News: Performance Management
Leaders advised to opt for training, not job cuts
10 September 2008
Firms in the healthcare, transportation and manufacturing sectors could all avoid damaging morale by forgoing job cuts for training and development when they want to boost efficiency.
According to a global study of senior leaders by the Info-Tech research group, intermediate and management staff are some of the employees most likely to benefit from training because they are often the first departments to be reduced.
"Our study found that staff cuts have a larger and more detrimental effect on the entire company due to increased workloads and damaged morale than other cost-reduction options," said Aaron Hay, a research consultant with the group.
Enabling employees to cover multiple functions will at least allow companies to make staff cuts gradually, if they must, he added.
His words echo those of Charlie Mayfield, the chairman of the John Lewis Partnership.
Following the announcement that the retail giant will step up training efforts - rather than resort to job cuts - to tackle falling sales, he pointed out that training people in one department to move into another enables leaders to "manage demand".
