With the current economic downturn, many companies are reverting to staff layoffs as a solution to budget constraints. Unfortunately, this may not be a wise move.
Staff layoffs can actually cause companies to lose more. Contrary to popular belief, human capital can be very costly. It is important to consider both time and money that was spent on training employees. When companies fire workers, it is usually the costly employees that get affected first. This of course, can always lead to the possibility that a company might not become as efficient and as productive as before, especially considering the fact that the highest-paid are usually the most productive. And ultimately, this can result in bad results.
There are other reasons why layoffs can be detrimental. Fear and anxiety of staff layoff can greatly restrain the creativity and productivity demanded from employees, thereby creating an unproductive atmosphere in the workplace.
Despite these warnings, if companies still decide to carry on staff layoffs, it is important that they look over previous contracts before hastily firing their employees. One instance, an employee sued a company after finding out that the alleged reason for his layoff, "economic troubles", was not necessarily true; the company had gone on a retreat, weeks later, and had enjoyed their stay at luxurious hotels.
This small incident reminds us how important it is to manage our staff carefully. Even when time comes to reducing human capital, it is important that the process is dealt with carefully and delicately. Outplacement, for instance, is a good way to deal with employees. Not only does it show care for the employees but it also boosts the companies' image within and outside and can lead to positive results. Thus, it is advisable to refrain from ending relationships with employees in bitter terms.
Layoffs are just a temporary, short-term solution. In the long run, it is hardly the answer. Today, it is very common for employees to change companies throughout their careers. Thus, it is very important that companies retain and continue to invest in their employees and the company. Ultimately, it will be human capital that saves the company from the economic downturn we have today.
Gemini provides the perfect candidates for employers to bring creativity, efficiency, and productivity to businesses. Furthermore, Gemini provides outplacement services and can help train and embellish employees for the ideal jobs.
For more information, please contact gemhq@gemini.com.hk or call (852) 3552 9100
