Two thirds of workers don’t receive enough information when their companies go through change such as layoffs, increasing the risk of misconduct, according to research by CEB.

CEB's research shows failing to tell employees in advance about organisational changes – such as a change in senior leadership – increases misconduct by 42%.

Companies that communicate with employees ahead of new initiatives and those which consistently reiterate the importance of ethical behaviour will see the smallest increases in misconduct when implementing change.

Unsurprisingly, the report cited reducing pay and benefits as the most risky form of change, tripling the risk of bullying, discrimination and abuse of alcohol or drugs. Reducing variable pay such as bonuses is most likely to lead to data privacy violations, while asking employees to take on new roles and responsibilities they said "more than doubles the risk of insider trading".

The cost of failing to communicate with employees is potentially huge. Companies that communicate effectively with their employees provide shareholder returns of 7.9%, while companies without effective communication deliver just 2.1%.

Maarten Westermann, senior director, CEB said: “The employees participating in our survey work at large, global companies across industries. What we found was that, independent of industry or size company, employees experienced a lot of change in the past years – on average, two massive change moments, such as layoffs, reorganisations, leadership changes or big mergers. Without intervention, these changes have significant impact on employee morale, engagement and motivation, which affects a company’s productivity and retention. Worse, these changes went hand in hand with increases observations of misconduct as well as decreased perception of integrity.

“A good example of mitigating the harsh effects of change is proper communication and guidance – for example, we learned that communicating change before it happens, not just by the top executives, but especially by middle managers, highlighting in their message the importance of integrity, has a great positive impact on employees’ morale and ability to cope with the change”.

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