Expert: layoffs may be a mistake for some companies

January 19, 2009 | Print this Page.
Layoffs are not necessarily in a company's best interest when cutting costs.
In these trying economic times layoffs sometimes seem like the best solution for small businesses facing financial problems, but one expert says it may not be the smartest one.

On the one hand, layoffs are sometimes unavoidable in a situation of cash flow shortage, but, according to Jason Zickerman CEO of The Alternative Board, whenever possible managers should consider a different option.

This could include work time reductions, unpaid vacations, or even creative solutions such as "job lending," where an employee is temporarily lent to another company that needs help, he told HispanicBusiness.com.

That is because employees are a key resource in whose recruitment and training the firm has already invested, and when times get better it will lack this crucial input in order to recover quickly, said Zickerman whose firm specializes in management advice to small and medium-size businesses.

In addition to that, "Morale and productivity are sure to drop among the survivors," he told the website.

According to the Bureau of Labor Statistics, the U.S. economy lost 524,000 jobs in December 2008, bringing total unemployment level to 7.2 percent.

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