I was reading a report on Economic Times, this morning (Infosys trimming up to 5,000 staff to scissor costs) and well i see the phrase – “employee unfriendly” being used for the company’s decision to trim up the organisation by letting go the poor performers. I wonder, why is it – “employee unfriendly”. It’s just a business decision, and let’s treat it that way. They decide that they need to clean up for certain business reasons and they must have thought through the same.
Decisions to hire or fire are business decisions, based on business needs:
Businesses at times take decision to trim workforce, or add manpower and these decisions are normally driven by the state of business, state of the economy and the needs of the business. No company is happy firing employees, and no company is happy laying off trained manpower. If, however the state of business and state of economy calls for stringent measures, such painful decisions needs to be taken.
Why are we so much in support of job security and why do we carry an expectation from an employer that they would support employees, even non performers with some kind of good will ? If an employee decides to exit based on his/her reasons for better career, better opportunity etc. or for personal reasons, he is most welcome, and if a company decides to terminate a relationship, specially in bulk – this is seen as unfriendly measure.
Laying off – even non performers, is an expensive decision:
When a business decides to hire people, it does so against any present or any foreseen requirement. Since most hiring in IT companies happens at the entry level, the bulk of manpower is also present at an entry level. When ever there are decisions to trim manpower, it is safe to assume that most of the people to be laid off will also be amongst those at entry level and those who have been hired in last few years as fresher’s. As and when a company hires fresh talent it also trains them (i.e spends money and time on them), it allows them to work on assignments that give them necessary value addition and learning. So a decent amount of investment normally goes into getting the fresh talent productive and relevant.
Cost of retaining non performers could be much more expensive and may also impact competitiveness of the business:
Any person with a basic level of common-sense will say that it is foolishness to let go trained employees on whom one has spent a lot. The same thought would also be there with executives running the business that is letting go the employees. Its not an easy decision. If, however such a decision is being taken, there has to be some kind of compulsion and suitable justification for the same. Businesses, specially the big ones do think through such decisions, as the decision to let go off so many trained resources is not easy, even if they are poor performers. However, retaining them could not just place a question mark on productivity, profitability in the short run, for some business it could also impact sustainability and survival. It makes sense to take such decisions before things start getting out of hand.
Laying off, a choice if it’s the only alternative for staying competitive and ensuring sustainability:
However, if there is call that needs to be taken between the long term sustainability of a business, and cost optimisation in view of reduced revenues, reduced business. Cost optimisation based on manpower rationalisation could help really well – for most IT companies, manpower costs are a major component of operational expenses.
For those on firing block:
Lets look at the positive side of story for those who will be laid off:
- They got trained and they got an opportunity to work with a leading brand.
- They got the desired work experience, that makes them employable in future.
Let’s not take employment or job as “for granted”. One needs to be ever competitive, be it business or people running and supporting the business. As it is said – survival of the fittest, instead of blaming employers for being employee un-friendly, it makes sense that the focus is maintained on making oneself capable and employable again. It makes sense to stay competitive based on ones skills and abilities.
Praveen is the Founder & Principal Consultant of KHEdge, a boutique HR & Business Process Advisory firm. Over last 15 years he has advised & worked with promoters, founders, business leaders, HR leaders in areas of - Business Strategy, HR Strategy, Organisation Design etc.