Sometimes, layoffs are necessary, says Bidwell. I saw some terrifying graph the other day about how advertising revenues have skyrocketed, while TV advertising is flat and at newspapers they have fallen through the floor. Obviously, if you are a newspaper publisher you cannot go on as you were. But as a cure for corporate ills, layoffs are a chimera that can come back to bite a company. Such was the case a year ago when American Express was making money, but not enough to quell investor concerns.
Employers also often underestimate the cost of layoffs in immediate financial terms, as well as in the lingering burden it places on remaining resources — both financially and emotionally. The toll of layoffs is high. In many industries, layoffs beget lower productivity and profits. When sales are slow, for instance, many retailers cut staff. But several studies show a correlation between bigger staffing and substantially higher sales.
What about profitability? One study that examined a large specialty retailer found that conformance quality how well an employee executes prescribed tasks has a higher impact on profitability than service quality defined as the extent to which the customer has a positive experience. Another consequence of understaffing at this retailer was lowered morale, a finding echoed in other studies. Layoffs are going to reduce costs immediately, says Cobb. Now the firm must incur all these costs to hire and train workers.
Yet in reality there are a lot of costs that layoffs impose on firms that might not show up on an income statement quite as clearly. He expects to have results in a few months. But one recent study indicates that the American worker is becoming increasingly unmoored to the full time employer.
The percentage of workers engaged in alternative work arrangements — temps, on-call workers, contract workers and freelancers — rose from The study, released in March, shows that workers hired out through contract companies showed the sharpest rise, increasing from 0. What is clear, Cascio notes, is that plenty of firms have handled internal and external stresses without resorting to layoffs, and come out the other side with positive results.
He points to Southwest Airlines, which, like the rest of its industry peers, suffered during the Great Recession. And as the economy recovered they transitioned back to their original jobs. Another approach was taken by Steve Jobs, Cascio says, who took advantage of downturns to focus on innovation. The way layoffs affect the economy varies from the industry that is doing the layoffs and the size of the layoff.
If an industry that employs a majority of a region suffers and has to lay employees off, there will be mass unemployment in an economically rich area. This can have leave ripple effects nationwide. Unemployment is the biggest effect on the economy that can come from layoffs. LinkedIn: linkedin. The coronavirus has forever changed the way the world operates without a doubt. This is also true for the workplace. The pandemic has affected everybody regardless of role, location or industry in one way or By Takudzwa Vannessa Machingauta.
Employee loyalty is the willingness of one to make personal sacrifices for an organization. A loyal employee is not always actively looking for alternative jobs. The Loyalty Research Centre, an Indianapolis-based consultant that focuses on By Keithly Tongai.
The Nearly 75 percent of executives surveyed by organizational By Munodiwa Zvemhara. When employees join an organisation, they need to understand how the business operates and how they, as employees, will be expected to contribute and behave within the organisation.
Joining a new organisation for an employee By Tatenda Sayenda. Every organization understands that customer experience is important. Equally important is the notion of Employee Experience. Article By Takudzwa Vannessa Machingauta. Menu Menu. Free Resources. Join the other subscribers who get our new posts by email. Subscribe for Articles Now. Follow HumanCapitalHub. I am kindly requesting for the latest salary survey reports quotes. Related Articles. But the German bank is by no means an outlier.
Even in the context of a tight American labor market and a historic economic expansion , major US-based organizations have continued to make sweeping job cuts. Wells Fargo let go of 26, over the course of three years, and General Motors laid off 14, Mass layoffs like these tend to disappear fairly quickly from the mainstream news cycle, grabbing headlines for just a few days.
It should be no surprise that layoffs can cause deep harm to the people who experience them. Sometimes companies need to cut costs. Sometimes, as with Deutsche Bank, they need to change strategies. They always need to survive, lest they go under entirely. He suggests that layoffs, like cigarettes, should come with a warning label, designed to shift the stigma surrounding job loss from the workers who are victims of it to the executives who see human suffering as the unfortunate cost of doing business.
Job security was the norm in the US for much of the 20th century, and it still is in many European countries. Mass layoffs are in fact a fairly recent phenomenon, emerging for the first time in the late s. In the span of just a few decades, Americans came to accept frequent, large-scale layoffs as the price they have to pay in a dynamic global economy, a mindset that impacts blue-collar and white-collar workers alike. While automation on Wall Street and reduced demand for investment bankers means that some of them will have trouble finding new jobs, they are nonetheless extremely well-paid, well-educated people with presumably a fair amount of social capital and, hopefully, some savings.
But the news of the Deutsche Bank cuts offers a timely opportunity to ask whether the pain that mass layoffs inflict upon workers of all stripes is, in fact, necessary, and to discuss how American workers resigned themselves to the idea that the employers to whom they dedicate one-third of their waking lives have a right to quickly dispose of them the moment their continued employment becomes inconvenient.
The prevailing view in the US through the midth century held that government had a responsibility to ensure full employment, with federal spending on infrastructure as a way to fill in gaps when the job opportunities in the private sector were insufficient.
How much similar jobs in your area pay. Especially for highly productive people who receive just a few dollars per hour over minimum wage, it's essential to pay slightly more than your competitors do. Especially when times are tough, you don't want to lose the best of those understandably penny-conscious employees because they can earn an extra 30 cents an hour down the street.
Unfortunately, most small employers never grasp this lesson, paying the industry standard to the sales clerk who works twice as fast as the norm. Again, it's far better for employee retention, overall productivity, and workplace happiness to reward your most productive employees. How much others with comparable skills are paid in your company. Your employees will have no trouble accepting substantial pay disparities as long as in their eyes they reflect real differences in skill, training, seniority, and job responsibilities.
But dissatisfaction will quickly surface if employees conclude that one person or group receives substantially better pay or perks for no honest business reason—or worse, for a bad reason. This is not the place to tackle the details of complicated pay equity issues, such as differing pay rates for different departments, individual vs.
But it is important to grasp just how essential it is even for employers with just a handful of employees to create logical, understandable, and defensible pay policies and modify them only when objective new factors require it. How much the boss's pay and perks are. Especially when you are asking your employees to work extra hard in an economically fraught environment, it's crucial that you not offend them by exempting yourself from your austerity program.
And unless you are happily married to your bookkeeper, don't think you can pay yourself lavishly or reward yourself with secret perks and keep it secret.
Employees of successful small businesses are almost always imbued with a strong sense of purpose. It doesn't matter if you make or sell booties, bibles, or bagpipes—the key is to imbue your company with a commitment to excellence, something that is especially important to maintain when a business is struggling financially.
There are several tried-and-true methods to help your employees believe in the value of their work. But no amount of cheerleading will work unless they really see that you run a high-quality operation.
If you do run a quality operation, helping your employees create and participate in a larger vision will go far toward cementing their loyalty.
No question it can be tougher to do this when you are fighting for every dollar, but it's not impossible. We're reminded of a veterinarian who not only ran the cleanest, most efficient animal care operation in town, but even when business flagged in an earlier recession, actually carved out the hours necessary to allow employees to participate in a variety of free animal rescue and support activities.
As a result, the vet attracted a terrific crew of employees, people who were so pleased to be part of a committed business that many of them stuck around for years. When people have been laid off or if employees expect them to be , many of your employees will be fearful.
Will they be laid off next? Will the business be sold? Declare bankruptcy? It's no secret that if allowed to fester, these kinds of worries can have a seriously negative effect on your business. Productivity drops when people are distracted and anxious or spend work time on online job sites , and your best employees may leave for what they perceive to be greener pastures.
To counter this, you need to honestly communicate how the business is doing, whether the news is good or bad. We hope you made a good start when you laid people off, when you explained to everyone the economic facts you faced. Now you should follow up with a weekly finance report. Don't give employees just a bunch of raw financial numbers and hope they make sense of them.
Also give them the context that will let them understand exactly how your business is coping with the downturn, and tell them everything you are doing to increase sales. It's simple, really: Employees strive to do better when they know their hard work and creative contributions are noticed.
This is even more important when business is grim and you are asking everyone for a little extra. In this context, those employees whose good work isn't acknowledged are likely to conclude that there is no point in busting their butts. So whether you have five, 55, or employees, develop an employee appreciation program.
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