Research has long shown that layoffs have a detrimental effect on individuals and on corporate performance. The short-term cost savings provided by a layoff are often overshadowed by bad publicity, loss of knowledge, weakened engagement, higher voluntary turnover, and lower innovation — all of which hurt profits in the long run. To make intelligent and humane staffing decisions in the current economic turmoil, leaders must understand what’s different about today’s larger social landscape. The authors also share strategies for a smarter approach to workforce change.
Layoffs That Don’t Break Your Company
Today layoffs have become companies’ default response to the challenges created by advances in technology and global competition. Yet research shows that job cuts rarely help senior leaders achieve their goals. Too often, they’re done for short-term gain, but the cost savings are overshadowed by bad publicity, loss of knowledge, weakened engagement, higher voluntary turnover, and lower innovation, which hurt profits in the long run. This article looks at better ways to handle changing workforce needs that make sparing use of staff reductions and ensure that if they do happen, the process feels fair and the affected parties have a soft landing. Most successful approaches begin with a philosophy that spells out a firm’s commitments and priorities, establish methods for exploring layoff alternatives (such as furloughs, retraining, and reassignments), and determine options for three scenarios: a healthy present, short-term volatility, and an uncertain future. As firms like AT&T, Michelin, Honeywell, and Nokia have learned, thoughtful planning helps organizations address workforce transitions and cope with a shifting economic landscape far better than layoffs do.
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Layoff University, Vol. 2: Progress Made, Lessons Learned - excellent notes
Reflections from my first month of unemployment
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