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Friday, May 15, 2009

Lay off, will ya?

Please don't be alarmed at the title of the post. It is not intended to scare you away, but merely to capture your attention.

Yes, these are tough economic times, and things look uncertain, if not downright bleak for the future. Job security is dipping, and many folks don't really know if their jobs will survive the recession. Various companies across the world have been forced to 'right-size' which is nothing but a euphemism for downsizing or laying off employees.

Understandably, people who've been laid off tend to harbour bitterness for their former employers. However, do companies really like to chop off their human capital? I was rather incensed to read a set of articles on a popular website. In this 'shocking chronicle of work experiences' - as the site calls it, laid-off workers have expressed their opinions, and largely their angst against their respective employers.

I agree that it is a shocking chronicle - not because it is sad to see this happen but because it seems people were working in tandem with nasty bosses, 'inhuman' working conditions, low salaries et al, without complaining earlier. But, the moment they lost their jobs, their employers became cold and heartless creeps.

As someone who has worked in the training industry for long enough, and is now pursuing an MBA in HR, I can assure you that laying off employees is not as plain as number-juggling for companies. The decision to let go of productive workers is never easy, and almost never illogical. A lot of thought is given to each such move.

A normal BPO company spends nearly Rs. 200,000 for each employee (including salary, travel, training costs, medical insurance, and other benefits) for two months of training. And then, takes another 6 months to break-even on that employee. So, for the first 8 months, the company actually spends money on you, and then begins to earn. And if after that, it fires you, it has to spend the same amount of time/money in getting another person to do your job.

Also, unfortunately enough, layoffs are not always performance-based. A person does not have to be a poor employee to lose his/her job. Sometimes, companies decide to stop focusing on certain strategic initiatives or on some dimensions of work, because they no longer add value. In a boom scenario, the displaced employees are absorbed by other departments. In a recession, they may be asked to go.

As an example, let's say that you have a housemaid who takes care of cleaning you house and another one who takes care of washing your clothes. Now, you feel that you can probably save the recurring cost of the one who washes clothes and the time spent in washing/drying, by investing in an automatic washing machine. So, you let go of her services despite the fact that she was brilliant at her job . However, the one who cleans the house is still employed, even though she absents herself regularly, and does not quite have great performance.

That's a rather crude example, but then that's pretty much how layoffs happen. However, even though it could be tough, my advice to people who have lost their jobs is to not lose confidence, but to try and find something that fits your skill sets.

And to websites that post grim and morose tales like this, my suggestion is to post articles on alternate employment options, or how to cope with such a situation. I really fail to understand how reading someone's sordid tale will help, if I've been laid off.

Perhaps, an extra dimension that employers could add - arrange for counselling sessions for laid-off employees. Yes, it is a cost, but maybe you could look at it as something like your corporate responsibility to make sure that you are releasing a healthy individual - who will not consider alcohol/drugs/suicide/crime as alternatives at all.

Readers, these are just my views, and I'd really love to hear your thoughts on this too.


Anonymous said...

Having not seen lay-offs in my immediate vicinity, I cannot comment much on most of the post, except to say that you make sense.

I went to the website that you linked to (Rediff), and some of the titles of the stories happened to be heart-warming (or at least somewhat inspirational), ranging from someone who has started freelancing successfully, to someone who is now earning enough by giving tuitions. However, most stories were sad and angsty, and you must understand that this is how human beings deal with insecurity or frustration. We like to huff and puff and billow smoke out of our mouths until we calm down. And if you're in a group that's doing the same thing as you, even better.

Anyway, I'll also leave a comment on one of your last paragaphs, where you mentioned that a company could perhaps look upon it as a corporate responsibility to counsel employees before laying them off. In an ideal world, this would be a great idea. In a very practical (and perhaps cynical) world, this is something that might only appeal to huge corporate houses with a reputation for responsibility. If we wanted to find a line somewhere in the middle, perhaps one could talk about a cross-company solution of some kind, wherein no one corporate house is responsible for financing such counselling alone?

Aquarius said...

yes, I agree to what you say. The counselling idea is very good but alas it is still a distant dream in our country. Here in UK you do have such places where they counsel people.

I understand that you have written this post with every good intention. But people who have lost their jobs will naturally blame the company. Blaming the economy is not going to release their frustration. I had been laid off many years before during the dot com crash and I know how difficult it is to cope. Its a tough situation and things look quite bleak. Any thought of being practical goes down the drain since there are still bills and mortgage repayments and not to forget a family to support. If blaming the company helps someone threapeautically then I feel there is nothing wrong in that.

Sumit said...

@Gurdit...fair points! Thanks for typing out a 'comment' almost as long as the post. My idea was to question the intent of rediff here. Why ask people, "How're you feeling after being laid off?" and why not try and help them build a success story, and then write about it?

Counselling might sound far-fetched, but then, if one considers HR as a strong tool for marketing, it begins to make much more sense.

Aquarius, fair points! Just that I feel rediff is just trying to get cheap publicity by narrating tales of woe. They ought to either stay shut, or help people find the right path (IMO).

Anonymous said...

I went through some of the articles on Rediff, found some to be actually touching. You have looked at the lay-off scenario from an HR perspective, and we understand that every employee is an asset to the company, and how hard it is for a company to "let go". But some of ur lines,

"In a recession, they may be asked to go."

"my advice to people who have lost their jobs is to not lose confidence, but to try and find something that fits your skill sets."

It's tough saying that to a person who has lost a cushy job, and is staring at insecurity. The problem would have been compounded by the stellar growth of the economy, and many would have loans for plush living. And suddenly, when you find yourself jobless, saddled with high EMIs and a family to support, I guess the angst is just a natural humane response.

Anyway, what you have written about counselling is very sensible, but I am not sure how many cos. actually indulge in it.

Sumit said...

Oh, absolutely right Arnav! It is of course, easier for me to take an 'objective' view because I'm not the one facing retrenchment from my job.

The points you have quoted is precisely where those people need help. They are emotionally vulnerable at that stage and prone to breakdown. That's why, even though as an HR person, I feel that retrenchment is a reality sometimes, I do feel that those people should be lent support by the others.

Nitesh said...

sumit - it might sound too idealistic..

but could we not have made an ofer to the maid who does the clothes, if she would wantto upgrade her skillset to take on other houise hold chores. If so, with adequate trainig to the fromer, we can lay off the person who is neither too good at work and neither has the right attitude in place.
The new person will definitely have the right attittude towards work and may end up doing a better job.

Is this something we can map to corporate situations as well?
or is it I am being too enthusiastic about joining MBA in HR myself

Sumit said...

Nitesh, good point. And if you look closely at corporates, that does happen. If there is a vacancy in another department, and a potential layoff case is trainable, companies do try and move people there.

So yes, we probably could've kept the maid who worked better, trained her and laid off the other one.

I'm glad you're enthusiastic about joining an MBA in HR, and do feel free to air your views.

Kaddu said...

Brilliant post dude! I've been wondering if I was the only insane one who felt that this 'lay off' thing was getting too negative!

Back in April 2006, I was hired by this US company as a home-based content writer. Mid of May, the boss announced that our salaries were going to be doubled from next month. One week later, he told us this major work they were expecting to get from this conference they'd organized wasn't coming after all... & they needed to down-size!

The moment he said I was being fired, all I could think of was my Dad, who'd owned a factory several years ago when we were in Kanpur... & I was actually thanking God at that moment that my Dad never had to experience what this guy was going through! That my Dad never had to fire someone from his staff like this - on such short notice!

I know ppl have lots of responsibilities - families to feed, home loan EMIs to pay - but we shud try to keep our faith in God. When one door closes on us, there's always another better door waiting for us somewhere closeby... we just need to find it & march in!

Kaddu said...

Typo! That was 2007 & not 2006!

Sumit said...

Thanks a ton, Kaddu! I'd started feeling as if I was a heartless, cold HR industry chap, treating people as mere statistics.

Layoffs are never nice, but sometimes they are necessary for the larger good. And painting employers as villains is not a solution at all.

As a student of Labour law, I've learnt that there is a complex machinery to prevent people from being laid off, unless there is no other way.

Roshmi Sinha said...

A great post... very apt!

When the times are good... we usually find the employees hopping jobs, many of them have a common 'hobby' - that of collecting 'offer letters' - this is the bane of the IT industry. Then, they have no qualms about rattling off the 'figures' being offered to them by all these 'prospective employers' and wanting to know what others can offer!!!

Due to the skewed demand-supply ratio... especially when it involves rare/hard-to-find skills... it results in unusually high salaries... leading to inorganic growth.

I guess folks also need to keep in mind the fact that the 'recession' won't last forever... and that its a small world. There are high chances of meeting an ex-boss in the next interview/employer... and the HR grapevine is very active...

Sumit said...

Roshmi, agreed! In boom times, we were very happy looking at companies' attrition rates, clutching our tummies, and roaring with laughter. And yes, the unnatural growth rate has contributed to the wheel coming full circle.

Till then, of course, we can fret and fume, or look for a fix to the situation. :)

Roshmi Sinha said...


When the going is good... there are a lot of activities/hobbies including cherry picking...

Now, that we are hit by the recession bug... ranting and raving is a part of the withdrawal symptoms... I guess!!! :)