Most Employers Say They Consider Alternatives to Layoffs
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Most Employers Say They Consider Alternatives to Layoffs
PHILADELPHIA, PA – December 6, 2011 – Two out of three human resource executives say they always explore the alternatives before laying off any employees, according to Right Management, the talent and career management experts within ManpowerGroup.
HR Executives from 150 organizations participated in a webinar and online survey conducted by Right Management and Littler Mendelson, a national firm specializing in employment and labor law.
Sixty-eight percent of the webinar participants reported that they always consider ways to avoid layoffs, while 28% seldom do so, and just 3% never do.
“All employers should take a look at the alternatives to layoffs available to them,” said Michael Haid, Right Management Senior Vice President for Talent Management. “Frankly it surprises us that as many as one-third concede they seldom think about other options. Of course, organizations face intense cross-pressures. Wall Street wants to see dramatic steps to control costs, while the workforce wants support and continuity.”
Littler’s Business Restructuring Practice Group Co-Chair, Gerald T. Hathaway believes HR professionals are often unaware of what could be done in order to minimize outright separation. “There are a myriad of ways to cut people costs without having to cut the people themselves.” Hathaway noted them:
- Furloughs
- Reassignments to other positions
- Reducing hours
- Across the board salary reductions
- Offering exit incentives
- Hiring freeze; freeze on promotions
- Reducing/eliminating employer match to 401(K)
- Bonus reductions/eliminations
- Health insurance adjustments
- Reducing/eliminating contractors
- Adding contractors
- More stringent control over expenses, particularly travel and entertainment
According to Hathaway, such alternatives, while not without pain and sacrifice, nevertheless convey a commitment to employees, and as such, promote engagement and performance. “Hasty staff cutbacks, on the other hand, tend to unnerve remaining employees and the resulting harm may take a long time to undo.”
Sometimes organizations announce a major layoff, Haid added, but the reality may translate into fewer actual terminations. “For instance, some layoffs are projections and may include posts to go unfilled, expected attrition, retirements and buyouts.”
According to Haid, best practice is to make certain all alternatives are weighed before implementing staff cutbacks. “We know from experience and research that the remaining workforce also suffers. Productivity may drop, service quality decline, absenteeism increase, customer loyalty wane, and even the organization’s reputation may be tarnished. All this ultimately affects the bottom line.”
“On a positive note, it’s encouraging to see more organizations considering redeployment rather than layoffs,” noted Haid. “Frequently, organizations are restructuring to improve efficiency and reduce costs, so it’s often the case that one part of the business is growing while the other is experiencing a strategic divestment. Talent moved from one part of an organization to another may benefit from a shorter ramp up time and smoother transition than with new hires.”
About Right Management
Right Management is a global leader in talent and career management workforce solutions within ManpowerGroup. The firm designs and delivers solutions to align talent strategy with business strategy. Expertise spans Talent Assessment, Leader Development, Organizational Effectiveness, Employee Engagement, and Workforce Transition and Outplacement. With offices in over 50 countries, Right Management partners with companies of all sizes – including more than 80% of the Fortune 500 – to help grow and engage their talent, increase productivity and optimize business performance.
About Littler Mendelson
With over 825 attorneys in 52 offices, Littler Mendelson is the largest US-based law firm exclusively devoted to representing management in employment and labor law matters.
Media Contact: Shari Fryer, Shari Fryer & Associates, shari@fryerassociates.com, 970-846-6607.
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