About Wellness Corporate Solutions

Tuesday, March 31, 2009

The Downside of Downsizing

A Fortune magazine editor-at-large has some interesting things to say about the costs of layoffs. The savings are easy to quantify, but the side-effects can be far more difficult to pin down. We've blogged before about the effect layoffs have on those who remain.

The Fortune article names five potential costs:
  1. Brand equity costs: the damage a layoff may do to your company's reputation
  2. Leadership costs: the loss of potential talent
  3. Morale costs: the emotional drain on those who are left behind
  4. Wall Street costs: the effect layoffs can have on stock price
  5. Rehiring costs: the difficulty of hiring and training new employees when the economy improves
As wellness professionals, we are especially focused on the third category. The article mentions a mid-90s study that showed up to a ninefold increase in medical claims among employees who survived layoffs. Not surprisingly, these claims were often for mental health issues, substance abuse, and cardiovascular problems.

We're not naive: in this economy, layoffs are unavoidable for many companies. But why not try to mitigate the costs? Consider ramping up your health and wellness offerings to those who remain. When the economy recovers, you'll have a happier and healthier workforce than those who were more shortsighted.

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