2024-11-06 15:53:00
Hardly a day goes by without reports of widespread job cuts in the economy. In order to counteract the negative consequences of workforce reductions such as stress, anxiety or declining work morale, more and more companies are relying on strengthening internal company communication with the LOLYO employee app from the Graz-based company cycoders.
Unfavorable economic situation causes standstill
The Austrian economy will only recover slowly from the recession in 2024. Although inflation contracted in August 2024 and companies welcomed the agreed rate cut, the almost one percent year-on-year decline in GDP in the first half of the year clearly shows that the economy is still far from growing. A positive turnaround is not expected in the coming months either.
Staff reduction factor – danger or opportunity?
The economic weakness is also reflected in the situation on the labor market. The reason for this may be the unfavorable order situation in industry and the construction sector. Due to the economic situation, it has become a necessary consequence for some companies to decide to reduce their workforce. Although such restructuring can create new opportunities for a company, it far too often causes uncertainty and fear among the remaining workforce.
Fears cost companies a lot of money
The consequences of these negative feelings can be devastating for all parties: morale deteriorates and declining productivity, increased stress and the risk of burnout creep in and paralyze daily operations. Alexander Ahammer and his team from the Economics Institute at the Johannes Kepler University Linz conducted a study on the psychological consequences for the remaining employees. One of the findings: Within a period of one and a half years after the companies examined had reduced their workforce, there were 6.8 percent more medication prescriptions and 12.4 percent more hospital days, the economist mentioned in the APA interview in 2022. The fact that these fears can cost employers a lot of money was also shown in a study by the Cologne University of Applied Sciences in 2000.
Stronger retention and productivity through employee app
However, these states of anxiety can be counteracted with a single communication tool, explains cycoders managing director Thomas Mörth: “Speaking directly via the employee app creates a deep trust in the company management among employees. This trust not only pays off in times of economic success, but also shows its particular value in crisis situations when comprehensive information is crucial. The importance of networking with the entire workforce becomes particularly clear here, as rumors and fears can be caught and dispelled at an early stage.”
A communication tool that inspires participation
Over 300 companies in more than 15 countries already use the LOLYO employee app and benefit from the trust gained, which is reflected in better employee retention and increased productivity. The renowned research and consulting company Gartner also confirmed that employee apps generally contribute to improving employee experiences. But what added value exactly does the LOLYO employee app bring? In addition to the more efficient completion of work trips and improved on- and off-boarding that creates transparency, fairness, support and feedback opportunities, its primary advantage is the unbeatable features that inspire employees to get involved.
This is what the MACH EMPLOYEE app does
The LOLYO employee app motivates the entire workforce – from the office to production to the field service – and connects them directly with each other via smartphone. This is made possible by the clear user guidance, the simple handling and the unique PARTICIPATION booster, which ensures that all employees actively participate. This ensures that important information actually reaches everyone. As a future-oriented social intranet, LOLYO offers over 30 valuable features in the basic version, such as the employee recruiting tool or the automation tool. This makes LOLYO an indispensable support for those responsible for internal communications, which contributes to the employer brand in the long term.
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**Interview with Thomas Mörth, Managing Director of cycoders**
**Interviewer:** Thank you for joining us today, Thomas. With the ongoing reports of layoffs and economic uncertainty, how do you see the impact of these workforce reductions on employee well-being?
**Thomas Mörth:** Thank you for having me. The impact of layoffs on employee well-being can be quite significant. In our current climate, we’re seeing increasing levels of stress and anxiety among remaining employees. Layoffs don’t just affect those who are let go; they ripple through the entire organization, leading to a decline in morale and productivity.
**Interviewer:** You mentioned that these emotional states can cost companies a lot of money. Can you elaborate on that?
**Thomas Mörth:** Absolutely. Research from the Economics Institute at Johannes Kepler University showed a marked increase in medication prescriptions and hospital days among employees after layoffs. This is a clear indicator of deteriorating mental health, which can lead to increased absenteeism and decreased productivity—ultimately costing companies far more than they might save through workforce reductions.
**Interviewer:** It sounds like communication can play a crucial role in this scenario. How does your employee app, LOLYO, facilitate better communication?
**Thomas Mörth:** Yes, communication is key. With LOLYO, we enable direct dialogue between employees and management. This kind of transparency fosters trust, which is especially important in crisis situations. When employees feel informed and valued, they are more likely to remain engaged and productive, even in challenging times.
**Interviewer:** Given the current economic climate, what advice would you give to companies looking to navigate these challenges while maintaining their workforce morale?
**Thomas Mörth:** My advice would be to prioritize internal communication. Engage with your employees regularly and provide them with updates on the company’s direction and any changes in the business environment. By leveraging tools like our LOLYO app, companies can create an atmosphere of trust and reassurance, which is essential to maintaining morale during downturns.
**Interviewer:** Thank you, Thomas. It’s clear that proactive communication can help mitigate some of the effects of layoffs and economic uncertainty.
**Thomas Mörth:** Thank you. It’s important to remember that while the economic situation is challenging, there are ways businesses can support their employees through enhanced communication and engagement.
**Interviewer:** Appreciate your insights today, Thomas. Thank you for joining us.
