How to handle pink slips

The world is going through a big shift currently and lay-offs are taking place left right and centre. How should the companies that are trying to shore up their finances approach lay-offs in the right manner?

   
how to handle pink slips

What would be a better way to fire employees? There is no simple answer to this question. According to experts, firing is a necessary evil, but it is also the most difficult thing to give pink slips. That’s just the way running a business goes. While it’s never fun to fire an employee, the fact is that it is happening. Post the “Great Resignation”, the era of massive lay-offs has begun. With numerous tech companies on a lay-off spree, it’s almost on a daily basis that managements and employees are being put through the grind worldwide.

Gary Vaynerchuk, a serial entrepreneur, author and internet personality who I follow on LinkedIn talks about how to approach lay-offs. He says, “One of the things I’ve struggled with in my career is how much it hurts to fire someone or have a lay-off…with the economy on shaky ground around the world, many of you (employees) will have your first taste of this terrible event…compassion and empathy are very important. And remember, many won’t react well at first but being honest and kind and as generous as you can be play a part in how they feel about you in the future.”

That’s the emotional aspect of firing people. But the lay-off wave is on an ebb now on the back of a recession, the funding winter and global money crunch. Currently, many organisations are going through major changes with the aim to survive the heat. Talking to SME Futures, Daya Prakash, Founder at TalentOnLease, a recruitment platform, discusses the best approaches to mass firings.

Salary cuts can be a way

During the pandemic, we all witnessed a similar situation. Companies were either shutting down or firing their workforces en masse. However, there were innumerable firms that chose to tread the middle path—salary depreciation.

“In my opinion, the best way to deal with the situation would be to go for salary cuts as opposed to lay-offs,” Prakash says.

He suggests that firms should have a standardised, agreed-upon cut percentage that can be applied across the board for this to be effective. “This is definitely a more stable option for both the employee and the employer, despite the fact that it will be detrimental in the short term,” he comments.

In addition to pay reductions, an employer may significantly decrease perks or benefits periodically to give their business some time to improve its financial situation.

Another “pre-emptive” alternative to job cuts is to ensure that a company’s workforce includes a comprehensive blend of contingent workers and full-time employees. “As market conditions fluctuate, so does a business’s need for labour. Modern corporations must be able to adapt swiftly to rapidly shifting market conditions. Therefore, in order to maintain flexibility and competitiveness, businesses must determine the ideal mix of full-time employees and contingent labour in their workforces,” Prakash recommends.

What will be the hiring trends?

The majority of the hiring trends for the recruitment industry for the upcoming year will be largely influenced by technology, just like they were for the current year. According to Prakash, recruiters will continue to rely on virtual assistance in today’s rapidly changing and technologically advanced world.

“As much as it may seem like old hat, remote work is one of the hiring trends that will continue into the future. Offering employees the option to work from home or in a hybrid environment has become more common since the pandemic, and this trend is likely to continue,” he points out.

Employers who recognise this shift in the labour market and provide opportunities for their employees to work remotely or in a hybrid setting are more likely to attract top performers who may not be willing to work from the office. As a result, more and more employers will continue to offer their staff members options for virtual offices in place of the conventional 9–5 full-time office schedules, he adds.

When considering the future of employment, location shouldn’t be the main factor. Instead of debating the advantages and disadvantages of remote vs. in-office work, businesses should think about how to uphold teamwork and employee motivation, wherever they are.

In the years to come, HRM will unquestionably experience a significant change as more businesses adopt the hybrid work model. Although human resources departments have traditionally focused on full-time employees, contingent workers, freelancers, or gig economy workers and supply chain partners’ employees are becoming increasingly important to a company’s success.

We project that in 2023, HR will start managing the intricate ecosystem of temporary employees. As a result of the constant exposure to fear, danger and uncertainty, people are seeking connection and empathy as a way to deal with the current global crisis. Despite the fact that we are entering a challenging year, the HR trends for 2023 reflect our commitment to making things more human-centric. The best possible use of technology, employee satisfaction and security will all be given top priority. The rate at which businesses are implementing hybrid work models makes it necessary for human resources departments to set aside specific funds for making investments in state-of-the-art IT infrastructure.

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