Three out of Five Employers Say Layoffs Likely in 2009

Dec 16, 2008
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Three out of Five Employers Say Layoffs Likely in 2009

SHRM poll shows need for bottom-line people strategies

Alexandria, Va. – The Society for Human Resource Management (SHRM) today released a new poll that shows 48 percent of organizations laid-off employees in 2008. Even worse, 60 percent of surveyed organizations said they expect to lay off employees in the next 12 months.

The latest survey, “Layoffs in light of 2008 challenges to the U.S. economy,” is the third in a series being conducted by SHRM to help identify the people management challenges facing businesses and HR professionals in a down economy.

“Our country is now facing its most serious financial crisis since the Great Depression. The weak economy and chaotic financial markets worldwide are hitting businesses hard and forcing them to make tough people decisions," said SHRM President and CEO Laurence O'Neil. “With the US economy in a recession, HR professionals are uniquely qualified to lead the bottom-line people strategies that businesses need in order to survive and prosper in today's difficult economy."

According to the survey, more than half (53 percent) of the layoffs in the next 12 months will occur at various levels. Executives (1 percent) are the least likely to be laid off, followed by sales positions (3 percent), then middle management (6 percent). Most of the expected coming layoffs will involve technical/ professional positions (13 percent), unskilled labor positions (13 percent), and administrative positions (11 percent).

The good news: most laid-off employees do not leave without some type of help from their employers. Surveyed organizations offered a wide-range of benefits, from severance pay (74 percent) to career counseling (28 percent) and use of office space during a job search (8 percent).

SHRM also looked at how employers are delivering the bad news to both those being laid off and to those remaining with their organizations. During the last 12 months, most laid off employees found out via one-on-one meetings with their HR department and direct supervisor (59 percent). The second most popular way was in meetings with just the employees’ manager or supervisor (30 percent).

For those employees who did not lose their job, most heard about the layoffs via a group meeting (64 percent), company e-mail (22 percent), or informally (21 percent).

Additional key survey findings include:

• The top five ways organizations cut staffing costs were attrition (72 percent); hiring freezes (48 percent); not renewing contracts with existing contract and temporary employees (21 percent); encouraging employees to use vacation time (18 percent); and reducing employee work hours (17 percent).

• Attrition and not renewing contracts with existing contract and temporary employees were more popular with large organizations and publicly owned companies.

• HR professionals stated the five major factors negatively impacting the financial stability of their organizations in the last six months were: decreased demand for products and services (64 percent); volatility in the world financial markets (38 percent); health care costs (34 percent); fluctuations in the value of the U.S. dollar (28 percent); and organizational restructuring (24 percent).

• In layoffs over the last 12 months, terminations were effective immediately almost half of the time (49 percent). The second most common notice period was two weeks (17 percent) followed by one month (15 percent) and two months (13 percent)

• Compared to six months ago, HR professionals are spending more time on: budget issues (55 percent); working with employees to calm fears about job security (52 percent); and calming fears regarding retirement fund value (50 percent).

• Also 43 percent of HR professionals report spending more time managing organization-wide communications than they did six months ago. In addition, 37 percent of HR professionals are increasingly using their skills to create and recommend layoff alternatives while 35 percent report assisting management with layoff decisions.

For more information on SHRM Surveys, please visit: http://www.shrm.org/surveys

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About the Society for Human Resource Management

The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. Representing more than 250,000 members in over 140 countries, the Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China and India. Visit SHRM Online at www.shrm.org.

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