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How Social Media Helps Enterprises During Hard Times and Layoffs

In my last blog, Rise of the Social Media Function, I focused on how companies need to best organize their marketing team(s) to leverage social media to connect with prospects, customers and their markets. I’d like to add another dimension to this discussion: social media within your own corporate community. I’ve invited Caroline Dangson, IDC’s Social Media Research Analyst, to provide her insight and perspective on this important area.

“Thanks Michael.

Hardly a day goes by without a company announcing layoffs. The U.S. jobless rate in February marked a 25-year high of 8.1%. Organizations are scrambling to hold on to business under incredibly limited resources. The workloads of 651,000 jobs lost last month are now being picked up by the workers who remain. This means an incredible shifting of roles and responsibilities within American businesses. And with that, a shift that is disrupting information flow within the enterprise. Information is money, and the loss of information that occurs with the loss of employees is doubling the economic impact on businesses. IDC estimates that even before this recession businesses were losing an average of $3,300 per year per employee due to ineffective information searches, poor and inconsistent access to tools, recreation of content that already exists, reformatting/versioning and multipublishing/multiformatting (source: The Hidden Costs of Information Work, IDC #217936
). Furthermore, an IDC knowledge worker survey showed that employees typically spend the equivalent of one work day (6–10 hours) each week searching for information (source: IDC #212580). Businesses can hardly afford to lose more time, money and productivity these days, not to mention employee morale. IDC believes internal social networks to connect employees can help with all of the above.

Social networks make it easy for participants to share unstructured and ad hoc information that can decrease the time it takes to find information to solve problems. Social networks also encourage employees to help each other. This will foster improved morale among employees and help take the strain off of overwhelmed and understaffed IT departments. Member profiles containing a record of recent activities and publications on social networks aid in locating colleagues who can help with specific issues. Once members are connected via the social network, their conversations persist and are searchable. The digital trail of message exchanges will create a repository of useful information employees need. Because the conversation is persistent (as text), it is possible to read or query the log instead of soliciting information from each participating member. Quite often workers operate in their own silos trying to solve the same problem. A social network can help connect these people to the answer in its one-to-few and one-to-many function. Things learned from one conversation can be shared with everyone. You may also discover some unknown talents or expertise from the most unexpected people in your company that are now being leveraged.

A few MIT studies of workplace productivity link worker productivity to information flow. What they refer to as ‘digital networks’ enhance information flow among employees according to these studies. In the most recent study, MIT researchers discovered that workers who participate in a digital network were 7% more productive than workers who did not participate in a digital network (MIT study as quoted in Harvard Business Review, February 2009). While at first glance this may seem small, every percentage counts these days.

More importantly, perhaps, social networks connect people. There could not be a more important time than now to help reduce the doom and gloom of the work environment after layoffs. Feeling connected to
coworkers creates a more comfortable work environment where individuals support one another and become more vested in the company. Some companies are even extending internal social networks to employees that are laid off as a way to keep in touch and possibly rehire them when the market improves. According to Anne Berkowitch, CEO of SelectMinds, rehiring former employees through an alumni network has reduced the money and other resources her clients typically spend on recruiting, interviews, and training. In fact, Berkowitch says the money saved from five to 10 rehires can pay for the cost of licensing social networking software for one year. Of course, there are also free tools such as Ning, LinkedIn Groups and Yammer that employees can start using today.”

Thanks Caroline. Please feel free to comment below, or you can contact Caroline directly at

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