Elsevier

The Lancet

Volume 350, Issue 9085, 18 October 1997, Pages 1124-1128
The Lancet

Articles
Effect of organisational downsizing on health of employees

https://doi.org/10.1016/S0140-6736(97)03216-9Get rights and content

Summary

Background

Reduction of personnel by businesses and other organisations (organisational downsizing) is common in Europe, but little is known about its effects on the health of employees.

Methods

We used employers' records to investigate the relation between downsizing and subsequent absenteeism because of ill health in 981 local-government workers who remained in employment in Raisio, south-western Finland, during a period of economic decline (1991–95). Data were separated into three time periods: 1991, before downsizing; 1993, major downsizing in some workplaces and occupations; and 1993–95, after downsizing. We obtained data on sick leave from records kept by the occupational health-care unit in Raisio. We also investigated whether the effects of downsizing were dependent on ten other predictors of sick leave.

Findings

There was a significant association between downsizing and medically certified sick leave. The rate of absenteeism was 2·3 times greater (95% Cl 2·0–2·7) after major downsizing, classified by occupation, than after minor downsizing. The corresponding rate ratios for musculoskeletal disorders and trauma were 5·7 (4·1–8·0) and 2·7 (1·7–4·2), respectively. The effects of downsizing by workplace depended on the age distribution of the staff. When the proportion of employees who were older than 50 years was high, downsizing increased the individual risk of absence because of ill health by 3·2–14·0 times, depending on diagnostic category. When the proportion of employees over 50 years was low, downsizing had only slight effects on health. Other risk factors that increased rates of sick leave after downsizing were age over 44 years, a large workplace, poor health before downsizing, and high income.

Interpretation

Downsizing is a risk to the health of employees. But this risk varies according to individual factors, such as age, socioeconomic status, and health, as well as factors related to place of work, for example, size and age structure of the staff.

Introduction

Downsizing, the reduction of personnel in an organisation, can be an effective tactic to ensure the survival of modern organisations,1 but it may also have adverse effects on the health of those people who continue to be employees. Downsizing can lead to increased job insecurity, changes in the nature of work and the working environment, and a deterioration in the relationship between management and employees.2

There have been few studies of the association between downsizing and health, but much clinical research has been done on the effects of job insecurity. These studies suggest that perceived job insecurity and the threat of redundancy result in anxiety, depression, burnout,3, 4 poor self-reported health status,5 poor quality of sleep,6 an increased rate of absenteeism because of ill health,7 and ischaemic heart disease.8 However, because feelings of job insecurity are to some extent affected by the personality of the individual, they may not reflect accurately the effects of downsizing. Orpen4 reported that although perceived job insecurity was related to anxiety and depression among all employees, levels of anxiety and depression did not differ between employees in jobs objectively assessed as safe or unsafe. Van Vuuren and colleagues9 found that feelings of job insecurity can be attributed not only to downsizing but also to poor managerial decision-making and characteristics such as age, health, and work experience.

We looked at how downsizing between 1991 and 1993 affected the health of Finnish local-government employees. The downsizing in some of the workplaces and occupations was the result of severe economic decline.

Section snippets

Methods

Between 1991 and 1995, Finland faced its most severe economic decline since World War I. Unemployment rose from 3·4% in 1990 to 18·9% in 1993.10 The number of Finnish local-government personnel fell by 1·4% in 1990–91, by 2·7% in 1991–92, by 7·8% in 1992–93, and by 2·7% in 1993–94.10

Our target population was local-government employees of the town of Raisio, in south-western Finland. We used employers' records to identify 981 employees in Raisio who had worked for at least 12 months during the

Statistical analysis

We calculated the number of periods of sick leave and the follow-up period in person-years for each employee. The rate of absenteeism per 100 person-years and the corresponding rate ratios were calculated. Because the number of spells of sick leave is a form of count data, Poisson regression models were fitted to the data.13, 14 Use of the Poisson model implies that the between-employee variance in rates of sick leave is equal to the expected rate of sick leave. When rates of sick leave vary

Results

According to the employers' records, hours worked in Raisio fell by 14·5 between 1991 and 1993, after which time they gradually increased. However, the number of hours worked in 1995 was 10·7% less than that before the decline; this reduction in hours worked was greater among women (16·1%) than among men (9·9%). During this period, the age profile of employees changed greatly. Before the decline, almost a third of hours worked related to employees aged 35 years or younger. After 1993, the worst

Discussion

Our findings suggest that there is a linear increase in the risk of long-term sick leave after downsizing. On the basis of the extensive Whitehall II studies,13, 16 lengthy absence because of sickness seems to reflect accurately the health of employees. In our study, all long spells of absence had been certified by a doctor. We assessed absence according to frequency, a measure more stable and less susceptible to error than other measures of absenteeism.17, 18 If account is also taken of the

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