Does a family decide to get rid of a member when it undergoes financial crisis? The answer is obvious. When an organisation layoff people, it sends a wrong message to the existing employees, customers and competitors, which is not good if it intends to survive long. Need for layoffs indicate towards either functional inefficiencies or a shrinking customer base. Whatever method is adopted for layoff- performance based or last-in first-out or first-in first-out, companies run into the risk of losing capable resources. India has the largest number of population below the age of 25 in the world. Government and policymakers should ensure that job creation keeps pace with the number of young people reaching working age. Otherwise, it could lead to social disruption and strain our social fabric.
Some suggestions on how to increase employment and reduce layoffs:
1. Analyze and identify the reason why sales are dropping and fix it. Fund and encourage innovation and reward the folks who innovate and help to optimize the processes and differentiate.
2. Companies should adopt measures like - pay cut across-the-board, request voluntary separation or sabbatical and introduce additional days off (without pay) to ensure human capital retention.
3. Investment on resources and time can be directed to produce new competitive business plans. Connecting with customers and Interactions beyond just sales and marketing will generate tremendous ideas for new products.
4. Companies should use available human resource to invest heavily in the future product pipeline and develop the products that customers might want in future. They should also increase effort on long term strategic initiatives, than focusing on current situation.
5. More jobs should be created across all categories of the Indian economy, i.e., services, manufacturing and agriculture. Policies should be put in place to foster faster economic growth.
6. Planning infrastructure projects has multiplier effect on the country's economy, including job creations and accelerating economic growth. Public Private Partnerships should be fostered to fund such projects.
7. We should move our mindset from job seekers to job providers. Entrepreneurship ventures should be encouraged.
8. Employees should keep their skills up to date. Idea is to maintain the employability factors high as companies look for a productive and adaptable workforce. Companies should offer alternate role and location to employees to retain the talent as losing them would mean losing already acquired knowledge.
9. In tough times, when layoffs are imminent and no other options seem viable, companies can look to turn full-time jobs into part time. This way companies can save money and the employees do not lose their jobs.
10. Government should support technical and vocational training institutes and course structure should be expanded to include many new technologies.
It’s natural to feel the heat but tight market should not be a major cause of worry as competitors also face same situation. The points mentioned above would help to limit the damage. We must remember that no one formula will work. It has to be a combination.
- Swapnil Saurav