Recession = Layoffs – or not?
The Wall Street Journal (via Curious Cat) has an article on companies that refuse to do layoffs despite the crisis.These companies have made a kind of social contract with their employees and explore more creative ways of coping with excess capacity, like transferring employees and using 4-day workweeks.
The article also mentions some of the obvious benefits of layoffs:
Some workplace experts say layoffs are a useful part of the business cycle, allowing employers to weed out poor performers, increase efficiency and promote a high-performance culture. Layoffs “are not inherently bad,” says Mark Nadler, a partner at management consultancy Oliver Wyman’s Delta practice. “Some people…are just more crucial to the survival of the organization than others.”But the downsides are severe too and include loss of productivity and loss of knowledge capital (even in “low-tech” industries, like metal processing).
Lincoln Electric, a Cleveland maker of welding and cutting products, guarantees employment to U.S. workers with at least three years experience, says spokesman Roy Morrow. He says the company, with 9,000 employees world-wide, hasn’t had a U.S. layoff at least since 1949.Is there a premium gained from such altruistic behaviour? Increased loyalty and flexibility come to mind. But, how can one achieve such stability without things becoming too stable – and driving away top performers?
