Smaller Companies, Bigger Decisions
Newsletter volume 1 number 11
In previous years, employers reduced and expanded staff in response to the ebb and flow of business. But that cyclic pattern of layoffs and rehiring has changed. Today, many jobs eliminated during a period of layoffs never return. That means, among other things, that hiring managers must take more care than ever to select the right person when a job opening does occur.
According to Fortune magazine, today's job-cutting companies are assuming that "the world economy faces a sustained period of slow, low-inflationary expansion" during which "prices cannot easily be raised to expand profit margins." If they can't raise prices, companies must continually find ways to streamline operations, and one way to do this is to keep a tight rein on labor costs. Proctor & Gamble, for example, has adopted a strategy called "everyday low pricing." The company has already permanently eliminated 13,000 jobs and plans to close another 30 factories around the world.
The increasing need for companies to operate more efficiently means that, more than ever, hiring managers must be sure to make every selection count.