All too often, companies resort to layoffs instead of trying other approaches to reducing costs and improving the bottom line during periods of economic retrenchment. The Boston Globe recently interviewed me about redeploying employees within an organization as a way to reduce costs yet still preserve the human capital that they’ve invested in. Here’s an excerpt of that interview:
Long-term, redeployment could save the state and companies a lot of money. Recruiting and acclimating a new employee typically takes a year and costs 20 to 40 percent of that person’s salary, said Aneil K. Mishra, a visiting associate professor of management at Duke University’s Fuqua School of Business.
In addition to hurting employees’ morale and productivity, layoffs also affect their commitment and trust, Mishra said. Redeployment, however, signals an organization values its workers, he said.
“Crafting this message of hope is so critical for the survivors,” Mishra said. “That becomes the essence by which you’re going to be able to turn the organization around.”
Let’s hope more firms like the ones profiled in this article get the message. Great companies like Rhino Foods led by Ted Castle, which also regularly redeploys its employees (to customers and other nearby firms) when times are tough, guaranteeing their jobs when circumstances improve. For information about the alternative to layoffs that Rhino Foods uses, please read our book, Trust is Everything, also available on Amazon.com.