A staff layout recently occurred at the major Columbus paper and media outlet, The Dispatch. Gatehouse Media, the owner of The Dispatch, said it was needed for business purposes and to invest in the future. It all sounds familiar: Layoffs occurring either in the newspaper industry or any other industry and the same, tired excuse why they’re needed. Do these layoffs really need to happen? When did we start treating others as a number instead of a human life? Why do some think they’re so necessary?
They don’t. Layoffs don’t need to happen and according to a post on the Harvard Business Review, the phenomena that became so popular in corporate worlds, began in the 1970s. As companies announced they were laying people off they were temporarily rewarded through the stock market.
The Harvard Business Review also says layoffs end up hurting business rather than improving business. Data confirms profits at some organizations decreased for several years with some eventually going into bankruptcy. In addition, those employees that are left at the organization don’t perform as well as before the layoff. They too are concerned about the fate of the organization and question the ability of those at the top. Employee loyalty takes a toll as employees’ allegiance to the organization is weakened by watching their peers be forced out. Within a year or two, they decide to quit and that increases turnover rates and additional costs. Other problems also occur in areas elsewhere which also impact the bottom line.
While some believe the financial problems happened before the layoff and that becomes the reason for the layoff, it really becomes a band-aid instead of addressing the real issues that are occurring and leading to financial concerns. In a Fortune magazine article, one CEO says layoffs happen because executives don’t want to work very hard at the problems facing the organization. One common term that was used in the article was “dead wood” which refers to those who don’t appear to perform very well. Some executives, the CEO says, would prefer to have a layoff and remove the “dead wood” instead of working with individuals to improve performance. She also cites other examples where organizations had huge financial problems that were ignored as executives reaped huge compensation packages. Too many times layoffs are the knee-jerk reaction instead of taking time to look at the real problems. It’s so much quicker, or so it seems, to lay people off than address the root cause of what’s happening.
For those who are laid off it is a devastating experience. It is a significant life altering event and takes a heavy psychological toll that takes time to recover. Those who have been laid off describe it as losing a loved one. There was a story of one man who even after he was laid off would travel to his former work site just as if he was going there to work. He said he needed that sense of routine to help him feel whole again. That loss of human dignity and self-esteem that comes from a layoff and is placed on another is cruel and inhumane. What’s even worse is to watch others receive those huge compensation packages while those who are laid off are suffering to make ends meet and struggle to get their lives back on track.
Many states have unemployment insurance that may provide some financial benefit for possibly six months but that financial benefit can be less than half the salary a worker received if that. Some may not receive any benefits and are left without any financial support which only adds more pressure and stress to the loss of the job itself.
So are there alternatives to layoffs? Absolutely. The Harvard Business Review described re-training efforts at one corporation. We worked with one group who did something similar. During a labor-management meeting they addressed training needs at their organization and the concern for job loss if employees weren’t up-to-date on skills. The employees organized an educational fair to urge their peers to seek additional training so they could maintain their jobs. Their negotiated contract provided educational benefits so all of the cost of the training was not placed on the employees. Another group recognized layoffs were not going to help the organization. All of the work that needed to be completed would not get done if layoffs occurred. It was a difficult topic for a labor-management committee to discuss but they both recognized an alternative was necessary. What they came up with after much work was a voluntary furlough plan. At first, taking a day off without pay was hard but when the day after a popular holiday came up that most employees worked, employees decided to use the voluntary furlough to take the day off. Employees found out losing a day of pay wasn’t as bad as they had thought. It was much better than losing their job. The voluntary furlough plan was very successful at saving the organization some money.
Those are a few examples of the alternatives to layoffs but it takes real leaders willing to do the right thing and look at alternatives. Real leaders who show empathy, listen to others and have a sense of humility. These are the leaders that invest in employees like the Federal Reserve recognized in our previous blogs. They encourage worker voice and listen to the ideas of workers. That’s what happened in the above organizations we worked with. Leaders that listen realize they may not have all the ideas to move forward and want help from employees. When leaders provide the support and tools to employees, it helps the organization become stronger so layoffs become a thing of the past.
Our big corporations had founders and leaders who wanted to support their workers and give back to them because they knew, in the end, it would help them out and it did. In another article, Henry Ford is cited because his goal was to share with others and give them the ability to not only help build an industrialized society but improve their lives as they built that society. George Eastman built a company that also took care of their employees. Eastman-Kodak was centered around the employee. George Eastman created a fund that would help employees if they had accidents or illnesses and were unable to work or if they simply wanted to retire. Eastman provided other benefits such as healthcare, housing, and educational assistance. He believed if he helped and took care of employees the benefits would come back to the company and he was right. Employees remained at Eastman-Kodak throughout their careers. It’s time to get back to those ideals like George Eastman where caring for employees or for people is an investment and not a cost.
It’s also time to look at what’s really driving the problems within an organization and not rewarding those who don’t address them. Instead of allowing workers to be laid off it’s time to support workers and listen to them throughout communities, local governments, state governments and federal governments. It’s time to show support and care for our fellow men and women.