As Layoffs Seem Imminent, Here Are Tips for Employers & Employees
The economic fallout of the coronavirus crisis will likely include massive layoffs in India, across various sectors.
“Downsizing is going to happen, that is for sure, across levels and across sectors. I don’t think employers will have a choice. We really don’t know in what way or how badly the cookie will crumble, but the cookie will surely crumble. There is not major hiring that is going to be happening either.”Prabir Jha, human resources strategist
As the economic fallout of the coronavirus crisis worsens, economists across India and indeed the world are warning of a downturn, which will likely cause massive layoffs across sectors, and usher in higher rates of joblessness.
We spoke to Prabir Jha, one of India’s most respected names in the sphere of Human Resources (HR) strategy to understand the steps employers, employees and those who get laid off, can take as this crisis unfolds.
Jha, a former civil servant, headed HR operations at companies like Tata Motors, Reliance and Cipla before founding his own consultancy, the Prabir Jha People Advisory.
The following are excerpts from the conversation.
What Should Employers Do?
Do you expect to see downsizing to occur across sectors? And what are the things that employers should keep in mind, or the steps they should take, before deciding to go ahead with major layoffs?
Prabir Jha: Some kind of downsizing is going to happen, that is for sure. It will happen across levels and across sectors. There will be a reduction in manpower. I don’t think employers will have a choice.
Let’s look at smaller enterprises, small promoter-driven companies, those that have between five to a hundred employees. If these companies are not able to survive the downturn, then what choice do they have? They will have to lay off people.
Many of these companies are going to go belly-up. I believe MSMEs (micro, small and medium enterprises) are going to be worst hit.
Even in the bigger companies, some downsizing will likely happen. My hope is that before conducting layoffs, employers will first start by taking prudent and fair calls about the following things –
- reviewing salaries
- reviewing perks and privileges
- knocking off bonuses
- knocking off increments
Because I advise companies as well, there are people (employers) I’ve been speaking to, some of whom are saying, “You know, my senior team is saying that they must get at least 10-15% of a hike.” I mean, which world are they living in?
If you have a job right now, count yourself lucky. People have to realise that if you have a job, along with some medical cover and basic assurances and insurances, you are fine. What is happening is a global problem, and we have to fasten our seat belts.
I hope employers will try to do that – starting at the senior levels, you take more of a hit.
Before downsizing, I reckon there will be some other financial measures – it’ll vary by industry, and from company to company, but it could be very clearly no bonuses or part bonuses, no increments or little increments, and possibly even a shaving of current compensations. Base salary will typically not be touched, but other allowances could be dramatically hit.
While some companies are saying that they will not lay off anyone over the next three months or six months or even one year, even in such companies, there will likely be (job) losses after these periods end.
After this crisis, employers will hopefully return to the workplace with higher degrees of empathy and sensitivity. The least you owe to your people is to connect with them, listen to them, understand them. Allow them to vent.
Typically, leaders say, “Oh, he’s a difficult employee. He’s a cribber.” But they have to understand that each employee will carry a certain emotional baggage and economic worry home, each one.
Companies will need to upgrade their ability to lead and inspire, and it starts with listening and connecting to employees as human beings who are more than their roles and titles. At a time when they can’t be giving rewards or promotions, you will have to connect with the employees more.
Tips for employers as they seek to tide over this crisis:
- Show greater empathy and understanding
- Prefer cuts in salaries/bonuses/perks to job losses
- Balance near-term business challenges with the culture and employer brand you seek to be. Remember, better times will return and you will be judged by how fair you were now.
What Should Employees Do?
Let’s now talk about the employees’ perspective. What should employees keep in mind right now, as the adverse economic impact of the coronavirus crisis intensifies?
Prabir Jha: As employees, do not have misplaced expectations. Be grounded in reality. This is not the time to look for double-digit increments. Understand that there are constraints that your companies and your management also has.
Tips for employees in this difficult period:
- Recognize the realities of the times and don’t expect increments or bonuses. Be grateful if your job is safe.
- Build greater impact at what you do. Stretch and create more value to never be on the “culling list.”
- Build yourself up. Acquire newer skill sets. Develop better soft skills that can help you for higher roles.
What Should Employees Who Get Laid off Do?
Regardless of the measures listed above, layoffs across sectors appear imminent, something that you have said as well. What is your advice for those employees who do end up losing their jobs? What should they be focusing on?
Prabir Jha: The first thing you have to do is prepare yourself mentally and emotionally.
- Don’t get into the victim syndrome, it doesn’t help you: The biggest struggle with a layoff at any time is to get into the victim syndrome. Recognise reality, and look at it absolutely staunchly. If you get into the victim syndrome, it doesn’t help you either to get better for another job. If your body language, your heart, and mind are drooping, then you won’t get another job even if there was to be one.
- Prepare yourself for a longer haul: Don’t fool yourself that tomorrow morning, you will immediately get a job. Headhunters, consultants, and companies will be receiving a deluge of resumes.
- Take care of your psychological well-being, and review your expenses prudently: Tell yourself that in this period, you have to look after your psychological safety, and prepare yourself for some economic thud. The challenge with a lot of younger people especially is that they are living in a state of indebtedness, with EMIs and stuff. That’s going to hit them very hard. So, look at your expenses very prudently.
- Try acquiring alternate skills: See if you can acquire alternate skills, hard skills or soft skills, in this period. Use this time for acquiring qualifications.
- Explore self-employment and part-time employment opportunities: Try and explore things. A lot of individuals become prisoners of their past education. But you need to look at keeping yourself gainfully busy in this period, even if it’s part-time jobs or self-employment opportunities.
- Keep trying the market: Lastly, you should keep trying the market, even if there aren’t companies showering petals right now.
What Can the Government Do?
What are the steps that the government can take to counter these concerns that employees and employers have?
Prabir Jha: The government can counter the concerns of the large-scale unorganised sector, because politically and socially, that is important.
The biggest challenge will be to the unorganised sector. So many sectors, from textiles to infrastructure, real estate to retail, work largely on what we call contingent workforce or third-party workforce. That’s a huge part of the ecosystem, and that will be the first to get a bloody blow.
The recession is not likely to give them alternate employment because their skill sets are very limited. I think it’s very important for us to recognise that. This will have its own impact on the economy, livelihoods, families dependent on them. It includes migrant workforce, but it’s not restricted to just migrant workers.
Through schemes like MGNREGA and the like, the unorganised sector is where the government’s focus will be.
The government might also incentivise industries to recover faster, to provide a stimulus for businesses to get back on track. For organised sector employees, the government along with the RBI may provide some fiscal relief, some moratoriums, and reduced rates. Beyond some tax relief and changes in loan repayment or easier loans, I wouldn’t expect much more for employees directly.
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