Effect of organisational downsizing on health of employees

Abstract

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. 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. There was a significant association between downsizing and medically certified sick leave. The rate of absenteeism was 2.3 times greater (95% CI 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. 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.