I came across this article in New York Times by Prof. Robert J. Shiller, professor of economics and finance at Yale and co-founder and chief economist of MacroMarkets LLC. Here is what he talks about:
In a period where lots of people are being laid off due to economic instabilities, many corporate managers try to clear out the less important employees at once (so that they do not need to do the same again), and they keep the “core” team members. Then what is needed to be done is keeping these members happy and fully paid.
However, remaining workers must work harder, taking on some of the work of their missing colleagues, and productivity rises. They also feel guilty that they are kept in the organization and some of their friends were let go. Also, they work strictly in track of the regular work process. A manager says, “There is more uncertainty, and everybody is afraid. Do your job. Keep employed. Don’t come up with a new idea.” In his own company, the manager said, “Everybody is doing the same thing.”
So, new problems arise. Decreasing company’s expenses for personnel services might increase productivity, but maybe it is not going to be a long-term trend. Performance of remaining employees might go down because they are required to accomplish more than they used to, their colleagues are gone, and they cannot try new things in their job.
What can be a better solution? Not ending too many people’s job at once seems logical. I think decreasing everyone’s salary in a small percentage and trying to keep as many as people working in the company might be considered. Trying to change working times –assigning part-time or project-based work to each employee every so often so that they come and work when they are really needed might be an alternative, too.
You can read the article here:
Isil Nart
Having survived a round of layoffs and being around when everyone experiences an incresed workload my feeling is that cutting everyone but the core cannot be an effective long term solution. Over time people will become demoralized and it can lead to burnout and an increase in turnover, which can add to costs (cost of new hires and training). As a short term solution it does make sense, but for me the question is - why does it seem like companies are not willing to really try new ways of cutting costs? So, in essence I agree with you.
ReplyDeleteI'll pose a further question - how will Unoversal Healthcare change the job market? If people can find affordable healthcare outside of their job will people be more willing to work part time? Will that decrease company overhead costs? Will this significantly shift wage distributions? I think the implications of Universal Healthcare on the American Workforce have yet to be fully understood.
-Ken
I agree with Isil and Ken, there has to be a better way. I have also been involved with company lay-offs but with the government. I do not see why other alternatives, such as, pay cuts or flexible time could not have been used. I believe people would be more willing to these types of changes instead of being let go. More collaboration ought to be used when big decisions have to be made, I am burned out by doing more with less, but you have the choice of being burned out or leaving. In these times most people are grateful to have jobs, so they do whatever they can to keep them and keep the company afloat.
ReplyDeleteThe NY Times article by Shiller mentions that private companies should take lessons from the government, but the government is cutting jobs just like everyone else. They are not looking at who does the job the most efficient, they are cutting people without looking at credentials which makes it worst for the workers left behind.
Victoria Warren