In the backdrop of US economic worries, with the looming clouds of global recession, the jobs markets are wobbly with mounting concerns of job insecurity.
This uncertainty is significantly impacting the working class more so the young professionals, one in every three, consider that a threat. They are not sure which way the economy is heading, which is adding to the mental health woes as well. As a matter of fact, in the current context, this is listed among the top issues ravaging employee well-being.
The job insecurity concern primarily emanates from the mass layoffs and the knee-jerk reactions of companies prompting an abrasive culture of hiring and firing.
This issue has assumed astronomical proportions with catastrophic consequences. It needs to be addressed with some checks and balances. We cannot leave this alone for employees or the government. However, there needs to be a semblance with regards the ethical responsibility of various stakeholders, more so ever for the business sector that has the lion share of this problem.
They have to rethink to limit its onslaught. Every employer, business, and government should reconsider their role in this aggravation, primarily the large companies.
Government can indeed play a role but is limited to setting the guiding principles, not necessarily regulating them as such interventions often prove counterproductive.
The primary onus is on big companies to bring ethical values ruling out job layoff insecurities and putting together ways and means to adopt responsible hiring with certain job assurance. I am advocating performance-based retention where low performance-based layoffs are allowed with due merits.
However, the main issue is mass layoffs, which is a common cause of concern for most. Just in the first quarter of 2023, more than 165,000 jobs were laid off in the USA alone and veiled warnings given therein have shown the writing on the wall rattling the jobs scene across the globe.
This mayhem needs to be stopped. It has been going on for too long as companies must not delve into this to manage short-term profitability gimmicks but must search for their failures to mitigate this.
The hiring and firing culture are evident in US companies, especially in the technology sector. In the past ten years alone, of the Fortune 500 companies, more than 2/3 have laid off employees three times whilst they have also hired people on their rolls in the following years. What a strange predicament!
Do they not wink an eye on their firing binge? Does it not require them to take moral accountability in this faux pass of hiring today and firing tomorrow? Technology and banking layoffs in the recent past have indeed aberrated this situation.
It is surprising that it was only recently in 2021, many of these companies were in a hiring frenzy and in just less than a year, the same companies are retreating, with thousands of layoffs and concealed warnings of more to come. What is bewildering is that these are all big companies that have made bumper profits.
Are they unaware of their next two-year prospects, or have they failed to see the storm in the making. How come they are caught surprised by the economic downturn now?
For instance, in the contemporary context, even the companies that have made stellar profits in the past year embarked on layoffs. They could have avoided this had they made provisions to protect against future layoffs. Ideally, they must review any future redundancy with extra caution at the hiring stage only.
My contention is that these companies must build a sustainable ecosystem where hiring must be done with a long-term perspective, and it must be ensured that each aspect of their employee retention is taken into account, including employment safety, by guaranteeing a minimum retention period.
The redundancy option should be allowed under very severe economic or financial distress and with a minimum grace period of employment retention.
To ensure this, the companies should build mandatory additional provisions in their P&L for such costs to fend off expenditures. This practice will help companies to limit the damage from layoffs as they play havoc with company employees and will enable companies to plan for any future downturns.
In conclusion, I expect companies to ensure extra care in developing comprehensive policies when hiring, to ensure long term retention and develop financial prudence in businesses to protect employees, assure profits and safeguard jobs.