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Worse yet, when soon they are again needed, will they be available at all? If you will recall, unprecedented ten plus year economic boom we have enjoyed did not begin overnight. It began slowly, allowing necessary time to ramp up employment over many years. If present economic downturn ends as quickly as expected, there will be little breathing time available before demand and output boom once again. Those companies that are shedding their people wholesale today may find themselves at an extreme competitive disadvantage tomorrow.
One more very important aspect needs to be carefully considered. Today's "right-sizing" is heavily targeting older, more senior employees. They obviously cost more in salary and in benefits such as health insurance, thus cutting them makes a larger impact on bottom line. Do not forget, however, that younger workers are anxiously watching and taking careful note. They are also asking themselves, "Will this be my fate in ten or fifteen years when I am forty-five or fifty-five and economy slows?"
Many corporations are sending a very clear message to younger employees by their treatment of more senior people. The younger employees may not leave now, when economy is slow, but once turnaround occurs, many of them will decide its is time to create for themselves a more secure future.
If you shouldn't be chopping, but sales and profits are sagging, what should you do? INNOVATE! It is amazing what cost reductions can be quickly experienced and what market share gains are possible when we become innovators and teach each person within our organization's to do likewise. What's more, by doing so, we position ourselves to jump ahead of pack as soon as economy does begin to turn corner.
Any organization can cut its way to profitability in short term, but we cannot cut our way to long term GROWTH!
John Di Frances is the Managing Partner of DI FRANCES & ASSOCIATES, LLC founded in 1983. Phone:1-262-968-9850 Fax:1-262-968-9854 208 E Oak Crest Drive Wales, WI 53183 www.difrances.com synergy@difrances.com