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Topic : recession
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Created by : Manish Gaurav, Chairman, B2B Logica Pvt. Ltd.  | 07 19 2010 07:44:00 +0000
Activity:  1803 views;  last activity : 11 30 2011 10:50:48 +0000
 
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THE PREVALENT  TREND IN IT COMPANIES IS HIRE AND FIRE.NO WONDER THEY HAVE MADE THE RIGHT USE OF RECESSION.


By s.baalu , Consultant, XYZ LTD  | 07 29 2010 14:11:57 +0000
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Amit, when companies face pressure on their bottom line (whether recession related or otherwise) they find unique ways to overcome them.  Layoffs is one of them and this is rampant in USA/Canada/UK.  Companies with deep pockets can withstand to some extent and they try to minimise the impact by identifying departments where they think they can execute layoffs.  The Departmental head (VP/Director) of these department is asked to offer a Golden hand shake.  This is first step.  If this does not achieve the targeted numbers then pink slip is provided to the remainders.  In this lot sometimes there are employees who are very productive but the company cannot afford them so they let them go.  Mind you, any company irrespective, has one simple logic "Can I afford......." and accordingly they act.  Companies, when they layoff, do not act from their heart or mind they act based on the bottom line.  Then there are Companies who have meagre resources who simply effect lay off based on certain criteria which more than likely affects those employees who think they are very qualified and best.

Hope this replies your question.


By Raj Bulland, Freelancer, Telecom/ISP  | 07 28 2010 07:00:39 +0000
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Layoffs due to acquisition, mergers is to bring in the synergies.  This is but natural.  this is a separate issue.  What we are discussing is layoffs due to Recession. 

If you see what I said is company offers a Golden Hand shake or reduced hours.  People with qualifications and in demand skills will definitely accept the hand shake and leave.  The company has no choice but to re-hire these skills even in recession.  Others would prefer staying on as they will find it difficult to get jobs because they will have to compete with thousands and but natural they will not get what they want.  The best case for them would be stay put with reduced hours.  That is atleast somewhat better than to be unemployed and struggling to find a job. 


By Raj Bulland, Freelancer, Telecom/ISP  | 07 27 2010 08:55:20 +0000
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Giving the best example of impact of firing and re-inforcing my theory of Employees are the biggest Asset......................Sprint Canada where I was responsible for Budgeting had a bad time due to losses.  To lower the losses it started firing which had a rippling effect.  Firing caused low morale, low productivity, no one worked to retain customers (the biggest asset an organization can have) which resulted in more losses that again demanded more firing.  Eventually Sprint Canada was up for Sale or take over target in business jargon.  No Company came forward because it lacked the assets (key exployees who were fired or who left due to uncertainty).  This was the second largest Long distance provider in Canada.  Eventually a telecommunication company (Rogers Communications) took over for peanuts.  As an Employee I was holding shares of the company.  My average cost was $6.25 and Rogers took over for just $0.05 per share.

This is the live example of firing, firing and firing.  The objective of delivering the bottom line (profitability) and shareholders value was lost as the Senior Management was adopting first aid approach and was always in Fire fighting mode.

At the end let me make it clear.  I am not opposing anyone as both the aspects of firing "Yes" or "No" are right and nothing is wrong.  It's just that I am a strong supporter of "No" based on my practical experience in the part of the World where "firing" originated from (USA/Canada)


By Raj Bulland, Freelancer, Telecom/ISP  | 07 27 2010 06:13:54 +0000
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I respectfully disagree with Amit Misra's argument, specifically, about retain vs retrain.  I am speaking from my own personal experience.  Any and every company works on two objectives - Profitability and Shareholders value.  No matter what you are, what you do, what you say or what you think at the end of the day the above two objectives are of prime importance.  I am speaking from the close encounters I had with Number Crunching (Budgeting). 

When you fire employees it affects them and it affects the morale, productivity and loyalty of the existing employees too.  In this scenario most of the employees work just to survive, no one works for the betterment of the Company. 

Alternatively, as I said earlier if you offer employee/s a choice between Golden Handshake or reduced hours, ones who go - go with their choice.  Ones who are left continue on with the same zeal, enthusiasm, spirit and teamwork (most important).  Everyone works with the same goal - to get the company out of the hole.  When good times return every one is in a position to take the advantage.  That's the charm of retaining.  If on the other hand massive layoffs had taken place now the company goes on a hiring spree.  No matter how experienced and knowledgeable the employee is he surely takes time to settle down, in the interim resulting in productivity loss.  This company now is in the mode of catching up vs. the Company who had not laid off and who had retained.

Best Examples are the Auto Industry Giants - GM, Chrysler, Ford - during recession they reduce the shifts/hours but retain the employees and take off when good times return.


By Raj Bulland, Freelancer, Telecom/ISP  | 07 27 2010 06:04:11 +0000
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Recession is an excuse using now a days by so many employer to sack the employee or used for cost cutting.


By SHRIKANT MANOHAR DANKE, Zonal Manager / Sr. Project Manager ( Civil Engineering), Kumar Properties  | 07 22 2010 15:27:37 +0000
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yes !!
By Ajay Ziz, Dy. Registrar,, University of Jammu  | 07 22 2010 11:10:59 +0000
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Yes its the new trend of IT companies and also effect this decision on salary increment.These two things is a new way to harsh the employee.In other words u can say that check the patience's of employee
By Deepak , M.Sc student, Ocean Net Technologies  | 07 20 2010 16:17:48 +0000
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Yes it is just a reason to fire employees, many companies could have managed its employees but they don't want to take risk. So they layed-off employees......     


By Neelam Mishra, Software Developer, BEA Systems  | 07 20 2010 11:14:17 +0000
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hi , this is urgent.Please give your valuable suggestion.for more than 1 year i am working in this xxx IT company.While joining as a fresher , i signed 2 year bond. Probationary period is 6 month.Here there is sick leave and also vacation leave available.But he never gave leave without reducing salary of those days.Suddenly he terminated me from job,coming month he must give increment for me.I gave good performance,he also praised me for my performance many times.For us weekly sunday only holiday meanwhile I am working for more than 11 hours daily in this company. He also asking us to work on government holidays, salary for these day is not double pay.Now he is saying that my performance was not good.So terminating from job like that.What i must for at this situation.
By Mano , B.Tech/B.E. student, Anna University  | 11 30 2011 10:50:47 +0000
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Please correct me Raj if i am wrong, but you are offering that company should allow to leave those who are competent by the virtue of Golden handshake and retain those who do not believe that they are competent enough to get another job. Thats a good solution from an employee but would turn up to be an suicidal attempt for organization. 

I have seen 9 layoffs in last 2 years(fortunately i was retained all the times) and i don't believe that i would have accepted a pay cut when i know that i am part of a revenue generating group. My organization would never take chance to cut my Pay so that i opt for golden handshake. 

I have also had the my fears of being laid off but still i believe thats part of professionalism and there is nothing to make it an emotional issue out of it. 

 


By Amit Misra, Software Engineer -4 , Juniper Networks  | 07 28 2010 06:35:28 +0000
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Recession can not be an excuse to fire employees. It should be the preregotive of the company to sustain suing reduced hours of working coupled with sustainng salaries.


By anantha krishna nayak S, Test consultant, Brain eye infotech  | 07 28 2010 06:03:47 +0000
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I appreciate your point of view Raj, But During recession acquisition, merger, and spin off's are few strategies to bring in more money to keep the organization operational and if such a case arise organization has to lay off employees in order to show their organization a financially viable solution.

One Simple question if I am a technically sound professional why would i accept pay cut? Instead of taking a pay cut i would prefer to join another company and if so happens company may loose one resource whom they want to retain but they will end up with the resources which they might not want.


By Amit Misra, Software Engineer -4 , Juniper Networks  | 07 27 2010 07:24:52 +0000
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I believe that its organizational limitation that in low waters they have to reduce the weight. Employees not only take salary but a fixed cost is also associated with each employee, Like your seating space, cost of licensee softwares, gratuity, Paid leaves, Insurance, Support staff, resource Managers. 

reducing salary/working hours or limiting other facilities will create discontent among all employees and will add up to overall negativity, while let go some people will create an short term jitter but things will streamlined once that jitter is passed. 

It is observed that a firing event has its ripple effect up to two months and employees regain the momentum after that. 

It is not retain vs retrain, it is suicide vs fight. During economically unfavorable situations organizations try to survive and stay afloat rather than thinking of future cost.

If an engineer has got skills one company will fire you and 10 companies will be ready to hire you, we are in a knowledge based competitive sector mostly working and serving western word, it is always better to realize the situation ourself and be mentally prepared. 

 


By Amit Misra, Software Engineer -4 , Juniper Networks  | 07 27 2010 04:24:53 +0000
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Recession should not be an excuse for firing the employees.  Employees are the biggest asset of the company.  To reduce the exposure the company can find unique ways like reducing hours, reducing number of days etc.  Once the recession is over the companies who have fired employees go on a hiring spree which in long term is very costly.  Remember it is cheaper to retain than retrain.  Research has proven time and again that companies who do not fire employees prosper in long term due to employees loyalty.  Companies that adopt a first aid approach by firing and hiring gain in short term but lose big time in long term.  I have been closely associated with Budgeting for the second largest telecommunication company of Canada and can vouch what a difference firing can make to the bottom line of the Balance Sheet


By Raj Bulland, Freelancer, Telecom/ISP  | 07 24 2010 07:34:08 +0000
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Recession can not be an excuse to fire an employee not only to cut the cost but also if you retain an employee during recession he will feel more motivated to work for the organization. Although empirical results show that almost all the CEOs followed the the Idea for cost cutting but still if CEO has capability he should prove that during recession how to bail out without compromising the CSR and ethical considerationshow that
By Anupam Pandey, Asst. Manager/Manager (Technical), Indian Air Force  | 07 22 2010 15:58:32 +0000
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hire and fire, use and throw are imported from west and managements are following are following these without consideration or plan how to use the employees in a proper and befitting manner for improvement of business.  Take the case of VRS in banking sector in the year 2001at the instance of the government of the day, most banks blindly implemented this causing shortage of talented man power and an exception was corporation bank which argued its case of retaining the employees duly explaining the need for continuing the staff strength.  One knows what happened to the other banks which went through many phases of up and down, whereas corporation bank kept climbing high and high


By kanukurthy sudershanrao, Operations Manager, Andhra Bank  | 07 22 2010 15:05:12 +0000
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Well, whether good or bad the relationship between the organization and the employees should be kept cordial and in tact. Any organization's success depends upon the group efforts & the team of all employees. When the employees contribute for the growth of the company, it is not fair on the part of the organization to fire employees during recession. All organization should have clear policy in recruiting and well thought out man power planning in order to sustain the difficult periods. Just like that appointing people during the progress time and sacking them during the difficult periods shows the organization's inability to meet the challenging times. In my opinion sacking just because of recession is not acceptable.In stead, the company should be able to deploy employees in accordance with the necessary requirements in order to keep smooth sailing.

Thanks Mr.Manish Gaurav.     


By NATTERAJA R. ARIKRISHNAN, GM-Projects, Bentec Electricals & Electronics Pvt. Ltd  | 07 22 2010 10:52:55 +0000
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No its not...


By Manish Gaurav, Chairman, B2B Logica Pvt. Ltd.  | 07 19 2010 07:54:46 +0000
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