The difference between the current downturn and previous ones is that companies are laying off people in anticipation of bad times ahead. Redundancy has traditionally been a last resort when times are shown to be tough but now 'belt-tightening' is rampant.
I'd say about half of the Outplacement (Career Transition) projects I'm currently involved with are pre-emptive strikes.
This is somewhat intriguing as research shows that 2/3's of downsizings do not increase profits. While the immediate strategy can be justified, I wonder what will happen in 12-24 months when the market starts to pick up again? According to IBISWorld Chairman, Phil Ruthven, Australia will experience full employment (4.5% - 5.5% unemployment) for the next 25 years.
Balancing the short term risk of profitability and the long term risk of organisational sustainability is a difficult one.
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