Getting Blood Out of an Onion

 Getting Blood Out of an Onion

Paying attention to trends in the business climate as reported in our local newspapers' business sections will reveal a new paradigm in the world of business. Even when the economy is doing well, it's strange to see companies that we know are doing well suddenly lay off a large number of employees.



Layoffs are disruptive and emotionally taxing, as any person who has gone through them will attest. Research on current business patterns shows that massive layoffs have occurred more frequently in the past decade compared to earlier periods in our company's history. So, the question becomes: why have employers begun to act differently?



This tremendous transformation in the nature of the employer-employee relationship cannot be adequately explained by monetary factors or rapid changes in the market, though these factors certainly play a role. A shift in business philosophy is the fundamental driver of this shift.



Employers and employees have traditionally operated under the premise of a mutually beneficial contract. Employers and employees have an understanding that the former will pay the latter and supply the latter with the necessities of life so that the latter can perform the former's job duties. In exchange, the worker promises to be dependable, show up to work on time, and do a good job overall. This model is built on trust, encourages creativity, and supports each other.



A shift in the company's perspective on employees has led to a model built on layoffs, which in turn has changed the way businesses operate.



Employees are often seen by employers as a burden and an expense that they dislike. This animosity is particularly strong when it comes to employee perks, like vacation and health insurance, that the boss considers to be outside of his purview.



In the former business model, employees were required to carry out their duties, but their motivation was solely based on receiving a wage. Thus, the business wants to alter the model from an employer perspective while keeping the employee side same, since they anticipate the same return from the old model.



Having a high personnel turnover rate can reduce the long-term benefits. Because the business keeps the workforce at entry-level status indefinitely, there is no need to see pay rise, provide vacations, and eventually retirement benefits in order to replace experienced staff.



According to this new paradigm, the pool of unemployed people is believed to have an endless supply of qualified workers. Since present workers may be quickly and readily replaced by eager jobless individuals, the human resource equation turns into an exploitative one.



While there is some sound economic reasoning behind this company model, the fundamental premise must hold true indefinitely for the model to be viable in the long run. However, this formula is valid only in a recession when there is a surplus of qualified workers. If the labor markets change and that large pool of replacement workers disappears, this strategy for human resource management could backfire spectacularly.



When managers take an exploitative tack with their staff, it undermines the trust that should exist between the two parties. When employees no longer feel supported by management, it can have a disastrous effect on morale, leading even the remaining employees to perform poorly. "Well, then we will just fire those dead beats and get new ones" isn't a viable response because low morale leads to and maintains low production across the board.



Companies' capacity to fund ongoing projects and provide customers with high-quality goods and services is impacted by this. Furthermore, when a company's exploitative treatment of employees leads to subpar goods and services for customers, the company will start to see a decline in its market share, which is a precursor to its eventual demise. For our own and our employees' sakes, there is sufficient cause to reevaluate our company's business model of employment and to think again about restoring a trusting connection with our workforce.

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