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Friday, February 6, 2009
How I See It
Employees may be gone, but their impact lingers
How is the economic crisis affecting tech companies?
Companies are slicing and dicing their head count with little regard for the impact it has on their organizations. Some organizations handle the process as if it were a game show. Round up your contestants (also known as employees), hand out envelopes and ask people to wait until everyone has received an envelope. Then at the count of three, have everyone open their envelopes to see who has won the lucky prize of keeping their job for another week.
This is just one of many stories being told by workers on the front lines of Corporate America. I recall the day I learned Circuit City was firing their top salespeople and “allowing” them to reapply for lower paying jobs. I thought to myself, “If this is how they are treating their people, then how will I be treated as a customer?” I never stepped foot in their stores again. Apparently, others followed suit.
You would think employers would learn from the public relations mistakes of others, but they haven’t. Clients in my Job Search Mentor program are sharing stories that are mind boggling. One woman asked her employer three times if he thought it was a good idea for her to move forward on the purchase of a house. He said yes. He laid her off four weeks later. She is now unemployed and has a mortgage to pay. Another received an e-mail at home from her boss telling her she was terminated. These stories haven’t made the blogosphere ... yet.
I understand the need to reduce expenses. Payroll happens to be a large number on the balance sheet. However, companies are exchanging short-term gains for long-term losses. Here is why:
Despite the recent headlines of thousands of job cuts in the region, a labor pool shortage is coming. We are in the eye of the storm. The U.S. Bureau of Labor Statistics forecasts a shortfall of 10 million workers by 2010, with the greatest deficit to occur in the 25-to-44 age group, the pinnacle working years. Naysayers believe this number is exaggerated and that we may only see a deficit of 8 million workers. Either way, employers will be competing for much-needed workers from a shrunken talent pool.
The current economic conditions may delay this labor crisis. But for how long? Eventually, employers will have to rebuild the foundations that have crumbled under the weight of current losses. For years, we have been warning job seekers to be mindful of their online image, as employers can easily find this information and use it when making hiring decisions.
In the past, dishing about your employer was limited to cocktail parties. Today, such information flows seamlessly from one social networking site to another. Throw in personal blogs, online forums and sites such as Vault.com — where job candidates can read comments from actual employees — and you have an entirely different picture. These comments are online for all to see, for as long as the Internet exists.
It is possible to reduce your work force without destroying your reputation. Zappos, a Las Vegas-based e-commerce site, is a fine example of a company that has done this. Tony Hsieh, 34-year-old CEO of Zappos, recently blogged about cutting almost 8 percent of his staff. His transparency, combined with the company’s generosity (all laid-off employees received a minimum of two months’ pay and reimbursement of up to six months of COBRA), has strengthened his relationship with his employees, former employees and customers.
Zappos will not have any problems attracting candidates or customers when the economy turns around. Can your company say the same?
Roberta Chinsky Matuson is the president of Human Resource Solutions, which has offices in Brookline and Northampton. She can be reached at 413-582-1840 or roberta@yourhrexperts.com.
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