’s direction. It manifests across teams, creating a ripple effect that can influence morale, collaboration and overall productivity.
As HR professionals, you are responsible for the well-being of your company’s employees. It’s mostly your duty to recognize and address this phenomenon to ensure employees stay engaged and feel supported, even during change or uncertainty.
What Causes Organizational Anxiety?
Organizational anxiety rarely comes from a single factor. It often results from multiple changes and external pressures, such as:
Leadership Transitions
When your company undergoes leadership changes, like having a new CEO or manager, workers can feel uncertain about how this transition will affect their role. For example, if a new COO takes over, many employees might worry about company restructuring or other staffing changes. They might have experienced similar things in the past or have heard of similar stories from friends or colleagues.
Company Restructuring or Downsizing
Organizational restructuring and downsizing may involve laying people off or transferring them to new roles. Employees could be afraid of losing their jobs. These fears are not unfounded, especially in recent years — 2024 saw 10,000 to 20,000 layoffs each month, causing employees across several industries to fear for their job security.
On the other hand, those who stay in the organization might feel anxious about changes in their workload. Downsizing means fewer people in each department, so those who remain might have to pick up the slack.
Tech Advancements
When a company adopts new technologies, some employees can feel anxious about their ability to keep up. They might be afraid of getting replaced completely and losing their jobs.
These fears are understandable given that 67% of executives would willingly let go of employees for a 50% productivity increase powered by AI. If the company doesn’t put these changes into perspective and offer no training or reassurance, these changes can look like threats instead of opportunities.
Market Volatility
Economic downturns, industry shifts, or geopolitical events can cause market instability. These external changes can affect workers’ confidence in their job stability and the company’s future. For example, if a company continuously experiences low revenue or other financial problems, employees might start worrying about layoffs or a lack of career advancement.
Ambiguous Workplace Communication
Unclear communication about policies, expectations or workplace changes feeds uncertainty. When employees do not know what is going on, they can fill the gap with assumptions or rumors. A lack of knowledge can heighten organizational anxiety, turning relatively small issues into anxiety and a loss of trust in company leadership.
The Effects of Organizational Anxiety
When left unaddressed, organizational anxiety can have far-reaching consequences.
Reduced Productivity
Stress can lead to poor concentration and anxiety. Have you ever tried working while battling a distressing personal issue? Employees might spend more energy worrying about their job or the future than completing tasks, affecting their productivity and efficiency.
According to the World Health Organization, 12 billion working days are lost globally to depression and anxiety, translating to $1 trillion of lost productivity annually.
Increased Turnover Rates
High levels of uncertainty may push employees, including top talent, to seek stability outside of the organization. If people think layoffs or disorganization are on the way, they might want to leave while they can. If they feel debilitating anxiety, some employees may want to resign to prioritize their mental health.
Less Creativity and Innovation
Anxiety can suppress creativity. Employees are less likely to be experimental and take risks if they’re afraid of punishment or losing their jobs. People riddled with organizational anxiety are often afraid to say the wrong thing or offend their superiors. These conditions stifle innovation, stagnating a company’s development and competitiveness.
Negative Workplace Culture
Organizational anxiety can create a toxic culture where people suffer from mistrust, fear and disengagement. A lack of uncertainty fuels gossip and misconceptions, creating unnecessary conflict. Leaders may not be as open to new ideas or are less empathetic to employees’ concerns. This culture can significantly impact employee morale and the company’s reputation.
How HR Professionals Can Address Organizational Anxiety
Organizational anxiety can be challenging. However, you have the unique ability and position to reduce its impact through proactive strategies and best practices.
Communicate Clearly
Trust requires transparency. Work with leadership to ensure teams stay informed about changes, company goals and upcoming challenges. Regular updates, town hall meetings and open-door policies can reduce rumors and align employees with the company’s objectives.
Create Psychological Safety
Companies should create a space where employees feel safe sharing their concerns, ideas and mistakes without fear of judgment or retaliation. You can foster psychological safety by training managers to encourage open dialogue and respond respectfully to feedback.
For instance, managers can schedule regular one-on-ones with team members to check on their progress or talk through their concerns. If you value employees’ voices, they are more likely to stay engaged and resilient.
Engage Employees in Decision-Making
When possible, involve employees in shaping organizational changes. If the company is on the verge of a significant change, tell employees early and inform them of expected events or decision-making processes. You can collect their ideas and suggestions from surveys, focus groups or team discussions. This strategy helps calm their fears and foster a sense of ownership within the organization.
Invest in Professional Development
Research shows that companies that invest in professional development are twice as likely to retain employees. If an employee feels like the company cares about their skills and career, it can be easier to encourage them to stay.
Upskilling and reskilling programs can turn sources of anxiety, like AI adoption, into growth opportunities. Training sessions and workshops can provide teams with the skills and confidence necessary to adapt to new technologies and workflow changes.
Offer Mental Health Support
Providing access to counseling services or wellness initiatives helps employees manage their stress and anxiety on an individual level. Counseling and therapy can be helpful outlets for managing mental health symptoms. These professionals provide a listening ear, empathy and a more objective viewpoint of the situation. Normalizing mental health discussions at work also reduces stigma and encourages employees to seek help when needed.
Sustain Employee Well-Being
Organizational anxiety works silently, but has dire consequences when left unresolved. However, HR professionals have the tools and influence to mitigate its effects. Understanding the root causes of this phenomenon can help you develop strategies to address it head-on, strengthening morale and helping everyone thrive amidst change.
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