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Why do companies fire and hire in parallel? [closed]
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I've seen a couple of cases where companies lay off entire divisions because of corporate restructuring, legacy (or older) technology, etc. But at the same time they hire outsiders.
Instead of hiring a new person, why don't they train an existing employee who was actually asked to go?
recruitment layoff termination
edited Jun 26 '14 at 9:30
Jan Doggen
11.5k145066
asked Jun 26 '14 at 6:08
sandeep
1111
closed as too broad by Vietnhi Phuvan, gnat, jcmeloni, DJClayworth, Kate Gregory Jun 26 '14 at 15:34
Please edit the question to limit it to a specific problem with enough detail to identify an adequate answer. Avoid asking multiple distinct questions at once. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.
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I've seen a couple of cases where companies lay off entire divisions because of corporate restructuring, legacy (or older) technology, etc. But at the same time they hire outsiders.
Instead of hiring a new person, why don't they train an existing employee who was actually asked to go?
recruitment layoff termination
edited Jun 26 '14 at 9:30
Jan Doggen
11.5k145066
asked Jun 26 '14 at 6:08
sandeep
1111
closed as too broad by Vietnhi Phuvan, gnat, jcmeloni, DJClayworth, Kate Gregory Jun 26 '14 at 15:34
Please edit the question to limit it to a specific problem with enough detail to identify an adequate answer. Avoid asking multiple distinct questions at once. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.
2
Voting to close because the question is too broad.
– Vietnhi Phuvan
Jun 26 '14 at 6:24
add a comment |Â
up vote
0
down vote
favorite
up vote
0
down vote
favorite
I've seen a couple of cases where companies lay off entire divisions because of corporate restructuring, legacy (or older) technology, etc. But at the same time they hire outsiders.
Instead of hiring a new person, why don't they train an existing employee who was actually asked to go?
recruitment layoff termination
edited Jun 26 '14 at 9:30
Jan Doggen
11.5k145066
asked Jun 26 '14 at 6:08
sandeep
1111
I've seen a couple of cases where companies lay off entire divisions because of corporate restructuring, legacy (or older) technology, etc. But at the same time they hire outsiders.
Instead of hiring a new person, why don't they train an existing employee who was actually asked to go?
recruitment layoff termination
edited Jun 26 '14 at 9:30
Jan Doggen
11.5k145066
asked Jun 26 '14 at 6:08
sandeep
1111
edited Jun 26 '14 at 9:30
Jan Doggen
11.5k145066
edited Jun 26 '14 at 9:30
Jan Doggen
11.5k145066
edited Jun 26 '14 at 9:30
Jan Doggen
11.5k145066
11.5k145066
asked Jun 26 '14 at 6:08
sandeep
1111
asked Jun 26 '14 at 6:08
sandeep
1111
asked Jun 26 '14 at 6:08
sandeep
1111
1111
closed as too broad by Vietnhi Phuvan, gnat, jcmeloni, DJClayworth, Kate Gregory Jun 26 '14 at 15:34
Please edit the question to limit it to a specific problem with enough detail to identify an adequate answer. Avoid asking multiple distinct questions at once. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.
closed as too broad by Vietnhi Phuvan, gnat, jcmeloni, DJClayworth, Kate Gregory Jun 26 '14 at 15:34
Please edit the question to limit it to a specific problem with enough detail to identify an adequate answer. Avoid asking multiple distinct questions at once. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.
2
Voting to close because the question is too broad.
– Vietnhi Phuvan
Jun 26 '14 at 6:24
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2
Voting to close because the question is too broad.
– Vietnhi Phuvan
Jun 26 '14 at 6:24
2
2
Voting to close because the question is too broad.
– Vietnhi Phuvan
Jun 26 '14 at 6:24
Voting to close because the question is too broad.
– Vietnhi Phuvan
Jun 26 '14 at 6:24
add a comment |Â
3 Answers
3
active
oldest
votes
up vote
4
down vote
Sometimes they do. It entirely depends. And some companies develop a bad reputation if they do it often enough. A great recruiting channel for a former job of mine, was to recruit people from a company that habitually laid off and rehired workers as the work changed. We got a lot of great people by waiting for the other company's layoff season and then recruiting them with very little pay increase, but the awareness that the only time we laid people off was during serious economic downscaling.
OTOH - firing while hiring is often done for very valid purposes.
A decent company will make a retrain/don't retrain decision based on fairly large numbers. A big company won't really care much about an individual so the case for "there's this one guy who would benefit" isn't a very valid reason for changing course. The overall focus will be:
What's the cost of retraining existing staff to do new jobs vs. training new staff with job skill for the business?
If you're talking about people with high school degrees who need to learn jobs that require a PhD, this is fairly irrational - the cost (hundreds of thousands of dollars of education and years of school), is prohibitive vs. the cost of hiring PhDs.
If you're talking about changing a software engineering business from one type of software to another, then there are many more options. However, I can tell you that even in a field that is largely similar, depth of expertise in a particular type of software vs. another type of software (OS development/Web development, for example) can be a prohibitively expensive transfer. Note that cost is not just salary/benefit cost (or other per employee costs), it's also the cost of lost opportunity in time to market. If I need to get the new product out in the next 6 months to lead the market, I can't wait for 1.5 years for developers in my current company to make the knowledge transfer. It's not a matter of salary, but of lost profit from a product that wasn't competitive when it was released.
How likely are people to accept this offer?
Doing the same job in the same location is one thing. If you told everyone that the new business was going to be in a country half a globe away, in a country with a language that no one in the current company can speak... you may not get many takers. That said, in some cases the cost of paying unemployment vs. making the offer of the job, and the demand of "move or quit" may actually be the more fiscally viable option. That said, the kinder option may be to lay people off, so they can get layoff packages.
We could debate why a company would move jobs to foreign countries - but I think a debate of trade protection and outsourcing work is probably beyond the scope of this question. The end deal is - money - and asking companies to pay 20% more to keep domestic workers employed runs counter enough to valid self-interest that it's a hard debate.
answered Jun 26 '14 at 15:16
bethlakshmi
70.3k4136277
add a comment |Â
up vote
0
down vote
Depending on the change, I'd imagine there is the question of how long would the transition be to get the old staff up to speed on the new technology to be able to finish the project. If the training would take 6 months or more, that may not be an acceptable amount of time to wait to get a project started in contrast to hiring outside experts that may be able to be productive quicker.
answered Jun 26 '14 at 6:23
JB King
15.1k22957
Hmm. Sounds rite
– sandeep
Jun 26 '14 at 6:24
add a comment |Â
up vote
0
down vote
One reason is that hiring outsiders has less long-term financial obligations. Depending on the jurisdiction of the country you're in, you can't just hire/fire employees as conveniently as hiring outsiders. For employees you may have to provide additional benefits (like pensions, workspace, means of transportation), whereas for someone you hire you just let them handle that themselves.
This trend has been going on for years
answered Jun 26 '14 at 8:10
Jan Doggen
11.5k145066
1
I think the OP meant they are making people redundant and hiring new people without allowing the redundant employees access to those job.
– Pepone
Jun 26 '14 at 9:56
Also newly hired staff might have less generous benefits.
– P.M
Jun 26 '14 at 13:04
@Pepone That's exactly the situation I'm answering
– Jan Doggen
Jun 26 '14 at 13:26
1
This question doesn't mean 'outsiders' in the sense of contractors (or foreigners, whichever you meant) it means 'hiring people from outside the company instead of keeping an existing employee and retraining'.
– DJClayworth
Jun 26 '14 at 13:35
add a comment |Â
3 Answers
3
active
oldest
votes
3 Answers
3
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
4
down vote
Sometimes they do. It entirely depends. And some companies develop a bad reputation if they do it often enough. A great recruiting channel for a former job of mine, was to recruit people from a company that habitually laid off and rehired workers as the work changed. We got a lot of great people by waiting for the other company's layoff season and then recruiting them with very little pay increase, but the awareness that the only time we laid people off was during serious economic downscaling.
OTOH - firing while hiring is often done for very valid purposes.
A decent company will make a retrain/don't retrain decision based on fairly large numbers. A big company won't really care much about an individual so the case for "there's this one guy who would benefit" isn't a very valid reason for changing course. The overall focus will be:
What's the cost of retraining existing staff to do new jobs vs. training new staff with job skill for the business?
If you're talking about people with high school degrees who need to learn jobs that require a PhD, this is fairly irrational - the cost (hundreds of thousands of dollars of education and years of school), is prohibitive vs. the cost of hiring PhDs.
If you're talking about changing a software engineering business from one type of software to another, then there are many more options. However, I can tell you that even in a field that is largely similar, depth of expertise in a particular type of software vs. another type of software (OS development/Web development, for example) can be a prohibitively expensive transfer. Note that cost is not just salary/benefit cost (or other per employee costs), it's also the cost of lost opportunity in time to market. If I need to get the new product out in the next 6 months to lead the market, I can't wait for 1.5 years for developers in my current company to make the knowledge transfer. It's not a matter of salary, but of lost profit from a product that wasn't competitive when it was released.
How likely are people to accept this offer?
Doing the same job in the same location is one thing. If you told everyone that the new business was going to be in a country half a globe away, in a country with a language that no one in the current company can speak... you may not get many takers. That said, in some cases the cost of paying unemployment vs. making the offer of the job, and the demand of "move or quit" may actually be the more fiscally viable option. That said, the kinder option may be to lay people off, so they can get layoff packages.
We could debate why a company would move jobs to foreign countries - but I think a debate of trade protection and outsourcing work is probably beyond the scope of this question. The end deal is - money - and asking companies to pay 20% more to keep domestic workers employed runs counter enough to valid self-interest that it's a hard debate.
answered Jun 26 '14 at 15:16
bethlakshmi
70.3k4136277
add a comment |Â
up vote
4
down vote
Sometimes they do. It entirely depends. And some companies develop a bad reputation if they do it often enough. A great recruiting channel for a former job of mine, was to recruit people from a company that habitually laid off and rehired workers as the work changed. We got a lot of great people by waiting for the other company's layoff season and then recruiting them with very little pay increase, but the awareness that the only time we laid people off was during serious economic downscaling.
OTOH - firing while hiring is often done for very valid purposes.
A decent company will make a retrain/don't retrain decision based on fairly large numbers. A big company won't really care much about an individual so the case for "there's this one guy who would benefit" isn't a very valid reason for changing course. The overall focus will be:
What's the cost of retraining existing staff to do new jobs vs. training new staff with job skill for the business?
If you're talking about people with high school degrees who need to learn jobs that require a PhD, this is fairly irrational - the cost (hundreds of thousands of dollars of education and years of school), is prohibitive vs. the cost of hiring PhDs.
If you're talking about changing a software engineering business from one type of software to another, then there are many more options. However, I can tell you that even in a field that is largely similar, depth of expertise in a particular type of software vs. another type of software (OS development/Web development, for example) can be a prohibitively expensive transfer. Note that cost is not just salary/benefit cost (or other per employee costs), it's also the cost of lost opportunity in time to market. If I need to get the new product out in the next 6 months to lead the market, I can't wait for 1.5 years for developers in my current company to make the knowledge transfer. It's not a matter of salary, but of lost profit from a product that wasn't competitive when it was released.
How likely are people to accept this offer?
Doing the same job in the same location is one thing. If you told everyone that the new business was going to be in a country half a globe away, in a country with a language that no one in the current company can speak... you may not get many takers. That said, in some cases the cost of paying unemployment vs. making the offer of the job, and the demand of "move or quit" may actually be the more fiscally viable option. That said, the kinder option may be to lay people off, so they can get layoff packages.
We could debate why a company would move jobs to foreign countries - but I think a debate of trade protection and outsourcing work is probably beyond the scope of this question. The end deal is - money - and asking companies to pay 20% more to keep domestic workers employed runs counter enough to valid self-interest that it's a hard debate.
answered Jun 26 '14 at 15:16
bethlakshmi
70.3k4136277
add a comment |Â
up vote
4
down vote
up vote
4
down vote
Sometimes they do. It entirely depends. And some companies develop a bad reputation if they do it often enough. A great recruiting channel for a former job of mine, was to recruit people from a company that habitually laid off and rehired workers as the work changed. We got a lot of great people by waiting for the other company's layoff season and then recruiting them with very little pay increase, but the awareness that the only time we laid people off was during serious economic downscaling.
OTOH - firing while hiring is often done for very valid purposes.
A decent company will make a retrain/don't retrain decision based on fairly large numbers. A big company won't really care much about an individual so the case for "there's this one guy who would benefit" isn't a very valid reason for changing course. The overall focus will be:
What's the cost of retraining existing staff to do new jobs vs. training new staff with job skill for the business?
If you're talking about people with high school degrees who need to learn jobs that require a PhD, this is fairly irrational - the cost (hundreds of thousands of dollars of education and years of school), is prohibitive vs. the cost of hiring PhDs.
If you're talking about changing a software engineering business from one type of software to another, then there are many more options. However, I can tell you that even in a field that is largely similar, depth of expertise in a particular type of software vs. another type of software (OS development/Web development, for example) can be a prohibitively expensive transfer. Note that cost is not just salary/benefit cost (or other per employee costs), it's also the cost of lost opportunity in time to market. If I need to get the new product out in the next 6 months to lead the market, I can't wait for 1.5 years for developers in my current company to make the knowledge transfer. It's not a matter of salary, but of lost profit from a product that wasn't competitive when it was released.
How likely are people to accept this offer?
Doing the same job in the same location is one thing. If you told everyone that the new business was going to be in a country half a globe away, in a country with a language that no one in the current company can speak... you may not get many takers. That said, in some cases the cost of paying unemployment vs. making the offer of the job, and the demand of "move or quit" may actually be the more fiscally viable option. That said, the kinder option may be to lay people off, so they can get layoff packages.
We could debate why a company would move jobs to foreign countries - but I think a debate of trade protection and outsourcing work is probably beyond the scope of this question. The end deal is - money - and asking companies to pay 20% more to keep domestic workers employed runs counter enough to valid self-interest that it's a hard debate.
answered Jun 26 '14 at 15:16
bethlakshmi
70.3k4136277
Sometimes they do. It entirely depends. And some companies develop a bad reputation if they do it often enough. A great recruiting channel for a former job of mine, was to recruit people from a company that habitually laid off and rehired workers as the work changed. We got a lot of great people by waiting for the other company's layoff season and then recruiting them with very little pay increase, but the awareness that the only time we laid people off was during serious economic downscaling.
OTOH - firing while hiring is often done for very valid purposes.
A decent company will make a retrain/don't retrain decision based on fairly large numbers. A big company won't really care much about an individual so the case for "there's this one guy who would benefit" isn't a very valid reason for changing course. The overall focus will be:
What's the cost of retraining existing staff to do new jobs vs. training new staff with job skill for the business?
If you're talking about people with high school degrees who need to learn jobs that require a PhD, this is fairly irrational - the cost (hundreds of thousands of dollars of education and years of school), is prohibitive vs. the cost of hiring PhDs.
If you're talking about changing a software engineering business from one type of software to another, then there are many more options. However, I can tell you that even in a field that is largely similar, depth of expertise in a particular type of software vs. another type of software (OS development/Web development, for example) can be a prohibitively expensive transfer. Note that cost is not just salary/benefit cost (or other per employee costs), it's also the cost of lost opportunity in time to market. If I need to get the new product out in the next 6 months to lead the market, I can't wait for 1.5 years for developers in my current company to make the knowledge transfer. It's not a matter of salary, but of lost profit from a product that wasn't competitive when it was released.
How likely are people to accept this offer?
Doing the same job in the same location is one thing. If you told everyone that the new business was going to be in a country half a globe away, in a country with a language that no one in the current company can speak... you may not get many takers. That said, in some cases the cost of paying unemployment vs. making the offer of the job, and the demand of "move or quit" may actually be the more fiscally viable option. That said, the kinder option may be to lay people off, so they can get layoff packages.
We could debate why a company would move jobs to foreign countries - but I think a debate of trade protection and outsourcing work is probably beyond the scope of this question. The end deal is - money - and asking companies to pay 20% more to keep domestic workers employed runs counter enough to valid self-interest that it's a hard debate.
answered Jun 26 '14 at 15:16
bethlakshmi
70.3k4136277
answered Jun 26 '14 at 15:16
bethlakshmi
70.3k4136277
answered Jun 26 '14 at 15:16
bethlakshmi
70.3k4136277
answered Jun 26 '14 at 15:16
bethlakshmi
70.3k4136277
70.3k4136277
add a comment |Â
add a comment |Â
up vote
0
down vote
Depending on the change, I'd imagine there is the question of how long would the transition be to get the old staff up to speed on the new technology to be able to finish the project. If the training would take 6 months or more, that may not be an acceptable amount of time to wait to get a project started in contrast to hiring outside experts that may be able to be productive quicker.
answered Jun 26 '14 at 6:23
JB King
15.1k22957
Hmm. Sounds rite
– sandeep
Jun 26 '14 at 6:24
add a comment |Â
up vote
0
down vote
Depending on the change, I'd imagine there is the question of how long would the transition be to get the old staff up to speed on the new technology to be able to finish the project. If the training would take 6 months or more, that may not be an acceptable amount of time to wait to get a project started in contrast to hiring outside experts that may be able to be productive quicker.
answered Jun 26 '14 at 6:23
JB King
15.1k22957
Hmm. Sounds rite
– sandeep
Jun 26 '14 at 6:24
add a comment |Â
up vote
0
down vote
up vote
0
down vote
Depending on the change, I'd imagine there is the question of how long would the transition be to get the old staff up to speed on the new technology to be able to finish the project. If the training would take 6 months or more, that may not be an acceptable amount of time to wait to get a project started in contrast to hiring outside experts that may be able to be productive quicker.
answered Jun 26 '14 at 6:23
JB King
15.1k22957
Depending on the change, I'd imagine there is the question of how long would the transition be to get the old staff up to speed on the new technology to be able to finish the project. If the training would take 6 months or more, that may not be an acceptable amount of time to wait to get a project started in contrast to hiring outside experts that may be able to be productive quicker.
answered Jun 26 '14 at 6:23
JB King
15.1k22957
answered Jun 26 '14 at 6:23
JB King
15.1k22957
answered Jun 26 '14 at 6:23
JB King
15.1k22957
answered Jun 26 '14 at 6:23
JB King
15.1k22957
15.1k22957
Hmm. Sounds rite
– sandeep
Jun 26 '14 at 6:24
add a comment |Â
Hmm. Sounds rite
– sandeep
Jun 26 '14 at 6:24
Hmm. Sounds rite
– sandeep
Jun 26 '14 at 6:24
Hmm. Sounds rite
– sandeep
Jun 26 '14 at 6:24
add a comment |Â
up vote
0
down vote
One reason is that hiring outsiders has less long-term financial obligations. Depending on the jurisdiction of the country you're in, you can't just hire/fire employees as conveniently as hiring outsiders. For employees you may have to provide additional benefits (like pensions, workspace, means of transportation), whereas for someone you hire you just let them handle that themselves.
This trend has been going on for years
answered Jun 26 '14 at 8:10
Jan Doggen
11.5k145066
1
I think the OP meant they are making people redundant and hiring new people without allowing the redundant employees access to those job.
– Pepone
Jun 26 '14 at 9:56
Also newly hired staff might have less generous benefits.
– P.M
Jun 26 '14 at 13:04
@Pepone That's exactly the situation I'm answering
– Jan Doggen
Jun 26 '14 at 13:26
1
This question doesn't mean 'outsiders' in the sense of contractors (or foreigners, whichever you meant) it means 'hiring people from outside the company instead of keeping an existing employee and retraining'.
– DJClayworth
Jun 26 '14 at 13:35
add a comment |Â
up vote
0
down vote
One reason is that hiring outsiders has less long-term financial obligations. Depending on the jurisdiction of the country you're in, you can't just hire/fire employees as conveniently as hiring outsiders. For employees you may have to provide additional benefits (like pensions, workspace, means of transportation), whereas for someone you hire you just let them handle that themselves.
This trend has been going on for years
answered Jun 26 '14 at 8:10
Jan Doggen
11.5k145066
1
I think the OP meant they are making people redundant and hiring new people without allowing the redundant employees access to those job.
– Pepone
Jun 26 '14 at 9:56
Also newly hired staff might have less generous benefits.
– P.M
Jun 26 '14 at 13:04
@Pepone That's exactly the situation I'm answering
– Jan Doggen
Jun 26 '14 at 13:26
1
This question doesn't mean 'outsiders' in the sense of contractors (or foreigners, whichever you meant) it means 'hiring people from outside the company instead of keeping an existing employee and retraining'.
– DJClayworth
Jun 26 '14 at 13:35
add a comment |Â
up vote
0
down vote
up vote
0
down vote
One reason is that hiring outsiders has less long-term financial obligations. Depending on the jurisdiction of the country you're in, you can't just hire/fire employees as conveniently as hiring outsiders. For employees you may have to provide additional benefits (like pensions, workspace, means of transportation), whereas for someone you hire you just let them handle that themselves.
This trend has been going on for years
answered Jun 26 '14 at 8:10
Jan Doggen
11.5k145066
One reason is that hiring outsiders has less long-term financial obligations. Depending on the jurisdiction of the country you're in, you can't just hire/fire employees as conveniently as hiring outsiders. For employees you may have to provide additional benefits (like pensions, workspace, means of transportation), whereas for someone you hire you just let them handle that themselves.
This trend has been going on for years
answered Jun 26 '14 at 8:10
Jan Doggen
11.5k145066
answered Jun 26 '14 at 8:10
Jan Doggen
11.5k145066
answered Jun 26 '14 at 8:10
Jan Doggen
11.5k145066
answered Jun 26 '14 at 8:10
Jan Doggen
11.5k145066
11.5k145066
1
I think the OP meant they are making people redundant and hiring new people without allowing the redundant employees access to those job.
– Pepone
Jun 26 '14 at 9:56
Also newly hired staff might have less generous benefits.
– P.M
Jun 26 '14 at 13:04
@Pepone That's exactly the situation I'm answering
– Jan Doggen
Jun 26 '14 at 13:26
1
This question doesn't mean 'outsiders' in the sense of contractors (or foreigners, whichever you meant) it means 'hiring people from outside the company instead of keeping an existing employee and retraining'.
– DJClayworth
Jun 26 '14 at 13:35
add a comment |Â
1
I think the OP meant they are making people redundant and hiring new people without allowing the redundant employees access to those job.
– Pepone
Jun 26 '14 at 9:56
Also newly hired staff might have less generous benefits.
– P.M
Jun 26 '14 at 13:04
@Pepone That's exactly the situation I'm answering
– Jan Doggen
Jun 26 '14 at 13:26
1
This question doesn't mean 'outsiders' in the sense of contractors (or foreigners, whichever you meant) it means 'hiring people from outside the company instead of keeping an existing employee and retraining'.
– DJClayworth
Jun 26 '14 at 13:35
1
1
I think the OP meant they are making people redundant and hiring new people without allowing the redundant employees access to those job.
– Pepone
Jun 26 '14 at 9:56
I think the OP meant they are making people redundant and hiring new people without allowing the redundant employees access to those job.
– Pepone
Jun 26 '14 at 9:56
Also newly hired staff might have less generous benefits.
– P.M
Jun 26 '14 at 13:04
Also newly hired staff might have less generous benefits.
– P.M
Jun 26 '14 at 13:04
@Pepone That's exactly the situation I'm answering
– Jan Doggen
Jun 26 '14 at 13:26
@Pepone That's exactly the situation I'm answering
– Jan Doggen
Jun 26 '14 at 13:26
1
1
This question doesn't mean 'outsiders' in the sense of contractors (or foreigners, whichever you meant) it means 'hiring people from outside the company instead of keeping an existing employee and retraining'.
– DJClayworth
Jun 26 '14 at 13:35
This question doesn't mean 'outsiders' in the sense of contractors (or foreigners, whichever you meant) it means 'hiring people from outside the company instead of keeping an existing employee and retraining'.
– DJClayworth
Jun 26 '14 at 13:35
add a comment |Â
2
Voting to close because the question is too broad.
– Vietnhi Phuvan
Jun 26 '14 at 6:24