Avoiding Layoffs at All Times
I was reading an interesting pair of articles on CNN (here and here) regarding 15 companies which have, despite poor economic conditions, managed to avoid laying off any members of their workforce. The stories were varied from one another, but there were still some common ideas behind all 15 companies.
What struck me as being most interesting about these companies was the fact that it was recognized that a company’s most valuable assets are not any hardware or equipment it may own, but the people who work there every day. For that reason, these companies have looked to cut expenses in areas other than headcount.
The result of this is increased loyalty – in one case (NuStar Energy) employees showed up to work the day after a hurricane wreaked havoc on their city, destroying the homes of some employees. The employees are loyal to their employers, and will therefore go to greater extremes to help the business survive.
Investing in your employees is the only way to gain permanent loyalty. No, you don’t need to pay them more (another company froze merit-based pay increases for 6 months and still made the list of 15). But you do need to demonstrate that keeping the employees productive is important.
Another example is Mercedes – the car manufacturer’s CEO and executive team (28 people) took a salary reduction in order to avoid layoffs. This was following other reductions to costs, resulting in a stronger company in which the employees are loyal to the company, and costs have been brought under control.
What these companies demonstrate is that even in tough times, it is not necessary to reduce headcount in order to survive. Other costs can be reduced, employees can have their workloads redefined to make them more productive to the bottom line. When the economy rises, the companies that managed to maintain the loyalty of their employees will find themselves much better positioned to grow in the new economy.