What impact does redundancy have on future careers?

Redundancy is often a difficult experience for the employees involved. Financial pressures, feelings of failure and betrayal are commonplace. With the right support and advice these sentiments can lessen and to a degree disappear as people find new employment. However, for some individuals, the experience of being made redundant has a longer-term impact on their ability to build strong relationships with future employers, whether they are conscious of it or not.

Penna conducted a research project into the longer-term effects that being made redundant has on one's future career motivations, relationships with future employers and whether it impacts the various generations differently. The findings proved to be extremely interesting, particularly at a time when organisations face twin dilemmas – managing organisational change as well as maintaining the loyalty and motivation of key talent.

Unsurprisingly, the area most significantly impacted by redundancy is the psychological contract between employer and employee. The contract between the former employer and the employee is often completely destroyed. This has obvious implications for the organisation that is making someone redundant, but also has consequences for the recruiting company, as employees are more guarded and less trusting.

Loyalty is similarly affected. Self-protectionism increases as individuals switch from being loyal and committed to their employer to being loyal to themselves. High engagement levels that were founded on trust and loyalty decline as employees develop a more transactional interaction with their employer.