Are lay-offs the answer?

The Foundation for Human Resources Development is organising a seminar on the impact the current global recession is having on people management at the Intercontinental Hotel, St Julian's, on May 29 between 2 and 5.30 p.m.

A line-up of experienced, hands-on professionals and business leaders who work and manage this situation daily has been prepared.

This seminar will provide an opportunity for the sharing of daily concerns in people management and the dilemmas of downright harsh decisions. On the other hand, it will share the pragmatic yet innovative manner that leaders of industry are managing and constructing a new way for success.

Johnny Sung, an eminent academic and researcher in human resources management, from the Centre for Labour Market Studies, University of Leicester, will give the keynote address.

Over the past months the global economy has faced unprecedented strain, demand has plummeted, unemployment is rising and confidence is at a record low.

For many companies, the visible signs of deteriorating sales forecasts, clients taking longer to finalise contracts, and declining revenue are already too familiar. Pressure is mounting on managers and human resources professionals to move fast and take radical decisions which often are symptomatic of insecurity rather than a well thought-out strategy.

With such an approach, the first casualty is people despite many companies' fortunes resting on them. Companies tend to cut employee hours, stop recruitment and training, and roll back company activities. These reactions drive morale to the ground and sever trust that would have taken years to build.

Redundancy is not necessarily the answer. Research by Wayne Cascio, the world-renowned management consultant, revealed that companies which laid off more than 10 per cent of their staff in the last recession have since been associated with poorer long-term share price performance.

The report by the Boston Consulting Group and the European Association for People Management says cutting experienced staff and new trainees risks creating a skills shortage that will affect the companies' ability to recover well in the inevitable upswing.

John Philipott, the Chartered Institute for Personnel and Development UK chief economist, urged world leaders to act in concert to avoid moving from a credit crunch into a skills crunch. Calls for caution and to learn from past mistakes are coming from many credible quarters; even difficult times may offer opportunities to review operations, shed outdated tasks, integrate services, trust and delegate more.

There is evidence that companies are resorting to measures that follow positive approaches by postponing recruitment, introducing periods of shutdowns, reducing temporary staff and cutting back on overtime while using this lean period to train and retrain their staff.

This is understandable as indirect costs from lay-offs are considerable, and redundancies destroy employee loyalty. The latest survey by the UK Chartered Institute for Personnel Development shows that seven out of 10 employers still consider staff training as a priority.

Locally, various companies are managing to weather this crisis while making strategic changes that will enable them to reap the benefits at the right time in the future.

The seminar fee for FHRD members is €50, for non-members €65. To register online, go to www.fhrd.org/ regform.html or visit www.fhrd.org/ registrationform.pdf for a registration form. The closing date is May 26.