How does the HR department of a company decide on lay-offs?
In any organisation where business goes down, you cannot keep overheads fixed (I am not talking about the cyclical downtrend). If the order book is not filling, you have to reduce the headcount. You must have read that some organisations are reducing the salaries of senior executives. Five years ago, you could not do that in India. What do you resort to first; cut salaries, or lay off people? In the first place, you don’t resort to reduce the headcount or cut salaries. You try to see whether you can re-deploy the same number of people for different types of jobs. If it comes to such a situation where you cannot continue to do so, then, you look at the timeframe required to tide over the difficult period. If the time frame is long, you have to cut costs by reducing the numbers. If the time frame is only 2-3 quarters, you can resort to cutting salaries. How do you describe the present economic situation? I think it varies from industry to industry. For example, the airline industry is in
Related Questions
- Accounts Payable - The department of a large company whose function is to make payments to vendors and contractors. Theres more to it than that, but who cares?
- I am the head of the HR department of my company. Can I implement Eazy Eval at my firm?
- How does the insurance company decide how much to make its initial offer?
