Growth Strategies

Layoffs: Who Stays, and Who Goes?

Assess what makes your company profitable, and who makes it happen.
3 min read
Opinions expressed by Entrepreneur contributors are their own.

Brian Woodell has been looking for a new job since November. He isn't having much luck. "For every ten inquiries I make, I may get one response and it's always a 'no,'" says Wooddell, 25, who lives in Fort Worth, Texas and just finished a master's degree in theology.

He's not encouraged by what's happening around him, either. His 26-year-old cousin was laid off from a Chicago accounting firm in March, not long after a 25-year-old friend got his walking papers from a Texas natural gas company.

"A $50,000 a year job [was] just taken away from him with no warning," says Wooddell of his friend. "It's scary."

So far, more than 2 million people under age 30 have lost their jobs in this recession, according to government statistics. Employers "are holding on to more of their older workers than ever before," says Andrew Sum, director of the Center for Labor Market Studies at Northeastern University in Boston. "The younger and less educated you are, the more [likely] you've been thrown out of this labor market."

Companies need their most competent, experienced hands on deck right now. But in retaining the experience they need to survive, companies risk losing some skills they'll need when business picks up. "That's a fine line to walk as an employer," says Bruce Tulgan, author of Not Everyone Gets a Trophy: How to Manage Generation Y.

Wallaroo Hat Company is a Boulder, Colo. firm that makes high-SPF headwear. Its seven employees are predominantly under age 30, and Wallaroo co-founder Stephanie Carter, 43, admires Generation Y's computer skills, scheduling flexibility and ability to learn quickly.

But if the $3 million company faces a layoff, workers with more experience will have the edge. "I would probably keep the skilled worker, even though they're more expensive," she says. "They're more capable of doing everything."

Companies will have to find a balance between short-term realities and long-term goals in their layoff decisions. "You have to be careful not to cut too much into your productive capacity in case the [opportunities] grow with any rebound in the economy," Tulgan says.

Woodell, meanwhile, sees his generation lowering its sights as lofty career expectations collide with cold, hard economic reality. "It's become a lot more of a 'I don't care what I get as long as I get something' kind of mentality,'" he says. "There's no more talk of the dream job."

If you're on the verge of layoffs and deciding who to cut:
Assess the work that needs to get done and the core competencies required to complete it successfully. Think about what makes your company profitable, and who makes it happen.

  • Look for downtime, waste and inefficiencies in your company. Where is it coming from, and how can it be minimized?
  • Evaluate every employee in your organization for skills, energy and track record to see who stands out.
  • Ponder which employees will be valuable as the economy picks up. The recession won't last forever.

Tips courtesy of Bruce Tulgan, author of Not Everyone Gets a Trophy: How to Manage Generation Y.


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