Side-effect of layoffs: loss of talent | business | Hindustan Times
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Side-effect of layoffs: loss of talent

HR experts suggest rewarding performers to ensure that good workers do not leave, reports Devraj Uchil.

business Updated: Dec 10, 2008 21:02 IST
Devraj Uchil

The most damaging affect of global meltdown, and efforts by companies to cut cost, has been on the human capital. While many companies have axed their 'surplus staff', most of them have done so without much thought as to whom they are letting go.

While these layoffs impact individual employees and their lives, they also affect performances of companies because they often end up losing right people. Though voluntary attrition level is down by more than 400 percent when compared with numbers one year ago, the low morale among staff makes the talented bunch look out for safer jobs.

"In a downturn, corporate entities should be more keen on retaining performers and only this can take them see them through the rough patch," said Ashok Reddy, managing director of TeamLease, a staffing solutions firm.

"However, organisations are not good at identifying talent," Says RJ Heckman, president and CEO of PDI, an international HR consultancy firm. PDI is associated with number of Indian firms and is brining its Indian clients the benefit of its merger with Ninth House, a global leadership solution company.

"Leaders should understand the motivational needs of their employees if they want to successfully fight economic slowdown," says Heckman.

The best solution the experts suggest is also the most simple. Reward the performer. Giving incentives for performance, giving learning opportunities, visibility for talented individuals and even time-off from jobs are ways of encouraging employees.

Meanwhile, HR practices like massive layoffs and across the board salary cuts without distinction of performers or non-performers can also prove counter productive.

"While companies have to build a pre-cursor to layoffs and ensure that load of non-performers don't fall on performers, incentive is the key to boosting morale among the talented and induce others to work harder," says Reddy. A company should give a feasible time for non-performers to improve and reward performance, only then take necessary action.