Where is the bailout package for employees?

Governments have rushed into saving complacent and greedy Investment Banks and Housing Giants who were trying to make merry on wide spreads on sub-prime credits. However, nowhere have we seen measures being taken to save employees being sacked from these as well as other directly or indirectly affected organisations. Targets are usually the newest employees on board who had no or the littlemost role to play in there failures. Is it not the job of the government to protect them by ways of passing extraordinary legislations which shall make these organisations pay dearly before sacking them?

Make Severance Pay Tax free!

We are already seeing lay-offs in India which is quite a new phenomenon for India Shining and there shall be many more in next months if economic downturn or the US recession continues to plague us. All these lay-offs come with severance money to employees facing lay-off, which range from 15 days to 3 months. I think severance money should not be treated the same way as notice pay which is paid to employee when fired for non-performance. Severance is paid when organisation has decided to lay-off people when it decides to take actions which were not foreseen earlier and people being laid-off may not be responsible for it. Hence, government should immediately intervene and bring in standards for deciding severance whereby employees in probation should also be entitled to an equal or higher severance pay than permanent employees as they are less likely to find jobs given their inexperience.

Also, the govt should introduce tax incentives to people facing lay-off as last thing, not only on their severance money but also maybe a tax credit/refund for tax paid in earlier years because in current scenario when everyone if firing/laying-off, majority of these people are less likely to land a job anytime soon and people would definitely like to see a portion of their money coming back which hey paid to government in their good times.

To sum-up, people being laid-off need the help of the govt as the employers are mostly going to be ruthless in paying severance and govt has made good hay in past few years from these employees and it is its time to pay back.

Industry v/s Consultants on Abating Recession Onslaught!

I read TOI (Times of India) everyday -(its not a promotion statement, its not my personality either; my wife thinks she'd not know about the best sales in town otherwise).

Recession is finding its roots into every newspaper almost everyday. And today came THE BIG announcement, and also a NOT SO BIG advise. Here they are and lets see what can we infer from it.

Here's the first - Citi to slash 52,000 jobs (link is from ET, though)

and, the second - When others fire, you hire, says Robert Miller (again from ET)

The article says it all where it says “If the past is any guide, Wall Street overshoots in terms of hiring, and then overshoots when it’s time to cut jobs,” said Walter Todd, portfolio manager at Greenwood Capital Associates, which invests $1 billion. “It’s a moving target.”

This is how I see it. On one hand by absorbing excess people than it needed, organisations like Citi create more employment while on the other hand - at receiving flak from investors and Board, CEOs sack a %age of employees to show they are doing something. I think balance lies somewhere in between. Not all organisations do this with similar vigour. This is where character or persona of organisations emerges. A good portion of employees hired would have been working with some other organisations before the same and might have been safer there. They join such organisations for career progression along with a commitment to add value to the system which is what is the usual contract. However, by taking measures such as "%age lay-off" organisations only display their inability to cope with environment and an inherent lack of preparedness for rough weathers. This erodes confidence of others too -i.e. the unretrenched people, the people looking forward to joining such places and even customers who start wondering about integrity and sustainablity of such organisations.

Add to this the logics extended by Robert Miller in the second article above, organisations stand to loose much more than they portray to be gaining. In fact, it is during these timmes that organisations need to be innovative and proactive and start looking at the Basic problem that plagues them and how they can best utilise resources. There are other costs that can be reduced like travel, Townhalls etc - people understand, and linking rewards to incentives in a more efficient manner. And those who do not understand, leave -partly accomplishing the target of having excess manpower. And if you thought these were your best people, then you need to reread the Rules of Business and Human Behaviour as it has been proved since time immemorial that those who stand by you in the hour of need prove to be your best friends.