The years 2009 and 2010 witnessed the downsizing and restructuring of the healthcare sector in North America. Elsewhere the governments have been struggling to reduce deficits at a time of worldwide economic recession. Hospital downsizing, reflected in the termination of some employees, reflects a breach of employee trust in the employer-employee relationship. This article examines the relationship between downsizing efforts undertaken by the healthcare sector and its perceived threats to job security among the nursing staff.

Employees who themselves might not be facing any threats to their job security in their present organizations, are certainly aware of these threats to others. First and foremost, the worldwide economic recession increased the number of people who lost their jobs and remained unemployed. Second, the media covered details of job losses throughout 2009 and 2010. Thus, in the UK for example, the new government reduced levels of public sector spending that eliminated 500,000 public sector jobs. Health services were spared in these cuts but it is likely that nursing staff in the UK have family members or friends who will lose their jobs as a result. In addition, the 500,000 public servants aware of the looming job losses do not yet know if they will be the victims. In Canada, surveys of employees taken in late 2010 found that more employees are valuing security and stability as a response to the recent worldwide economic recession. In addition, a recent newspaper story cited a research study by a Canadian company indicating that if Canada signed a free trade agreement with the European Union, 150,000 Canadian jobs would be lost. Thus, job insecurity is likely to have increased among individuals working in organizations likely to reduce their workforces as well as among employees aware of the job losses going on around them.

There has been a parallel increase in research on job insecurity following increases in organizational restructuring and downsizing in the late 1980s and early 1990s. Sverke, Hellgren and Naswall (2002) conducted a meta-analysis and review of job insecurity and its consequences. They considered short-term or immediate reactions to job security/insecurity as well as long-term reactions to job security/insecurity and consequences of the same for individuals and for the organizations. Short-term individual reactions to job security included job satisfaction and job involvement; while long-term individual reactions included mental and physical well-being. The researchers also found significant effects of job insecurity, which included diminished levels of job satisfaction, job involvement, lower mental and physical health, lower organizational commitment and trust and increased intentions to quit. Job insecurity had mixed effects on job performance. These reviews of literature provide convincing evidence that job insecurity is almost always associated with adverse individual reactions. Some of this work indicated that job insecurity was heightened by organizational changes, personal and work situation demographics such as employee age, marital status, parental status and level of education, as well as individual personality traits such as locus of control, self-esteem and job involvement.

Effective Executive Magazine, Hospital Downsizing, Healthcare Sector, Economic Recession, European Union, Organizational Commitment, Organizational Restructuring, Government Departments, Psychosomatic Symptoms, Work Engagement, Job Satisfaction, Hospital Management.