|Dr. Ed Ng, assistant professor of human resource management|
With stories of a recession and job losses dominating the news, Public Affairs asked Dr. Ed Ng, assistant professor of human resource management at Cal Poly Pomona, to share his insights into today's workplace issues.
A member of the university's Experts Online, Ng's research is in the areas of employment equity, workplace diversity, work values and organizational effectiveness. He is part of a research team that has recently been awarded a $158,000 grant to study shifting career expectations and work values among different generations, particularly Gen Y.
Q: Generally speaking, what does a recession mean for businesses and employees?
A: The “R” word is usually not uttered because nobody wants to acknowledge it is here. The biggest concern is with consumer confidence. When a recession hits, everyone knows there will be job losses, and consumers will start tightening their belts. When nobody spends, then there will be less demand for goods and services, businesses slow down and people lose jobs. This creates a vicious cycle, which is why the Fed doesn't like to declare we are in a recession until several quarters into it.
Q: Why do companies choose to lay off employees?
A: Because it is the fastest and easiest way to cut costs. First, payroll usually makes up the largest item of a firm's expenses. If you look at a firm's operations, many expenses are fixed (such as lease payments), while payroll expenses are much more variable and easy to cut. It also appeases the investment community when management is seen to be taking strong actions, such as laying off employees.
Q: What are some of the benefits of layoffs?
A: From an employer's perspective, this is a good time to get rid of less-productive employees and restructure the operations of the firm to make it more efficient. This is especially true for organizations that have piled on middle-level managers during good economic times, but these functions are no longer necessary.
From an employee's perspective, this could be an opportunity to reassess your career directions, especially if you have been laid off. When you are busy and engaged in your work, there is little time to reflect on your career and work life. You also become “competent complacent” because you are good at what you do and you don't want to change that. For example, many laid off employees have taken the time to rediscover and reconnect with their families. Some took the leap and started their own businesses. Others changed their career directions entirely. Switching employers can also improve your career prospects. Being laid off could turn out to be a blessing in disguise for many.
Q: What are some of the drawbacks of layoffs?
A: For employers, the main concern is with negative group processes, including the feeling of insecurity, low job satisfaction, low morale, and aversion to creativity. Even good employees can feel uncertain about their jobs and leave while they can. Those who remain experience guilt, or what's called “survivor syndrome.” Productivity inevitably goes down. If you take that into account with the workload that is left behind by those who have left, the planned efficiency often does not materialize. Employers also should be concerned with their reputation as employers because that impacts their ability to recruit in the future, and with union relations.
For employees, there is always a huge personal cost in terms of a blow to the ego, self-esteem, loss of confidence, ability to regain employment and financial concerns.
Q: What can employees do to recession proof themselves?
A: Employees should demonstrate that they can be advantageously employed elsewhere in the firm, even if their position is eliminated. Be flexible with your availability, take on additional responsibilities, cross train and learn a colleague's or your supervisor's job. Stay current with the latest and greatest in your field and occupation. That means being an early adopter, not a laggard. Lastly, help out your employer whenever you can, like staying late or taking on extra work. Your employer will notice, and it will pay off in the long run.
Q: What can someone do to improve their prospects if they have already been laid off?
A: First, make sure you have a current resume. Even if you are employed and have been for a long time, it is always good to have a current resume in case a headhunter comes knocking.
Make sure people know you are looking for work. Take out the Rolodex and connect with people who can help. My class survey shows that a quarter to a third of the students found work through connections or someone they know.
Also, take time to discover yourself — your strengths and weaknesses — and also research contemporary jobs and organizations. Make sure you have the right skills and attitudes to be re-employed. Finish off the extra credential you have been working on — whether it's a degree, computer skills or language competency. If you have been thinking of going out on your own, as an independent contractor or small business owner, this is also a good time to explore that opportunity.
Lastly, make sure you have a good social support network of family and friends. They can help in the encouragement department and keep you focused and motivated.