It’s no secret that people are losing jobs and those individuals that have jobs fear losing it. There are many people who want to work but cannot find jobs that suit their skills. Because of that many are being forced to change careers or take lower paying entry level positions.
The United States is not the only country dealing with high rising unemployment rates. The UK has officially hit recession status.
This is not to say that companies in these countries are not hiring individuals because many are willing to pay good money for new employees. The problem is the shortage of jobs being created. One job posting can attract hundreds if not thousands of resumes from people who are hungry for work.
As unemployment rises, companies pay the cost. If you are a hiring manager of a company before you lay someone off consider the following side effects to this decision:
• Work Productivity
• Employee Morale
• Leadership Turnover
• Training Costs
Companies tend to only look at the amount of dollars and not at talent when it comes to employees. When you hire an individual you are paying money for a specific skill set. When you lay off an employee you are also letting go of that certain skill set. This is okay if you know that someone else is going to pick up the slack. But more often than not, companies get rid of someone and when they need that skill set, people’s response is that so and so used to do that and that was his/her job. Have a plan of attack because if not you will lose productivity and customer service will suffer as a result.
Keep an eye on employee morale. It’s sad when people around an organization are moping around because their best friends have just been laid off and everyone feels the pressure of more work. Fear of losing one’s job will add stress to an individual. Stress often leads to sickness and an unbalanced employee. Employees who are overly worked and stressed will take a lot more sick days and even have to consult a physician in some cases costing the company more money in the long run.
Then you have Leadership Turnover. This is the highest costs that organizations will have to pay. Sadly, some will never recover from this type of turnover. Truth is when an organization is doing bad good leaders will look to be paid more money or they will jump ship. The last thing an organization wants to do is replace upper level management but it’s a part of work life. The costs to replace an individual can be two to three years worth of that person’s salary. There are law firms that are taking huge hits because of the clients they lose do to a partner in a firm taking a job at another firm.
Lastly, it costs a lot of money to train new employees. It can take a year to train an individual to learn the processes or protocols of an organization. Training is essential to bringing in new employees. So letting go of trained individuals will certainly hurt the organizations pocket book.
So consider these factors before you lay off an individual. Do not just look at people as money but look at them as an investment in your organization. As unemployment rises and companies continue to cut jobs, remember that they are paying more than meet the financial eye.