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Is it right to lay off workers in times of crisis?
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Par:-  Areff Salauroo

On 11/02/2009

In times of CRISIS, laying-off workers should be last resort.

It is well-known that in hard times, the first recourse of many employers is to cut costs by laying off workers. Is it the right approach? We need to ask ourselves this question now as we have to face financial and economic crises. Employers should make redundancies only as a last resort; as it is a short-term fix and is detrimental to the company.

Businesses should instead plan for recovery and they can only do that by retaining their staff. In truth, businesses should invite their staff to participate in “cost-cutting exercises” and to come up with suggestions for reducing costs.

There are a number of legitimate ways to stave off redundancies.  Many big corporations are having recourse to them. These include short-time working, reduced hours, pay freezes, wage-cuts, and sabbaticals.

Mc Kinley in “Organizational Downsizing” rightly pointed out that there is considerable evidence that downsizing does not reduce expenses as much as desired and that sometimes expenses may actually increase”.

Lay-offs should be last resort. We have to find and fix the problem. Cutting jobs is not the best solution. Make the changes that will make the business better. Do not damage the very ones that made the business successful in the first place, its employees-its key resource-.


Commentaires

Par Abdus Samir Mosaheb
Dec 07, 2009
I truly agree with Mr Areff Salauroo on this article. Masha allah
Par Dodo
Feb 21, 2009
I would strongly disagree with the comment made in the Mauritian context. First of all McKinley's comment was made about Downsizing in Learning Organizations. Thus I hope that it would be very clear to all that there is a very big difference in the context of hotel and factory workers in Mauritius! It's not rocket science!!!
Par Henry
Feb 20, 2009
My friends of the workers' Unions your attention PLEASE. What about adopting the practice in force in some developed countries? Like a WEEKLY evaluation of each workers' performance, working from 9.00 am to 5.00 pm, only 5 days off per year, less that 10 days sick leave per year, etc. The main problem in Mauritius is: we want a thicker pay packet in return of lesser effort. Is this logical or myopic?
Par Ghazi / Shaheed
Feb 19, 2009
If the enterprise is capital intensive where the salary component in the income statement is not significant,it may not be prudent to resort to lay off. Dismissal of workers,unfortunately,has become a remedy of the obvious for many when it may well not be so in the long run.
Par Macachias Cockco
Feb 14, 2009
We have to stop thinking like the DWC time. "Protege travailleur" . Each and everybody should know that they have to be competitive else they are not required. Lets look at the bigest employer in Mauritius , the public sector. Do you agree that all the posts must be made in very short term contract, so that labour can become more competitive and more people can do the job than a guy sitting there forever. The parastatal bodies , where managers politically recruited) are paid more than he is required. I think people shoud know nothing the employer can do, its up to them to carry their load.
Par Hish29
Feb 14, 2009
One thing i cant understand is why dont we have more HR with that mind set. Why is it that in other companies, its those working hard and getting low salary that are always the first to be sacrificed. Mr Areff i think you need to give some hr courses to the person from air mauritius and all those hotels. You need to teach them what Human Resources is really about..
Par yasheena
Feb 13, 2009
The current situation is a vicious cycle. Both employers & employees are caught between a rock & a hard place. Mass layoffs are occurring with greater & greater frequency. But in an ideal world, companies would think about what they could do to avoid layoffs long before they get to the point where they believe layoff are necessary. Unfortunately, human resource planning is one of the most neglected areas in HR. Most organisations don’t do it well, infact they don’t do it at all! However for many employers, it’s too late, they have to use their last resort that is- layoff., and the most that can be done is minimise the pain & suffering of those who are being laid off and those who remained. As Martin Luther King well said, “ The ultimate measure of a good employer is not hoe he treats his workers when business is prosperous, but how he treat them when time are tough”. The future can never be forecast with total accuracy, but planning & preventive actions can minimize disasters. So, if you want to avoid lay off, make sure that you plan ahead. ACT NOW!!!
Par iv
Feb 13, 2009
Very encouraging opinion shared by an HR professional. I second his opinion. We should really look at alternatives rather than laying off workers.
Par YNWA
Feb 13, 2009
Very positive opinion shared by one of the top, if not the top HR professional manager in Mauritius. This articles should act as a catalyst in the education of other HR professionals. It is more of a prejudice that managers believe in. We make losses we cut jobs, its almost an adage to them. to which they stick to. Unfortunately, that is nothing but a fallacy. Let us hope that this articles puts the wheels in motion.
Par stephanie
Feb 13, 2009
I am sure that those who are running their businesses, are the best persons to know what decisions to take. Before laying off people , i am sure they have thought of all the options. So why the debate. I believe it's all to do with cashflow and there is no demand for their product. It's sad. Let pray for things get better and in the meantime think that there are people in worst situation.
Par Areff
Feb 13, 2009
While many readres tend to share the views that lay-offs should be the LAST rseort, most of them realise how difficult it is when it comes to ask hundreds, thousands of people that they no longer have a job and therefore no income. We are yet seeing a number of businesses taht are presently laying off their employees, and thre are more to come. We again wish to remind them that they to try and fix the problems first, then look at possibilities for short-time working, reduced wages, job-sharing,etc. We appeal to them to have recourse to redundancy only as a last resort.
Par Dina
Feb 13, 2009
"The easiest way to save the business is to lay off workers". But they often forget that behind this easy solution they will be dealing with much bigger problems... The rest of the staff... increase in work load , pressure while working,the fear of losing their jobs, no motivation, decrease in production. The firm will have to face more problems.. I think “cost-cutting exercises” will be the most appropriate solution to overcome the difficult times.
Par Dina
Feb 13, 2009
"The easiest way to save the business is to lay off workers". But they often forget that behind this easy solution they will be dealing with much bigger problems... The rest of the staff... increase in work load , pressure while working,the fear of losing their jobs, no motivation, decrease in production. The firm will have to face more problems.. I think “cost-cutting exercises” will be the most appropriate solution to overcome the difficult times.
Par Bibi
Feb 13, 2009
I think any organisation before they start their business, they take a certain risk.Because they do not really know whats in the future.what are the problems they will be facing. Proper planning of the business can help them in dealing with any situation like in this article we mentioned about loss of jobs.
Par hitman
Feb 13, 2009
Its good to see an HR thinking like this. I agree with Mr Salauroo. Its a good point of view, which people tend to overlook. It's true, that in times of economic crisis, entrepreneurs seem to see this as one of the first decisions that needs to be taken, but as Mr Salauroo said, it should be as a last resort. I hope this article is taken into consideration, and would like to show my appreciation to Mr Salauroo and l'express for sharing this enlightening which I believe his article is with the readers.
Par Guffran
Feb 13, 2009
What is the use of being productive and 'producing' something for which there is no demand? The tourism sector and in fact all other sectors of our economy will be in agony soon, if not already for some. Laying off the workers IS a solution, but mere 'sacking' them (and soon, us) will not help. To my humble opinion, the most plausible action to take is to retrain these workers into the agricultural sector, be it in the cultivation of organic products (produits bio), hydroponic products, or even in the traditional way. The fields and acres of land dedicated to the IRS projects should be given back to Mauritian citizens, since there will be a decreasing number of foreigners willing to take the risk to invest in a second home at such an exorbitant price. Reconversion of our labour force into agricultural development also means that we are taking steps towards self-sufficiency and thus, food security. The Mauritian government has, for long now, been hailing the 'Maurice Ile Durable' motto but we can hardly see any tangible measures or policies justifying the glorification of such a statement, albeit the 'Globes économiques'! Arguing that people, particularly youngsters, will not want to 'travay la terre', is of no use, since implementing such drastic measures will be ineluctable in a near future. Of course no such initiative will be taken since those cashing in at the top are only interested in short-term profit, of course under the wings of our MPs. That's what we call good governance..
Par Naheer
Feb 12, 2009
To my opinion, companies tend to overlook their long-term capital investment in their employees. Organizations look at wages and benefits not just as part of expenses, but also as payments on the capital of employees’ skill and dedication. Job cuts reduce the employees’ faith in the company’s vision. Restoring employees’ trust in their management is not easy to restore. An announcement of a layoff creates a climate of personnel uncertainty, which causes even the remaining employees to leave. They could even be your best people and you would lose them in favor of other companies. Job cuts not only reduce the quantity of employees, but also the quality.
Par Prixesse
Feb 12, 2009
As per quote - 'It's a recession when your neignbour loses his job; it's a depression when you lose yours' . As there are always, of course, job losses of a cyclical nature in a recession, your advice will surely help.
Par Nadia
Feb 12, 2009
I agree that Organizations should look to their employees for additional solutions in cutting cost and not instead sacking them. Sometimes an Organization can be quite taken aback with what the employees can come up with as suggestions. Furthermore by the Organization being frank with the employees can only mean more added values to the Organization in terms of loyalty and trust from them.
Par simone
Feb 12, 2009
Employers should encourage and motivate employees to be more dedicated to the company and their jobs.They should work as a team so as to find cost effective solutions and take part in cost -cutting exercises give their suggestions in order to overcome the difficult times.If they lay off workers,the remaining staff will feel insecure and thus be demotivated and this could further affect productivity and worsen the situation of the organisation.As it was well said:"laying off workers should be the LAST RESORT"
Par simone
Feb 12, 2009
Employers should encourage and motivate employees to be more dedicated to the company and their jobs.They should work as a team so as to find cost effective solutions and take part in cost -cutting exercises give their suggestions in order to overcome the difficult times.If they lay off workers,the remaining staff will feel insecure and thus be demotivated and this could further affect productivity and worsen the situation of the organisation.As it was well said:"laying off workers should be the LAST RESORT"
Par Philippe
Feb 12, 2009
It has always been my philosophy that any company, especially in the service industry, should be compared to a computer as it has two components. The first one being the hardware and the other the software. However, it does not matter how beautiful your hardware is, if your software is incompatible. So, why would one in short term want to destroy the software that took money, time and effort to develop and train to the highest standards? At the end of the day, at some point this will all be over and you will have to rebuild your software. In this time and age, I think each leader should remain focused on the long term objective of the company and come up with innovative and creative ideas of how to tackle this crisis.
Par nadjine
Feb 12, 2009
According to me,dismissal SHOULD be regarded as the last resort.'cost cutting' is a very good idea in the sense that it is done in the correct way.Also cutting jobs of employees might instigate them to provoke a jeopardy which will be disadvantageous for the company itself
Par Krishna007
Feb 12, 2009
Inspired article from an appealing professional which leaves lots of topic of reflection for those who only react rather than being proactive. Indeed true, these valued workers are not the fault of the crisis. on the other hand, they could have participated in the betterment though actual conjucture is hard and difficult. in a battle for survival we dont separate ourselves with our allies, we dont separate ourselves with our battlers!!!! They can be used to complete unfinished work. they can be further trained (provided the company has money) cost training is more an investment than a cost. Sabatical leaves, cutting of wages, changing the routine operational processes are solutions. The cost of recovery for this measure will, unfortunately, be manifold and again unfortunately at the cost of staff due to lack of managerial foresight. A reflection: why should innocent staff pay for the errors of others who have faulted at the decision level, at the marketing level ( when shall we reap the fruit of their maniforeign trips), the organisational and structural level????
Par mridula
Feb 12, 2009
employers should motivate the employees to be more productive and dedicated in these difficult times . laying off staff will only increase the work load and pressure on the rest of the staff which in turn will increase demotivation and affect their productivity . Depressed and demotivated staff will contribute to the downfall of the business instead of helping the firm to combat the crisis.
Par KAV
Feb 12, 2009
Example AMBRE HOTEL must sacked all the head in the restaurant cause they are not at their level.
Par Melvin
Feb 12, 2009
In this severe recession that is happening throughout the world mostly in the U.S. businesses have this tendency to lay off workers rather than lower wages and keep all their employees. It is normal because employees do not want their wages cut off so what is left to do is to lay off those that do not have seniority. I do not think businesses should lay off its workers but rather they should implement rules such as reducing the amount of hours the employees work therefore, everyone works less which will reduce productivity and consequently, your costs will be lowered because of less productivity.
Par Starbright
Feb 12, 2009
I don't know whether it's right or not but unprofitable enterprises should be laid down for good. Mauritius is not a welfare state and should all mauritians claim redundancy benefit from the state when they are redundant they would be very disappointed because they would have to pay at least 20% in income tax. You gotta contribute to the box before you can take advantage of all benefits. Good luck
Par Deepak R
Feb 11, 2009
Very encouraging opinion from a HR professional. The statement "Do not damage the very ones that made the business successful in the first place" is so reflective of the preferred approach of businessmen in times of crisis. No value for the people who made your business come that far!
Par James Alfred
Feb 11, 2009
Well every body knows in Mauritius that it is only in parastatical body or business owned by state that colleur l'affiche are sent for only tourne pouce.They jut sit down and at the end of the month take a big salary.It is heartbreaking to notice that such business were in a recent past working properly or even making profit. e.g. Casinos and Domaine les pailles.It is intervention of polititians in the day to day running of these sectors that has brought them on the verge of bankruptcy. Alas in these time of crisis there are many workers in these sectors working hard but what can they do when the ratio of colleur l'affiche against travailleur competent is 3:1 Rien a faire !!!!!!!
Par Ashvin
Feb 11, 2009
Businesses should absolutly not fire any of their employees as it could be damaging for their image and could seriously impact on motivation and atmosphere at work...hence lower productivity. Instead companies should focus on finding new market segment and invest wisely for the longer term. (Why because they will gain when global economy rockets.)
Par Zozo Conde
Feb 11, 2009
Payroll expenses are the big chunk in the operating statement and this is where cost cutting has to start.
Par hassan
Feb 11, 2009
It's time to remember the golden rules MOTHERLAND or DHARTIMAA or land cultivation all our needs is from the soil -common joe.
Par Parvez
Feb 11, 2009
Cutting Cost is not the solution during CRISIS. Cutting Cost = Optimization of resources. This practice should always prevail.Business people should ensure that staffs are always committed and have proper mindsets as we say in french " un sentiment d'appartenance".
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