It seems like every day another large company in the U.S. announces layoffs of thousands of employees. Thousands of lives are totally disrupted (if not destroyed) by incompetent management.
There is considerable debate about whether the purpose of a corporation is to first serve the employees or the shareholders. Not surprisingly, Americans favor the shareholder and Europeans and Asians generally favor the employee. Good cases can be made for both positions, but what bothers me is that the two positions are not mutually exclusive.
If we look at most of the recent layoffs in the U.S., I do not believe they were caused by a drop in demand. Rather, senior management was lax in reviewing staffing requests during good times and when times got more difficult senior management did the easy thing and fired the excess staff. Simple, cowardly and incredibly painful to the workers who lose their jobs. I believe, in fact, most workers would opt for a pay cut if it allowed everybody to stay employed at a company (but at a lower salary). Of course, someone might criticize the U.S. company that it was being considerate of the employees--heaven forbid!
A better approach to staffing is as follows:
- Rigorously review new staffing requests at all times--not just when times are tough
- Challenge executives to justify why improved IT systems would not be a better alternative than hiring more people
- Hire the best people--they need less staff
- Outsource functions that are not part of core competencies
- Train and develop staff constantly
- Fire senior managers who do not have a successor in place or at least identified (managers who can not think about succession or backup are not qualified for their position)
- Avoid prima donna executives because they create inefficiencies (especially in staffing)
My approach creates a very lean organization of competent people who have a heavier workload, but this kind of organization does not lay off people. First, this type of organization is more profitable and second, every person is critical to the operations of the company.
I hate layoffs and I think they are proof of poor and cowardly management.
Enough idealism for one day.