Addam Marcotte Featured in Wall Street Journal Article on Global Layoffs
The article, by Courtney Vinopal, focuses on the impact of global layoffs amidst the economic uncertainty of 2023 - and how many employers are getting it all wrong.
SAN DIEGO, CA – February 15, 2023 – Addam Marcotte, Managing Principal at FMG Leading, was recently featured in a Wall Street Journal article focused on the unintended consequences of mishandling global layoffs.
The article offers the following advice for leaders operating in a global environment:
Think about the timeline.
If a business is facing an acute situation where it needs to cut costs urgently, it may not make sense to terminate workers in European countries such as Germany, France or Sweden, for example, where it could take several months to implement layoffs because of local regulations requiring advance notice and consultations.
Addam Marcotte
Unfortunately, HR departments may decide layoffs should focus on employees in countries with less stringent labor laws, such as the U.S. or even the U.K., rather than deal with “some of the challenges, costs and frustration of trying to cut across Europe,” Mr. Kaplan said.
Be aware of costs.
While layoffs may send an encouraging sign to Wall Street that companies are cutting costs, implementing them is generally more expensive than people realize, said Josh Bersin, who runs the Josh Bersin Co., a research and consulting firm that advises HR leaders on workforce strategies. If layoffs are occurring in regions where employers are required to give affected workers severance or pay out their accrued vacation—as is the case in many European countries—those costs will add up, he said.
Comply with local laws.
In many countries, employers will often have to demonstrate why they need to terminate workers, and in some cases seek the government’s approval. They also may need to observe a notice period, and consult with a union or works council representing employees to negotiate the terms of a layoff, including payment of benefits such as severance.
Certain countries require employers to present a “social plan,” in which they lay out the retraining efforts or alternative employment opportunities they will offer to laid-off employees, noted Janice Bellace, a professor of legal studies and business ethics at the University of Pennsylvania’s Wharton School of Business.
“U.S. organizations and leaders have the challenge of representing not just their company, but the country. How terminations are taken abroad really reflects a U.S. mind-set.”
Determine who can be laid off.
Local laws also can dictate who is let go. In China, for example, employers are expected to prioritize keeping sole wage earners supporting another individual at home, such as an elderly relative or a child. Germany and Italy require employers to consider factors such as tenure and family commitments. The Netherlands follows a “last-in, first-out” principle, whereby employees who have been at the company for the shortest amount of time would get the pink slips first.
“There are literally very different views in different societies about who would be best able to withstand a layoff,” said Sandra Sucher, a professor of management practice at Harvard Business School and a trust researcher.
Account for cultural considerations.
One rule of thumb is to be aware of timing, so as not to interfere with holy weeks or other celebrations that might not be on a U.S. domestic radar, said Addam Marcotte, Managing Principal at FMG Leading, a human-capital advisory firm.
“U.S. organizations and leaders have the challenge of representing not just their company, but the country,” he said. “How terminations are taken abroad really reflects a U.S. mind-set.”
Read complete article here.
