Alternatives to Layoffs
Thursday August 7, 2008
Here we go again. The least sign of trouble and companies start looking for ways to cut costs. That's good. But why do they always start at the wrong place? Sure, cutting employees is a quick way to cut costs, but it is not an effective solution. The initial financial savings look good. However, when you start adding in the hidden costs like lost revenue, lower production from reduced morale, and brain drain to your competitors, the savings drop. Add that to the "one time charge" for severance packages and unemployment payments and it disappears.
Fortuntely, there is a better way. There are Alternatives to Layoffs.
Layoffs are a sign of failed management. Toyota is a good example of a company that knows the importance of managing well and not using layoffs as a attempt to cope with failed strategies.