One More Look at Layoffs During the Great Recession

Here's a brief update on some research that have been done on layoff practices.

For a decade it has been tracked who was likely to be fired in Europe during an economic downturn. Surprisingly, it was not generally the least productive managers. Over 40% of European managers said they would layoff an older manager even if that manager was a high performer. Twenty eight percent said they would fire younger workers even if they were cheaper or better performers than others. Less than a third of the Europeans surveyed since 1999 said they would fire the employee being called the "weak link," the older, expensive, average performer.

But the Great Recession seems to have changed Europe's attitudes to layoffs. Over the summer of 2009, it has been asked to 700 international managers the same set of questions. This time, nearly half of respondents targeted the weak link, the older, expensive, average performer. Second, 42% said they would choose to fire a younger manager, even if he was cheaper or better. The older, more expensive but high-performing managers were targeted for layoff the least, by only 10% of the responding executives.

Notably, younger managers were always more likely to fire older managers. But respondents over age thirty-five were about twice as likely as younger managers to fire a young, good, and cheap employee. The overall message seems to be: Work well, don't cost too much, and avoid middle age.

A close look has been taken at layoff practices across cultures. In the previous research, it has been found managers in Anglo-Saxon cultures typically fired the weak links, the least productive, mid-career stage managers. Germanic countries overwhelmingly laid off the youngest managers even if they were cheaper or better performers. Latin countries preferred to fire older managers, even if they were excellent.

In this most recent round of research, though, things have changed. Average performers are being targeted more across all cultures. The top two targets for layoff this time around were the older, expensive, average performer and the younger average performer.

Drilling down, the Dutch, Indians, and Germans are the most likely to target the average performers. The Italians, French, Austrians, and Polish were less likely to fire the so-called weak links. Americans, previously noted for ruthlessness in firing weak performers, now fall in the middle.

When it came to laying off high performers, though, cultures diverged. The younger excellent manager was the more common target in Germany, the U.S., Poland, and France. The older excellent manager was the more common target in Italy and India. If you're young and/or good, head for Holland or Italy.

Comparing these results to the previous results, the Great Recession seems to have focused businesses' firing practices more on performance, and less on age and cost. Lless divergence was seen in layoff attitudes and more agreement (though not total agreement) that weak links — highly paid average performers, especially older ones — should be the first to be laid off. More managers were willing to retain high-priced employees if those employees were high performers.
(Source: Harvard Business Review)
(Image source: Startupmeme.com)