The layoffs come as the world wonders if a global recession is coming. Whatever label people end up putting on this era, companies are grappling with lackluster back-to-back quarters, inflation, price hikes and uncertainty. Fluctuating interest rates, a plummeting stock market and declining consumer confidence only make matters worse.
As a result, many HR managers have started considering or executing layoffs. Netflix, Peloton and Ford are among the companies that have recently laid off talent. All over LinkedIn, users can see friends, colleagues and associates, who are now open to work after being among those who were laid off. They share sad stories of layoffs.
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Whether the human resources department carries out the layoffs kindly or cruelly, the end result is the same. People have lost their jobs and businesses, often the ones that need the most help, find themselves with a labor shortage. The morale of the remaining employees drops as they become overworked and worried about the future.
Here are some alternatives to layoffs that can help HR avoid all the drama:
Thanks to the pandemic, most, if not all, companies employing knowledge workers are now set up for remote work. By getting rid of leases or selling property that used to be used as offices, employers can free up funds to pay salaries. This is not possible for companies that offer products or services that require in-person work at a physical location. However, it is a way to free up funds for those whose work allows remote workforces.
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A furlough is when workers are sent home for a period of time, so that employers can get a break from their payment. The Walt Disney Company furloughed a number of cast members, who work at its theme parks, at the start of the pandemic because the parks had to close. Ideally, furloughed employees are encouraged to return to work – for pay – in a few weeks or months at most. The thing is, companies get a break from payment, but the worker doesn’t lose their job forever.
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Job sharing is a process in which two or more employees work part-time or reduced hours to accomplish what could have been the job of one full-time employee. As a result, the company pays each less in compensation and benefits than it would pay to a single employee. Job sharing was once also seen as a way to get working mothers back into work due to reduced hours.
Cuts in perks and perks
Rather than laying off employees, employers can simply cut benefits and perks during lean times. In response to a possible recession, people stop offering free food, subscription services, etc. Just as moms comb through their monthly payments to find ways to save, employers can comb through their expenses and cut the fat.
Many companies that lay people off are still hiring at the same time. It’s a bad look. Employers should freeze hiring to save money and stay on budget. Google recently announced a hiring freeze that was to last until early August and has been extended.
Sundar Pichai, CEO of Alphabet, Google’s parent company, warned hiring would slow for the rest of the year. Some employees fear their jobs are also at stake, according to tech.co. Yet Google is starting with a hiring freeze aimed at cutting costs as it grapples with a war between Ukraine and Russia and record inflation.
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Four-day work week
When people think of lean times, they imagine doing more with less. They expect cuts and inconveniences. However, offering a four-day workweek or a shortened workweek allows companies to pay salaried and hourly employees less. The fact that it can be packaged as a benefit for work-life balance is a bonus. In the wake of the pandemic, many companies, including ThredUp, are testing this concept as a way to combat burnout. Thus, it can help solve two problems at once.
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Cut freelancers and contract workers
Employers have the ability to sever ties with freelancers and contractors in the blink of an eye. (Freelancers can do the same, and they know they don’t have the same kind of job security as a full-time employee.) Doing this work in-house can increase employee duties, but it can keep them employed because of potential savings.
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Early retirement packages
Another popular tool used by companies to avoid layoffs is to offer early retirement packages to older workers. This can sometimes be seen as cruel or insensitive, however, some workers yearn to get out of their full-time gigs to pursue their passions, focus on family, or simply move on to another phase of their lives. Companies can seek volunteers for early retirement and offer incentives to remove them from the payroll.
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