Is It Ethical for Companies to Hire and Then Fire? Let's Discuss the Impact on Employees' Futures

Dear Friends,

You all are aware that these days a lot of companies are cutting manpower in order to reduce costs.

I would like to raise the question, "Is this a good HR practice to hire first and then fire?" Companies are asking for resignations even if the employees are meeting expectations or making the working environment unfavorable so that employees leave on their own.

My own company is doing the same. Recently, our HR head mentioned that we are not going to retain anybody, and after every resignation, we will celebrate - jokingly. However, I am wondering if this is a final decision, then why do we work so hard on recruitments and selecting the right people? Our management is opting for excess manpower. We had over 1500 employees, but in the last six months, only 600 employees remain, and in most exit forms, employees have mentioned that they were forced to leave.

I would like all of you to shed some light on this as it seems like we are playing with employees' futures.

Expecting to see a few views on this.

Thanks,
Shweta Jaitly

Dear Shew,

I am also one of the victims. I have been working in a big limited company for the last two years. Suddenly, the company has eliminated the position of C.O., and 18 people are being asked to step down. This is the worst situation I have ever faced, and it has made me feel selfish and less professional. Previously, I used to work for the company with full dedication, loyalty, and honesty. Now, I feel completely changed.

The most surprising part is that the company has now started appointing new communication officers.

Company ki maa ki aank

This is just a situation which is prevailing these days in Companies. Every second company is cutting jobs. Why so? We are in an HR forum, and I am trying to gather different thoughts on why management chooses to hire first and then simply fire people. It is simply to share views. You might not be a victim (which is good) of this, but there are many employees who are victimized.

Regards,
Shweta

Hi Shweta,

Really, it's horrible the way these corporate giants are behaving. They have already made an impact on the layman, so now every person who gets employed would not only focus on getting the work done effectively but also on avoiding being asked to leave the company.

This issue is likely to create havoc within the professional arena worldwide. It is now our responsibility to ensure that these giants not only guarantee our job security but also a healthy future. HR professionals keep questioning our stability, but what if we, as employees, question them about job security?

Shweta, it's truly one of the nice initiatives you have taken. I wholeheartedly support the cause.

Regards,
Abhishek

Hi Shweta,

Giving sense to Management and HR. One question to ask: for reducing costs through manpower, why do we incur recruitment costs? Manage with the talent which we already have. Should not play with the future of employees; after all, they are the assets.

Regards,
Bee

Hi Shweta,

Good topic, I must say. I too approve of the idea that we should not blindly hire people and then lay them off! It's like playing with their career, not to mention the mental trauma that they might go through.

I too keep on trying to convince my higher-ups that we should first do a thorough internal study if we actually require someone new or if the work can be managed by some existing employee.

Believe me, most of the employees are more than happy if we offer them job enrichment. So, instead of giving much more to a new recruit, we can give a little more to the existing employee to share the extra work. Motivation levels of the employees would also soar!

It is the duty of HR to convince the various department heads to make decisions prudently on hiring and firing.

Much more to pen down on this but am hard-pressed today.

So I sign off here.

Tania

Hi,

This is a very serious issue now. Companies are playing with employees' future. This is not good for both the employee and employer. Because of this situation, the current working employees' mindset will change and they will not be interested in working in a dedicated manner. Even new joiners will not work properly and will always try to jump to a new company.

Therefore, employers should provide a healthy and positive environment. If not, it will harm both the employee and employer's future.

Regards,
Raman

Hi Shweta,

This is indeed one of the major issues in today's corporate world, especially in the IT and IT-enabled companies. I, being from the same industry, have come across so many people who are victims of this problem.

I completely agree with Tania. Proper manpower planning and proper analysis of the requirement for additional resources are the most effective ways to control this.

Regards,
Kiran

We are discussing only firing, but what about the persons who have broken the bond without any intimation? What should the organization do in such a situation? Can any senior provide insights on this?

Thanks & Regards

Hi Shwetha,

It's a good topic you have raised.

We call ourselves as Strategic Partners, and in this situation, you blame the company. I don't agree with you all. Is it that you just want to convince yourselves and say you are a strategic partner when you actually restrict yourselves from not going deep into the fact and analyzing the strategy of the top management?

If the company feels that it can no longer bear the expenses of manpower, it surely makes a good decision.

Let aside our soft-natured humanity as an HR professional, but be practical. If the company has no enough funds, do you think you can survive in the market by paying salaries to employees with no Return On Investment?

Why do you deny the fact that even employees cold-heartedly ditch the company and go to competitors for better perks? Why are you feeling bad if the reverse is happening to them? Take it in a positive way. Just spread a rumor that the company is not profitable, and you will see by the next payroll, you would be calculating final settlements for at least 50% of the employees.

Yes, I admit that it's recruitment costs, but that should be planned well in advance, backed by good mid and senior-level management strategy.

I hope I have not hurt the feelings of my friends and am being more practical. You will understand this concept when you work for Small & Medium enterprises, where the management struggles to bear even simple overheads like staff parties, picnics, or even administration costs like visiting cards. Correct me if I'm wrong, but I want Shwetha to reply to me.

Thanks, Shahed

Dear Friends,

You all are aware that these days lots of companies are cutting the manpower to do some cost-cutting.

I would like to raise the question, "Is this the good HR practice to hire first and then fire?" Companies are asking for the resignation even if the employee is meeting the expectations or making the working unfavorable so that employees themselves leave.

My own company is doing the same. Recently, our HR head said that we are not going to retain anybody, and after every resignation, we will celebrate - jokingly. But still, I was wondering if this is a final call, then why do we work hard on the recruitments, selecting the right person? Our management goes for excess manpower. We had the manpower of more than 1500 employees, but in the last six months, only 600 employees are left, and also in most of the exit forms, they have mentioned that they are forced to leave.

I would like you all to shed some light on it as aren't we playing with employees' future?

Expecting to see a few views on it.

Thanks,
Shweta Jaitly

Hi Shweta,

This is a very burning issue. We need to take it very seriously.

Before letting employees go, every employer commonly cites the following reasons:

1. Your performance level is very poor.

Here is my question to all the HR people: If they are not performing well, why did you hire them in your organization? Is your selection process flawed? If not, then you are not a perfect selector, and you should also be let go along with those employees.

I am not criticizing HR. Many MNCs have multiple rounds of interviews, yet subpar candidates still manage to enter the organization.

As mentioned earlier, one of our HR personnel, Mr. Bee, asks: Why can't we hire highly talented individuals during recruitment? Skilled individuals can perform the work of two average employees, leading to a 1:2 productivity ratio.

In conclusion, I want to urge all HR professionals to either not use the above reasons when letting employees go or to recruit skilled manpower.

As an HR professional, I should not criticize other HR professionals. Please do not take this the wrong way, but if you disagree with my perspective, feel free to share your thoughts. As a newcomer, I have a lot to learn from experienced individuals like you.

Thanks & Regards,
Uday

Hi Shwetha,

Hi Shahed,

It's a good topic you have raised.

Thanks for commenting on this.

We call ourselves "Strategic Partners," and in this situation, you blame the company. I don't agree with all of you. Is it that you just want to convince yourselves and say you are a strategic partner when you actually restrict yourselves from going deep into the facts and analyzing the strategy of top management?

Firstly, I do agree with your valid point that we are Strategic partners, and I must clarify that I am not blaming the company. I have raised the question of what made the top management decide that we need to recruit manpower, and then after a couple of months, suddenly cut jobs as a cost-cutting measure.

If the company feels that it can no longer bear the expenses of manpower, it surely makes a good decision. A good decision is to fire any employee, but on the grounds of non-performance. I openly say that at times management also makes wrong decisions, and when some subordinates try to give their viewpoint, it is usually termed as "confrontation." It won't be wrong to say that at times our risk management strategies also fail. It might not cause harm to management, but it is a genuine loss to employees who work hard but are still left demotivated.

Let aside our soft-natured humanity as HR professionals, but be practical. If the company has insufficient funds, do you think you can survive in the market by paying salaries to employees with no return on investment? Being professional and practical is excellent, but "HR" itself means Human Resources, and its setup in the company is not just for the company but for employees' well-being. HR people are also known as trustworthy individuals. HR acts as a bridge between management and employees.

Why do you deny the fact that even employees cold-heartedly ditch the company and go to competitors for better perks? Why do you feel bad if the reverse is happening to them? Take it positively. Just spread a rumor that the company is not profitable, and you will see that by the next payroll, you would be calculating final settlements for at least 50% of the employees.

I agree with you on the point that "employees cold-heartedly ditch the company and go to competitors for better perks," but in this situation, HR also has to take hard measures to address it. I am not criticizing the HR community, but there are HR professionals who make false promises to fill positions and play with an employee's future. In fact, on this website, you may find several issues related to that.

Yes, I admit that it incurs recruitment costs, but that should be planned well in advance backed by good mid and senior-level management strategy.

Thanks to you for agreeing at some point.

I hope I have not hurt the feelings of my friends by being more practical. You will understand this concept when you work for Small & Medium Enterprises, where management struggles to bear even simple overheads like staff parties, picnics, or even administration costs like visiting cards. Correct me if I'm wrong, but I want Shwetha to reply to me.

Dear, I am not hurt, and I hope that you also take this conversation in the right way. By the way, I used to work in India's biggest retail chain but recently shifted to a mid-sized MNC in Delhi. But, my dear friend, the situation is the same.

Lastly, I must say that this issue is not to raise any comments on any said strategy, but it was posted to get different mindsets' views on it.

Thanks,
Shahed

Thanks,
Shweta Jaitly

Hi,

All of us have been giving our inputs on this topic. Following comments are my opinion.

While all of us agree that manpower planning should be done properly, however, the management might be taking all this into consideration. For example, from the time a deal is signed and the project is transitioned and executed on a pilot basis, there is a time lag, and the manpower planning takes place as per the deal. Suddenly, due to some crisis or unforeseen circumstances, if the deal is canceled, which might not be due to the fault of the company we are working for, we might lose our jobs. But did the company always have this policy of hire and fire? I don't think so.

The second scenario might be one of the companies which is our client, might not be in a position to operate anymore due to losses, where it affects our revenue and we might have to look at either repositioning ourselves or losing some of us. In this case, there might be employees performing at 80% and the others at 90%. Both are considered to be good performers, but in situations like this, the 90% of the performers would be preferred over the rest.

The third scenario might be that our company itself is troubled due to unforeseen external factors, so how can the company keep its operations going on? It cannot or will have to accommodate the job cuts to see that at least some of the employees have jobs by trying to get the company on track.

Despite all these issues, which are continuously ongoing, the management, I think, never discourages any employee-oriented programs and facilities for the employees in either good or even average times.

So why are we only discussing the tough times we face when being asked to leave and not appreciating the employers for taking care of us in the good times?

If we are in the HR profession, I think we must be able to evaluate some of the parameters and be able to take a certain stand that can be a win-win situation even in these troubled times. If not possible, then some hard measures as well. HR is not only about creating employee welfare and development-related programs but also to be of strategic value to the organization. Always remember we are the face of both the employees and the employer and will need to act accordingly.

This is my opinion, and I stand corrected if I am wrong.

Hi Siva,

I agree with you as this was just one aspect of Management. But there are companies which are very employee-friendly also.

Regards,
Shweta

Hi Sweta,

Today, our company sacked one employee. He was recruited as a Mechanical draftsman and worked with us for 2.5 months in that role. However, it was reported by his subordinates that despite being 47 years old, he lacked the necessary knowledge to supervise them effectively.

As a result, my boss reassigned him from the Design department to the Production group to work as a supervisor. After 8 months with the organization, he was terminated with an additional month's payment.

I hold my engineering group accountable for this situation. Their inaccurate forecasting of the manpower requirements led to placing a draftsman in a role unsuitable for him, that of a production supervisor.

I am seeking input from senior members on this matter.

Regards,
Dinamani

Hi, Shweta,

Two days ago, we saw the same situation result in Greater Noida. The CEO was killed by a worker. Yes, in today's scenario, this issue is very critical, and the HR role is very important. I must say that manpower planning and industry situation can play a vital role in solving this problem. If HR can make proper manpower planning while sitting with production and finance guys, maybe this situation can be minimized. This is my thinking.

Regards,
Samir Arya

Hi Shweta,

If this issue is viewed on humanitarian grounds, then it would be unfair and unethical. However, being a professional, you have to obey the orders and instructions from the seniors. A quote from ARMY ethics states: "1st is your nation, 2nd is the honor, safety, and welfare of the men you command, your family, friends, and society come 3rd, and your own dignity, pride, and comfort are always the last."

If this is taken to a civil context, it follows as: "1st is your organization, 2nd is the honor, safety, and welfare of the men you work with, your family, friends, and society come 3rd, and your own dignity, pride, and comfort are always the last."

So, don't worry and take it professionally.

Hi all,

We all agree that HIRE & FIRE is a result of poor planning. This also highlights that our accuracy in analyzing the market and future business opportunities is lacking. We have failed to analyze the requirements and business growth. When the business plan fails, every organization should equip themselves with a contingency plan, in simple terms, Plan B when Plan A fails. This way, it can retain performers in the organization rather than lay them off.

The current situation is a trigger for all corporate giants to work towards risk management and continuity plans for their human capital.

Hello Shweta,

It is sad to see good manpower going down the drain, but let us all agree on one thing: retrenchment is a reality in which we live. It is good to know that you sympathize with employees. When it comes to saving the company from collapse, it is the juniormost that get axed; I know the pain all too well. What can be done is, at least, the employees should be given ample time to hunt for another job and also use the office resources to do so. This market slowdown did not happen overnight; it was management which failed to foresee such a scenario. They could have planned the layoff a little bit better.

Dear,

Hiring and firing is most common abroad. In fact, this kind of system is implemented and followed by most of the MNCs. They believe that the money invested in hiring new employees is far less than training them. Even if employees are trained, there is no guarantee that they will perform well.

Now, this has become a mantra for management. They hardly think twice before hiring or firing employees.

Hi,

This must be a good topic to discuss. I also once faced the same problem, and this reduces the attitude of people who worked sincerely for the organization. It also puts a question mark on employees' career development.

Thanks,
Radha

Hi Shweta, I can understand your anguish. The bigger the giant, the more ruthless the layoff. It is sad to see competent people leave. Firing to cut costs is a common practice during a market recession, and these decisions are taken at the highest level, or they should be. The decision has to be deliberate and not panic-driven as it appears in the case of your organization, as it involves careers and lives.

Whom to fire is the next decision. Here, the HR department has to be incorporated. Some basis has to be set to fire employees; it cannot be done arbitrarily. Relative merit in terms of competency, loyalty to the organization, willingness to work for less, spheres of expertise are some of the parameters for relieving employees. Making life hell for someone simply to ease them out is cruel and, to a large extent, immature/unprofessional. It is always better to be honest and upfront.

To a large extent, the employee should be convinced that the organization has not retained someone less competent than them and fired them. Firing to cut costs cannot be wished away, but it can definitely be handled in an honest, mature, fair, and humane manner.

Hi Shweta,

This is a good topic for a debate. In fact, these things are happening very frequently in almost all sectors, be it IT, ITES, BFSI, Pharma, Airline, or any other sector.

According to me, this is a way of reducing costs, increasing profits, or reaching the breakeven level to sustain in the market.

Companies that are project-based face these kinds of problems more often. When they have good projects or orders, they recruit people in numbers. However, when they finish up these projects and do not have similar projects or orders in hand, they start laying off people. This is a part of the business, and they do it.

In most cases, people who are sitting on the bench or are less productive are fired or asked to leave. Productive individuals face this situation rarely. Therefore, one needs to work on themselves to have the right skill set required for the job in any sector.

It all depends on the economy. If it is growing, it will generate more jobs, and even people who are less qualified will get a job because the demand is high and the supply is low. Conversely, when the economy is down, only those people who have the right skill set are secure because companies become very selective in choosing people. They look for individuals with multiple skills to have less manpower and maximum productivity to sustain in the market.

HR is a significant part of the business, and it is crucial to understand this from a business point of view why it is done.

I have shared my viewpoints on the subject. I hope it will help you understand this better.

Regards,
Surendra

Dear Shweta,

In your reply to Tania on WHY HR?, you have mentioned:

HR acts as a recruiter, Cost Centre, organization developer, manpower projection, budget projector. HR helps the organization to perform at its best by providing the right person for the right job...

I think you should act according to what you quote. When you state that you are the Cost Centre, Manpower projection, Budget Projector, then you should understand how the company is performing. Is it profitable? Can it accommodate enough manpower? I believe everyone agrees that the company cannot be blamed, but you are stretching the issue too far. If you quote it, then you should mean it.

Shweta, in your previous message, you mentioned:

"Dear Friends, You all are aware that these days a lot of companies are cutting manpower in order to do some cost-cutting... I would like to raise the question, 'Is this good HR practice to hire first and then fire?' Companies are asking for resignations even if the employees meet expectations or make the working environment unfavorable so that the employees leave themselves... My own company is doing the same... Recently, our HR head said that we are not going to retain anybody, and after every resignation, we will celebrate - jokingly. But I was wondering if this is a final decision, then why do we work hard on the recruitments, selecting the right person... Our management goes for excess manpower... We had more than 1500 employees, but in the last six months, only 600 remain. Also, in most of the exit forms, employees have mentioned that they were forced to leave... I would like you all to shed some light on this as aren't we playing with employees' futures? Expecting to see a few views on it... Thanks, Shweta Jaitly"

Thank you.

It's a good topic to discuss in the present scenario. Hard times are being faced by employees. When things were going well and until the US economy took a downturn, everything was fine. Many businesses had signed deals by showcasing the strength of their workforce, but now, due to financial issues caused by the US economic recession, they are asking employees to leave. Instead, they could explore other alternatives to cut costs, as suggested by our friends in this forum.

Looking from a business perspective, business owners had planned extensively to stabilize their operations and create numerous job opportunities. Therefore, they must have considered various alternatives before deciding to reduce manpower to sustain their businesses during challenging times.

Please let me know if I am mistaken. :icon1:

Vamsi...

Hi,

In a lighter note, you just can't fire without hiring. Thus, hiring is a must!

But on a serious note, I think we should look at the business perspective too. As we have been going global, our economy is not insulated anymore, unlike in the past. If the entire globe is affected, we are only natural victims. Would you like to say that Lehman Brothers filed for Chapter 11 to get extra happiness?

In our current legal system, it is not an easy option to fire. Thus, I personally don't think companies enjoy shutting down in part or full. They also have other stakeholders in addition to employees.

The only issue here is how wise the downsizing process is. How kindly it is handled and how much care is taken to inflict the least pain. I assume there is going to be no zero pain situation.

And part of the organization downsized only means that the other part is right-sized for survival. Some jobs are saved.

How many HR managers know that they are hiring so as to create a flock ready for firing? No one knows the future. Not even Merrill Lynch :-)

Regards,

Hi All,

Well, I have by now seen posts in favor and against the topic. It's eventually good, especially I'll comment on Shweta and Shahed's hard work in putting their posts. Good job done by both. On one hand, the issue raised is worth getting noticed itself, and on the other hand, as an employee, we need to understand why these things happen.

I must appreciate the views mentioned by Shahed, but friend, don't you think that somewhere down the line it eventually affects you even if you are an employee of a company? And if not, then a time would come when it'll show its effect on the coming generation!

Whatever might be the reason, I hope things would start becoming favorable for both employee and employer. Ameen. :icon1::icon1::icon1:

Hi Shahed,

Yes, I have mentioned and have acted accordingly, but I guess you have not got it right...

Cost center, Manpower projection, Budget Projector, Budget projector - Let me be specific this time as I know you again won't be able to understand...

By all the terms mentioned above, I meant proper manpower planning (which is done by HR only). By Cost Cutting Measures, I meant again cost cutting on the company's expenses such as stationery, printing cost, visiting cards, conveyance, traveling, etc. (Might be in your Mid-Sized Company these things won't, but in ours, we have major billings on these) and yes, putting the right and skilled people for the right job is HR responsibility. I understand that HR works according to the management decision but still...

As far as the Company's performance is concerned, it has to be measured in terms of projection of manpower, cost involved in it, and majorly the strategy... action plan we work on... This has to be done before sanctioning the manpower with the assumptions on what would be the recruitment cost and what would be the risk involved if not able to meet up with the deadlines...

In fact, if I think you haven't read my reply on your post, I have clearly stated that I am not blaming Companies for that... It is just an issue on why to hire people when really not needed... How can the Management of any company who thinks that be so mean?

If somebody is not performing, then Firing makes sense, but just because management thought they will make it but unfortunately didn't... doesn't make sense to fire anybody... I agree that what if employees break the bond or leave the company... in that case, my friend HR does take hard action - Legal... and also I am not pulling the string too long, I was replying to your specific Queries...

This is about the management not about you and me... it would be appreciated if this can be stopped here as we can't change other's mindset... might be with you it's okay, but personally with me, it's not... There should be a valid reason for the sacking of any employee... Excess manpower indicates bad strategies (if not required)...

You are being tough on this, but as an employee, if your management will fire you without giving the proper reason, then you will understand the real pain of people who go through this... There are lots of employees who are equally talented but are victims of this new management funda...

I am again mentioning this not against HR, but this is just a thought to improvise the things if happening much around... A thought to plan better strategies... I strongly disagree on this, but I am sure you must be a tough HR in your organization... Request you to please don't make this argument personal... be it for the views only... I am disagreeing with the management decisions, not yours...

I am happy that you work in some organization where might everything is perfect, but I used to work in an organization where skillful employees were hired but then sacked just because of the excessive manpower... I mean every single word I have written... Hope that no more clarifications would be required, and will appreciate if not taken personally...

Thanks
Shweta Jaitly

Dear Shweta,

If the organization has good HR management and is wisely utilized by other departments, there is no need to discuss cost-cutting or manpower reduction. They can plan manpower according to production/operations volume very effectively.

Companies do not take such decisions willingly; please understand their situation too. For example, if 50 employees are let go from a company of 200 employees, understand that such a move is made to save the remaining 150. Take it positively. At the same time, companies must have a clear relieving policy in place, and proper notice or compensation must be given to employees. If this is not done correctly, please stand up for your rights, be strong, and consider issuing a legal notice. Let us not be the last ones affected.

Regards, Rajesh

Dear All,

I completely agree that these decisions are not taken intentionally, but I am against the planning we work on and then not living up to that.

I am just trying to convey that we all have to put in our effort to minimize the effect on the employees who suffer.

I understand being in HR, management doesn't do it intentionally, but even if unintentionally done, what kind of damage it could cause to any employee in terms of attitude, dedication, and stability.

I request all to please take it in a positive manner. This is not against us but, in a way, it's for every professional/working person.

Thanks,
Shweta Jaitly

Good Topic,

I think government bodies should intervene and establish strict rules to safeguard employees' interests. We can understand the current market situation and competition among various sectors, but hiring is creating frustration in our youth. I believe this practice is not leading us towards a brighter and more prosperous India. Companies should revise their hiring policies and opt for hiring on a contract basis. If employees are let go after the contract period, the frustration level would be much lower. Nevertheless, we should remain hopeful for the best. Only a few companies adhere to a hiring and firing policy. I am employed at a South Korean multinational corporation where employees have been working for over 30 years worldwide.

All the best, and make sure to conduct a background check on the company before you decide to join.

Hi,

There are posts being taken on a personal basis here. Let's avoid that; first and foremost, every thread is for knowledge sharing, so let's share it rather than arguing with each other.

As Shweta has brought up a serious concern being faced by all the major giants and even mid-segment companies to a certain extent, I would like to say that yes, it is a serious concern, and I appreciate that you could bring that up for public discussion.

We still do not know the root cause of this problem, and we are commenting based on assumptions. For every company, the reason may not be the same, such as cost-cutting. For some companies, it may be business segregation, technology enhancement (NA to IT industry), etc.

If it is due to the above reasons, it is justified that they do not require the same workforce now; the need for manpower has decreased. However, in certain cases where only cost-cutting is involved and they resort to retrenchment, it is not fair enough. For cost-cutting, you may not lay off 50% of your company's manpower. In certain cases, what is shown to the external world and the actual reasons are always different. We can only come to a good conclusion if we know the root cause, as I mentioned before.

I would appreciate comments on this.

Regards,

Hi,

The fact is companies hire when they are in profits and fire when they are in loss. One has to understand and be mentally prepared and know the basic logic of the companies' behavior. Just arguing, discussing, or feeling bad about the situation does not work out. Private companies are meant for that.

Regards,
Aqua

Hi Shweta,

My opinion is that generally organizations are not mature enough when they do manpower planning and their utilization, so they face such challenges. Secondly, whenever we think of cost-cutting, manpower is the first resource they consider, which is unfortunate. In such difficult times, it's better to concentrate on generating more revenue (Mr. Laloo Prasad's opinion on railways, which is very true), which probably is a better and easier option and professionally right too since manpower is the only resource that your competitors cannot copy and are thus invaluable.

Last but not least, when organizations have good resources, they concentrate on making policies that are harsh on most occasions, and when they lose them, they resort to mass-scale aggressive hiring, reflecting the immature nature of organizations. Would like to know others' opinions too.

Regards,
Bishwajeet

Dear Shweta,

This is nowadays tactics; unfortunately, such companies have no proper direction and are using a centralized system methodology. At this point, cost-cutting is just one excuse, nothing else.

Hi Shweta,

Having worked in the industry for over 12 years now, these thoughts have often crossed my mind. As we are a growing economy, there are both boons and banes of it. While we reap rewards of the foreign currency inflows, it is time we learn the way businesses operate globally. HR is no longer viewed as a support function by many corporates and is instead more oriented to become a business function. The business situations are very dynamic, and we have to constantly keep evaluating our position vis-a-vis the market and make structural changes accordingly. However, I'm not trying to advocate the correctness of layoffs. In my opinion, it is a very harsh truth to digest for the person affected.

While we dissect the issue here, let's also not forget the other side of the coin where companies get affected by the skyrocketing salary demands of the people they recruit and still have to go through the pains of offer rejections, no-shows, etc. This does not justify the unholy act of the employers but is also an issue to be debated as we discuss the issue of layoffs/pink slips.

I agree with Tania's views where we should do a proper introspection before we go out and hire for a new position. We also have to acknowledge that there are times when companies make a wrong decision, and it is never too late to correct it. But at the same time, we should avoid these mistakes. As an HR professional, it becomes more of our responsibility to ensure that we do not crumble under the management pressure of hiring and present them with a better value proposition that helps avoid such situations. While I empathize with the ones affected, I also accept the market realities led by the demand and supply forces that drive businesses for regular changes in their strategies, leading to such situations.

I think the solution to this issue is proper manpower planning. How? We have to align the organization's vision, long-term and short-term goals with departmental goals and drive KPIs so that we may hire accordingly and retain them.

Dear Shwetha,

I would like to shed some light on this issue.

I am working as an HR executive in Infopark Cochin. Ours is an IT company with a staff strength of around 70 in this branch. Like many others, the US recession is impacting many of our US government-based projects, and as a result, we are under immense pressure from the US headquarters to provide them with details regarding manpower utilization. We have employees working in a salary range of 8K-15K per month, and they deliver productivity based on their compensation.

During critical situations, we are compelled to lay off trainees and junior executives and hire one qualified candidate worth 3-4.5L who can think equivalent to five individuals. Sometimes, we are forced to implement such strategies for the very survival of the organization.

In this era of intense competition, we are obligated to retain and nurture the best talents. Downsizing usually impacts those employees who are considered less crucial for the company's day-to-day operations. Meeting requirements does not automatically make a person a critical or indispensable resource. Therefore, to sustain themselves, many companies may reduce their peripheral resources (support staff) to safeguard the core resources.

Hope this explanation clarifies the situation to some extent.

Hi Sweta,

I agree that this is the topic everybody is concerned about nowadays because every third person is a victim. Yes, it is true that employers are playing with employees' lives and futures. But on the other hand, what will the employers do if the world economy is not in good condition? We lose our jobs when the U.S. economy fails, and our companies do not get their projects. The employer is a businessman/person; he wants profits. So when he sees that he is not making a profit, he tries to cut down his costs. What is the best way to cut costs? Fire people. It's a fact and painful. But the other fact is we don't have a solution. Do we? 😕

Hi,

I would like to point out my view that if a company can fire a person without considering his or her career for the betterment of the company's progress, then in the same way, an employee can also quit a job for his or her better career growth. Both sides are giving importance to their own growth. So, I don't think any kind of injustice is happening here.

:neutral:

Alice

Hi,

I agree that many corporate companies do this. I strongly suggest that job analysis should be carried out before manpower planning, i.e., analyze the workload in every specific function. This would provide more insight into future recruitment needs. Conducting a job analysis would also facilitate job rotations.

Regards,
Bhupesh

Hi Shweta,

This is one of the major issues these days. The most painful part of this is when you ask an employee to leave without a proper reason. In most companies I have seen, they look towards their benefit. I personally feel that if we have this sort of situation, we should lay out a plan. We should discuss the situation with the employee so that they are aware of it and can plan accordingly. We should give them proper time to find a new job.

Regards,
Rajeev

Dear All,

I am a professional too - an Engineering Programme Manager at a reputed Automotive company in India. Now, HR is a function in any organization. Throughout my professional career in good companies (indeed doing well), I have observed that cost-cutting through manpower reduction happens because of an "open-cycle phenomenon." If this cycle is closed, then there may be a significant reduction in self or forced attrition, leading to better talent retention in good or bad market scenarios. If anybody needs to discuss this phenomenon, you can email me at ramkumarojha@gmail.com.

Regards,
Ramkumar Ojha
Programme Manager

We have been speaking about the companies that are firing employees at the cost of their careers. In contradiction to this, what about the employees who are absconding from services, not serving the full notice period, and putting the company in a difficult position as the employees do not even think of the deliverables they ought to complete. If an employee is serving the notice period, they should be doubly sure to finish all the work and ensure a smooth transition.

These are my personal experiences. I have seen many people who do not serve their full notice period; instead, they abscond from services. When contacted, they provide lame excuses that are not true.

Best regards, Sireesha

The question you have raised is very pertinent. I have experienced a similar predicament in most of the places I have worked. First, we fight tooth and nail to "hunt" the best talent for the position - the more stable he was in his past job, the better preferred he is - and then we scratch our heads endlessly to find an excuse to let him go.

Most often, I have seen hiring managers' ineptitude as a reason for this gap. Reluctance to put down a straightforward job description and list the performance measures before hiring, reluctance to devote time during orientation and probation with the new joiner more often than not result in less than expected performance (though by what standards is difficult to fathom, because they never initially put the performance measures or expectations in place).

As HR professionals, I feel we are being used as pawns. One of the CEOs I know openly says, "Let's hire whoever we get now as we need to kick start the project, we can do away with him later."

It is upon us as HR professionals to put our foot down on such matters and not get pressured by unreasonable demands of CEOs. While understanding and honoring business requirements is a must, there cannot be any compromise on the basic reason for HR's existence, which is "to look after the human resources of the organization."

Hi Shweta,

This a very good topic you erect, even me also victim of the same. Even though I my mind say what we are doing that's not good. More or less we are playing with someone career but being employee of the organization we don't have other option. But certainly I am very much impress with “Tania M” proposal. Some how its looks good.

Regards
Gopa

Hello Everybody,

I think most of us agree that yes, it is an issue, but what most of us are failing to understand is that even the companies are not aware of what might happen to them 6 months down the line. Did anyone even in their dreams assume that companies which did exceedingly well in December last year would go kaput mid this year? No, none of us did. All companies, irrespective of size, have been facing the brunt as it has affected them somewhere.

I have a different way of looking at this. It might not be the best thing to do, but it's the right thing to do. I'm sure all will agree that we would rather have 10% or 20% of the employees removed rather than keep them and come to such a state where 100% lose the job. It's a tough call but a call that needs to be made. If we shy away today, we will only die tomorrow.

Regards,
Gargi

Hi Guys,

I have seen a lot of perspectives here and must say that most of us do not agree with the Hire & Fire tendency.

I am also not in favor of the same; however, I would like to express that Hire & Hire is not just about playing with the employees' careers. I am sure that most HR professionals would agree with me that we hire employees based on Manpower Plans, which in turn are based on projected income and projected business.

Due to global disturbances and a lot of political turnovers around the world, many corporations are facing business losses, and hence all the plans for projected income, gains, and business at times go awry. They may not project their financials properly and hence may rely on good-looking paperwork (to attract shareholders) and subsequently lose track of the business.

I would say that at times, it is not in the hands of the big corporate houses, as they can't cope with the employee costs as well. Therefore, they have to let some employees go.

Shweta, maybe it's because companies are so concerned about cutting corners that they try to squeeze every penny possible from their employees. But if an employee just isn't able to do a competent job, and the company has given the employee a reasonable opportunity to succeed, then termination will often be seen as appropriate.

Thank you.

This is a true fact, and you have to live with it. If you try to raise your voice against it as an HR professional, then you should start looking for a new job too. Books are too good to be true, and reality bites.

Regards,
Fahd Khan Sherani

HR is a set of processes such as recruitment, induction, performance appraisal, training, promotion, transfer, etc.

Hiring is one process; therefore, firing is also another process.

However, if your organization is not professionally managed, these processes can be misused. For example, a well-balanced organization plans its manpower needs carefully and avoids excessive recruitment based on the business plan's forecast for the next five years.

Once manpower planning is completed, the salary budget is prepared based on revenue generation and profit margins to reward employees through compensation or remuneration.

In cases where management is unaware of HR operations, they may recruit surplus staff without proper analysis, influenced by certain department heads or other reasons.

This practice is not advisable because an organization should not hire employees if they cannot provide better prospects within the company. Companies unable to afford salaries or maintain surplus staff are not economically viable. The salary or wage costs of any organization should not exceed 10 to 12 percent of operating costs.

It is unfair when employers do not share revenue windfalls with employees during market booms or protect employees during downturns. Many CEOs resort to downsizing to reduce operating costs and impress business owners, a common error among employers.

Every time I join an organization in India, employers often claim to have surplus manpower and consider engaging them as a form of charity. However, in reality, they are using outdated technology from the 1970s, 80s, or 90s, which is labor-intensive and cannot be compared to automation in the 2000s.

Today, except for some sectors, technology is automated and less labor-intensive. The workforce now requires more intellect and is target-oriented. Employers should not resort to such drastic measures unless absolutely necessary.

However, the question remains, who will hold accountable those greedy individuals who make employees scapegoats for their actions?

Kind Regards,

Sawant

Dear Jaitly,

Cutting costs, downsizing manpower is one of the tools. There are other tools/practices such as cost reduction in the usage of materials, reduction in manufacturing time, reduction in utility costs, etc.

If the company is really in trouble and in the red and is following all the above-mentioned methods, it is fine and acceptable as it is the right of the employer. If the company is only downsizing manpower and not taking any other steps to reduce costs, something is wrong and the motive is different.

Being in HR, you must understand one thing - whether the manpower deployed is in accordance with the approved organogram or in excess, or the company has opted for more sophisticated technology where downsizing is necessary.

In the case of workers/employees falling under the definition of workmen under the ID Act, a different procedure is to be followed, whereas in other cases, a different approach is needed.

Now you can judge whether your employer is doing the right thing for the right purpose or otherwise.

Patrudu

Hi Shweta,

There are lots of facets to this discussion. Hire and Fire is what the Private Sector is all about! It's only over the previous decade or so, with technology revolution and overall development and growth, there was a definite need for skilled and talented employees, and HR gained importance like never before. Various HR practices were relooked at and reinvented to attract, motivate, and retain employees.

Rapid expansion and competition in the markets drove various employers to expand their employee base, giving focus to deeper aspects like personalized marketing, customer service, door-to-door service, etc., to achieve business targets over and above the existing competition. But whenever there is a setback in the market conditions, the companies suffer and are forced to cut costs, and the first chop falls on the redundant staff.

We cannot truly state this is wrong or right because it's a situation of survival for the company. On the other hand, it is a blow to the employee's budding career. The recent incident at Noida where the employees attacked the CEO clearly reflects the reactions and consequences arising out of this situation.

Another important aspect now adding a new dimension to the scene is the diminishing loyalty of employees in pursuit of higher pay scales and benefits. Employees also do not exhibit deep attachment and loyalties while jumping for new jobs despite existing employers offering higher pay, at times. There is a high rate of churning in BPOs/KPOs despite the attractive incentives they offer. So it's a "No Obligation" either side situation!

Prudent organizations always adopt the policy of systematic Manpower Planning. It is wise to continue to do so and engage temporary staff for any work expansion that is required for the short term. On the other hand, the advice for employees is to continuously qualify themselves academically and be aware of the market conditions and aspire to seek employment in companies having a reasonably safe and good track record of recruitment practices. Higher academic qualifications would offer self-employment opportunities and also enable one to set up own consultations, etc., to tide one over during the non-employment period.

It is always imperative on the part of employers to be extremely sensitive to the method adopted in conducting the cost-cutting exercises, communicating to the employees, and affording all possible cooperation in making the handshake pleasant. Employees, on the other hand, have to demand a more participatory role and try to assist in suggesting ways to the management to reduce the impact of drastic cost-cutting measures. Again, an active HR role.

Ironically, despite all the importance and contribution of the HR department to Organizational Development, in typical layoff conditions, it is the HR dept that is targeted first for redundant employees!

Good topic for discussion. If we discuss at various forums continuously, some amicable solutions might arise somewhere. After all, Man himself is a Survivor!

Good luck.

Jyothi

Dear all,

Asking for resignation is the shortcut method for cost-cutting. Employees are forced to resign for silly reasons to reduce the manpower. But in my view, it is a costly affair for the long term. Firstly, good employees will not be available when needed. Secondly, recruiting and training new employees will cost more than retaining the talent. Thirdly, due to the lack of job security, no one will refer their colleagues to the company. Lastly, the company will lose faith in the market, and not only will placement agencies refrain from working with the company, but clients will also try to avoid it.

Most importantly, in these types of companies, their bosses get promoted or receive good increments based on these actions. At that time, nobody comes forward to explain the true meaning of cost-cutting.

Thanks and Regards,
Manoj Kamboj