Recessionary actions and absence: A workplace‐level study

• DOI: http://doi.org/10.1002/hrm.22008
• Author: George Michaelides,Stephen Wood,Chidiebere Ogbonnaya
• Published date: 01 November 2020
• Date: 01 November 2020

ORIGINAL ARTICLE

Recessionary actions and absence: A workplace-level study

Stephen Wood

1

| George Michaelides

2

| Chidiebere Ogbonnaya

3

1

University of Leicester School of Business,

Leicester, UK

2

Norwich Business School, University of East

Anglia, Norwich, UK

3

Department of Management, University of

Sussex, Brighton, UK

Correspondence

Stephen Wood, University of Leicester School

of Business, Brookfield, 266 London Road,

Leicester LE2 1RQ.

Email: s.j.wood@le.ac.uk

Abstract

Actions such as work restructuring and wage and employment freezes taken by orga-

nizations in response to recessions are widely assumed to decrease employees' job

security and detrimentally affect perceptions of management's trustworthiness. We

assess whether these effects occur and if, in turn, they affect workplace absenteeism.

Using data from Britain's Workplace Employee Relations Survey 2011, we show that

the effects on stress-based absence are limited and not as predicted, but the effects

on withdrawal-based absence are strong and as predicted. Reductions in well-being

or job security's effect on well-being did not affect absence, and while the reduction

of trust perceptions' effect was to increase anxiety, anxiety did not increase but

reduced absenteeism. The effects on withdrawal absence differ: those of recession-

ary action through job security reduce absenteeism, while those through trust per-

ceptions increase it, both as predicted. The two effects involving trust perceptions

are less pronounced when recessionary actions are accompanied by voluntary lay-

offs, but not by compulsory layoffs. The implications for management are that they

should be more conscious of the effects on absence when planning recessionary

actions, and more generally their effects on presenteeism.

KEYWORDS

absenteeism, downsizing, job security, layoffs, restructuring, stress, trust

1|INTRODUCTION

Research on recessionary actions—actions taken by employers in

response to recessions or austerity—has looked chiefly at downsizing

and organizational restructuring. Often, the actions considered have

not been taken as direct responses to recessions, and typically have

not included all potential responses to them. Nonetheless, the studies

have shown that these actions have negative effects on employees'

attitudes and well-being (Allen, Freeman, Russell, Reizenstein, &

Rentiz, 2001; Bennett & Durkin, 2000; Brockner et al., 1986;

Campbell-Jamison, Worrall, & Cooper, 2001; Chadwick, Hunter, &

Walston, 2004; Grunberg, Moore, & Greenberg, 2001; Moore,

Grunberg, & Greenberg, 2004; Probst, 2003; Quinlan & Bohle, 2009;

Van Dierendonck & Jacobs, 2012; Wanberg & Banas, 2000). It is typi-

cally assumed that the attitudinal and well-being effects of downsizing

will be manifested in behavioral changes, but these changes have

been less studied.

The most studied behavior is absenteeism, with most research

revealing an increase following downsizing (Bourbonnais, Brisson,

Vézina, Masse, & Blanchetter, 2005; Firns, Travaglione, & O'Neill,

2006; Kivimäki, Vahtera, Pentti, & Ferrie, 2000; Vahtera et al., 2004;

Vahtera, Kivimäki, & Pentti, 1997; Westerlund et al., 2004). These

studies focus on correlating downsizing with individuals' absenteeism,

but this has been at the expense of three issues. First, insufficient

attention has been given to absence as a collective phenomenon,

affected by organizational policies and norms and employees making

joint decisions, and how absence may spread by contagion. Second,

the potential for absence to fall as downsizing or other recessionary

actions reduce employees' job security has been neglected. Third, lit-

tle attention has been given to the mediators of the downsizing–

absence relationship. Indeed, Johns (2009: p.12) identified a need,

which remains unfulfilled, to examine the mediators of this relation-

ship. This is important if we are to understand the mechanisms

through which recessionary actions lead to changes in absence levels

DOI: 10.1002/hrm.22008

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and how their effects may differ between mechanisms. For example,

we might expect a reduction in job security consequent on recession-

ary actions to reduce absenteeism, while the associated psychological

strain might increase it.

We report a study that confronts these gaps in the literature by

focusing on the effect of recessionary actions on absence levels, and

examines, both theoretically and empirically, the mediators of this

effect. We concentrate on how recessionary actions may reduce

employees' perceptions of job security and trustworthiness of man-

agement, both of which have been considered as explanations for

negative effects on well-being in the downsizing literature (Arshad &

Sparrow, 2010; Kalimo, Taris, & Schaufeli, 2003; Lόpez-Bohle, Bal,

Jansen, Leiva, & Alonso, 2017; Lόpez-Bohle, Chambel, & Iriarte, 2018;

Sinclair, Sears, Probst, & Zajack, 2010, p. 13). Research by Lόpez-

Bohle et al. (2017) confirmed the role of these processes in explaining

the effects of downsizing on job performance, while Arshad and Spar-

row show similar effects on organizational citizenship behavior. How-

ever, their potential role in explaining the links with absenteeism has

not been explored. We hypothesize that job security and trust percep-

tions, independently, may firstly mediate a relationship between

recessionary actions and well-being; in turn, well-being influences

workplace absenteeism and hence increases what De Boer, Bakker,

Syriot, and Schaufeli (2002) call strain- or stress-based absenteeism.

Job security and trust perceptions may also, independently, mediate

the relationship between recessionary actions and workplace absen-

teeism, and hence increase De Boer et al.'s contrasting type of absen-

teeism, withdrawal absenteeism. However, the effects of job security

and trust perceptions on withdrawal absenteeism may vary. The

effects of recessionary actions solely via trust perceptions may

increase absenteeism as a retaliation in response to perceived injus-

tice, and thus be consistent with the increasing absenteeism observed

in the downsizing studies. The effects via job security may work in the

opposite direction and result in reduced absenteeism as employees

feel that being present at work is important even if they are less com-

mitted to the organization.

We open with an account of these various routes through which

recessionary actions may affect absenteeism. We then report a study,

using data from Britain's Workplace Employment Relations Survey of

2011 (2011 WERS), that is designed to assess the hypothesized medi-

ated relationships and the various routes through which recessionary

actions may affect the two types of absence, stress-based and with-

drawal absence. We conclude by drawing out the implications of the

results for theory and policy.

The research makes four main contributions that address some of

the gaps in past research. First, it focuses on unit-level absence,

whereas downsizing studies have addressed individual-level absence.

Second, we develop a set of complementary hypotheses regarding the

mediators of recessionary actions on workplace-level absenteeism.

Third, the results make a significant contribution to the evidence base

on both workplace absence and the effects of the post-2008 reces-

sion, using a large representative sample that covers the full range of

private and public workplaces (and occupations) across the British

economy. Fourth, it contributes to correcting the imbalance in the

stress literature—and perhaps more generally in human resource man-

agement scholarship and practice—in which the emphasis is on job-

level stressors (excessive workloads and low levels of autonomy and

support), an imbalance that public bodies have highlighted.

The National Institute of Occupational Safety and Health (2002) of

the United States and the Health and Safety Executive (2009) of the

United Kingdom both emphasized the importance of organizational-

level stressors, which arise from a mixture of policy, top management

leadership style, culture, legislation, bottom-up emergent processes,

and events such as downsizing and recessions, and not just job design

(Wood et al., 2019).

The study uses data from 2011 WERS, which is a matched

employee–employer survey, and was collected as the post-2008

recession period was ending (UK Government, 2011). Distinctively,

the data include questions on employers' responses to the recession

and employees' exposure to these responses, as well as the intensity

of the impact of the recession on the workplace.

2|CONCEPTUAL BACKGROUND AND

HYPOTHESES

2.1 |Recessionary actions

We define recessionary actions as a specific form of organizational

change taken in response to a recession or to austerity policies, which

are likely to affect employees' experience of work. These may include

layoffs, wage freezes, recruitment moratoriums, increasing workloads,

reorganizations, cuts in employee benefits, reduced working weeks,

and decreases in training expenditure. In stressor–stress theory terms,

they are stressors as they alter the demands placed on employees or

reduce the resources at their disposal, such that we would expect

adverse effects on employees' well-being and, in turn, on their behav-

ior (Demerouti, Bakker, Nachreiner, & Schaufeli, 2001).

Recessionary actions are typically associated with cost-cutting.

They are often perceived by managers to be capable of improving an

organization's performance more quickly than is possible through

changes targeted at increasing revenue. Downsizing implies reduc-

tions in employment levels, and hence layoffs, and generally also

entails other changes, such as work reorganizations. Nonetheless, a

concerted response to recessionary pressures need not include

layoffs—these are just one option—and employment reductions can

be achieved by not replacing leavers (natural wastage). As our study is

of employees who survived layoffs, we separate layoffs from other

recessionary actions on the grounds that employees are directly

exposed to recessionary actions but only experience lay-offs indi-

rectly. Both are nonetheless potential organizational-level stressors

that affect employees who remain after a process of adjustment to

recession.

Prior to the 2008 recession, there was little direct discussion of

recessionary actions as a set. The focus on downsizing meant an

emphasis on reducing staff numbers (Datta, Guthrie, Basuil, & Pandey,

2010). Although the studies collectively reveal downsizing's negative

502 WOOD ET AL.