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What Is A Layoff?
(April 02, 2001) Growth is an extremely difficult dynamic to manage. No one sees this reality more clearly than the seasoned recruiter. Companies that double, triple or quadruple their size over the course of a single year face enormous challenges. From simple maintenance of the cultural coherence of the organization to guiding the product development strategy, the leader of a high growth organization faces relatively uncharted territory.

The recent growth explosion in our industry has produced some anomalous thinking. Retention, the sales hype says, is a unilateral complement to recruiting programs. Careful readers will remember that we do not believe that retention is a panacea. Rather, some of the workforce needs retention attention. Some of almost any organization needs to be hurried out the door. The management of the overall value a company's workforce is more complex than simplistic sales propaganda.

No organization with more than 15 employees really wants to keep all of its workers.

Given the hopeless muck of conflicting values in the core of the HR discipline, the optimal management of the workforce as a tangible asset suffers from a combination of guilt and blurry thinking. Of course managers are charged with determining the relative value of this employee over that. Of course there is a "cut line". Of course some workers destroy more value than they create. Of course some investments are bad and some are good.

The sad truth about most managers is that they are human beings before they are managers. That means that they are subject to the same judgment errors and folly that the rest of us experience. Everyone would love to claim that their personnel system produces hiring decisions without error. Even the best aeronautical systems are only 99.999% reliable. We bet that hiring decisions are closer to baseball hitting averages.

So, how do you deal with the fact that the best organizations make huge volumes of hiring errors?

Well, it's a scary business. The commodification of human beings in a ranked order, while comforting to the analyst, belies the fact that even the lowest performer in an organization has some redeeming value. The difficult employee who destroys more value than she creates does so with the best of intentions. The office slouch also runs the coffee mess. The tyrant who slows contract completion through a mindless dedication to procedural certainty has a kid on your kid's softball team. And so on.

When the responsibility for managing the consequences of growth falls on your shoulders, life sucks. Each termination decision is a painful intersection of the conflicts between company loyalty and human compassion. But, in order to make the company viable, cutting and pruning is a critical component of long term viability. The difficulty of the decisions are part of the foundation for the relative differences in a manager's pay and status.

All in all, layoffs are a good and natural part of fast growth. Pruning makes trees bear fruit. The issue is so unnerving, however, that the tendency to address these growth issues turns into a public game of chicken. As a result, we see the sorts of broad industry layoffs we are now witnessing. The timing is bad, but the pruning is good.

- John Sumser © TwoColorHat. All Rights Reserved.

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