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Wednesday
Oct052011

Common Wisdom is wrong on short term layoffs:



...companies may rely too much on the crutch of layoffs, which just exacerbates the recession. What's worse, many layoffs have dubious value. A Bain & Company study from the early 2000s recession concluded laying people off can be expensive. As the study's authors reported in the April 2002 Harvard Business Review, if you refill a job within six to eighteen months, you lose money on the deal. The drag on earnings, they said, includes; severance packages, temporary declines in productivity or quality, and rehiring and retraining costs that more than offset the short-term wage savings. Badly handled layoffs also destroy morale. To stay strong, to find opportunities to cut costs in smart ways, and to get creative about the future, you'll need everyone on board. So undermining morale may not be a great idea right now. In many cases, there's another way.


Green Cost Cutting: Five Ways to Get Lean Now,  Andrew Winston



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