While more employers are using “quiet cutting” to motivate workers to leave on their own terms instead of being terminated, the practice has mixed results, according to a report by Zetwerk.
“The practice of ‘quiet cutting’ has been stirring up conversations in the business world,” the report reads. “Quiet cutting involves employers reassigning employees to different roles, hoping they will quit independently, thereby saving the company the cost of severance.”
To study the issue further, Zetwerk surveyed more than 400 business owners and over 600 employees from various industries regarding the practice.
“The results offer important insights into how quiet cutting affects today’s workplace. Business owners are both leaders and decision-makers when it comes to complex human resources practices like quiet cutting.” The findings “shed light on how business owners perceive and implement quiet cutting in their organizations.”
Business owners provided four reasons they used quiet cutting — performance management (73%), cost savings (42%), reorganization (33%), and employee turnover (16%).
“Nearly 1 in 4 surveyed business owners admitted to using quiet cutting methods,” according to Zetwerk. “The most common reason for using the strategy was performance management (73%), which may explain why businesses quietly cut entry-level employees (53%), and mid-level workers (40%) most often. To enact the practice, reassigned employees were most frequently moved to less strategic and visible roles (35%), call center jobs (35%), and positions with non-traditional hours (33%).”
However, using quiet cutting to reduce costs was not always successful. Business owners still ultimately terminated 34% of reassigned employees. As a result, 30% of surveyed owners considered the practice sustainable.
“Furthermore, only 25% of all business owners surveyed thought quiet cutting was more effective than hiring new employees, and 80% believed offering severance was the more professional approach,” the report shows. “While quiet cutting has its proponents, 76% of business owners did not use the practice. Reasons for not quiet cutting were deeply rooted in company culture and ethics, with 68% of non-participating owners valuing transparent communication with employees. Another 54% of owners viewed quiet cutting as unethical and against company values.”
Indeed, instead of reassigning workers, business owners favored using management skills to improve employee performance instead of reassignments. More than two in five surveyed preferred evaluations and feedback, and 34% believed training and support are more effective tools.
“Owners were also concerned about the impact of quiet cutting on employee morale and the company’s reputation. Of business owners who quietly cut, 42% were concerned the practice might negatively impact their business and future hiring. Saving money on severance packages may not outweigh the costs of a tarnished image or potential legal repercussions, not to mention the costs of replacing employees.”
From employees’ viewpoint, quiet cutting is not uncommon. A third of survey respondents said they had been subjected to the practice, and half knew a co-worker who had been quietly cut. Among those who had been reassigned, 62% didn’t like their new roles. In fact, the experience was so adverse that 39% eventually quit.
“But they weren’t going quietly,” Zetwerk says. Twenty-eight percent “left a negative company review after the experience. The negativity also extended to co-workers still at the company, as 62% of respondents who saw co-workers quietly cut said it made them feel negatively toward their employer. Overall, half of employees who saw quiet cutting in their workplace felt betrayed by their employer, and 47% were motivated to leave.”
It was not all bad news for those who had been quietly cut, though. According to Zetwerk, 57% learned new skills, 15% were moved to higher positions and 9% received pay raises. Still, given a choice, 56% of employees said they’d rather be fired.
Among the respondents to the survey, 36% worked in information technology, 27% in engineering or manufacturing, 11% in health care, 8% in retail, and 8% in education. The remainder worked in other industries.
