Wednesday, November 18, 2009

Cutbacks creating witch hunts at work -- and very little net savings

Picture a department with a half dozen employees. They work together pretty well. It's a comfortable and productive group.

Then something changes. Someone in management decides that the best way to reduce costs is to eliminate an employee or two.

The word leaks out that someone is going to be cut.

And suddenly, that cooperative group of employees turns into a finger-pointing, fault-finding mob, all accusing each other of incompetence, malfeasance, or just plain stupidity. The witch hunt is on, and everyone is fair game.

And while such things can occasionally bring some relevant details to the surface, most of the time the "facts" about who's doing what, and who's been late and who made personal phone calls on company time have as much value as the crowd's logic in Monty Python's Life of Brian as they accuse a village girl of being a witch...

In the meantime, work doesn't get done, customers are ignored, and the company risks lawsuits for all kinds of things ranging from discrimination to harassment to creating an unsafe workplace.

From one HR pro to another, I am here to tell you that it just isn't worth it! Sure, there are times when a cutback is absolutely necessary. And in those cases, it needs to be done quickly and with chance for rumors to start.

But most of the time, the savings from eliminating a person are more than offset by the cost of lost productivity and higher turnover among those left behind. Unfortunately, most managers don't know it.

Training managers in the real versus short-term savings

As part of your management training program, address the cost of cutbacks. Teach managers how to weigh in factors like lost work hours, reduced productivity levels and higher error rates among survivors. Make sure they understand the price of a jump in turnover, as people scramble to move to someplace where they will not be "next on the list."

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