Benefits November 20, 2001

Axe Can Be a Double-Edged Sword

November 20, 2001(PLANSPONSOR.com) - Executives at companies that are currently wielding the job-cutting axe fear that their key employees, concerned about layoffs, will search for pastures greener, a new survey finds.
Reported by

The survey by InsightExpress, an online market research firm, found that 59% of respondents at companies that have recently trimmed payrolls are worried that layoffs will encourage remaining employees to look for new jobs.

In addition, 62% of company executives who have reduced staff fear that reductions would decrease customer loyalty and encourage business customers to seek other suppliers.

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Of the companies who have reduced staff in the past 6 months,

  • some 46% have reduced staff in operations,
  • almost 40% have reduced staff in administration, and
  • a little under 30% have reduced staff in customer service

Other areas of staff reduction include:

  • accounting and finance, where staff has been reduced at 22% of the companies,
  • sales, where jobs have been cut at 20% of the sample,
  • human resources positions, at 19%,
  • marketing, at 17%
  • engineering, at 16%
  • product development at 17%
  • technology/IT at 13%, and
  • other positions at 14% of companies

In response to these staff reductions, 42% of all companies indicated they plan to reallocate company resources, including human capital, asking employees to

  • be more efficient,
  • contribute more, and
  • work longer hours

The survey comprised the responses of executives from 500 between October 19 and 24, 2001.

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