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From the Desk:
This Article:
By:
Career Crown™
Copyright:
© 2010 Career Crown™. All rights reserved. Illegal copying or distribution is liable for penal action.
Disclaimer:
The statistics and research expressed in this article are gathered from secondary sources and do not represent the independent work of authors. |
EFFECTS OF RECESSION ON CAREER GROWTH Job Loss, Pay Cut, Loss of Morale, Future?
The international business arena constantly presents us with an umbrella of challenges which defy the conventional ways of handling our professional lives. The great depression of 30s or the Asian Crisis of 1997 taught business leaders to be more informed when devising their business strategies and take responsible functional decisions to counteract adverse market conditions. However, the saying 'history repeats itself' was renewed once again in late 2008 when world markets reacted negatively to ailing housing industry, debt-laden banks and unsuccessful contingency plans of private and public sector companies. History is also evident to conclude that when trying conditions prevail, human resources; considered to the intellectual assets of organizations are the first to bear the brunt of downsizing as a result of cost-cutting by companies trying to save their competitive pillars.
Just after the financial crisis unfolded in September 2008, around 172,000 workers from non-financial and 89,500 workers from financial sectors around the world lost their jobs. By December 2008, nearly 500,000 workers lost their jobs in the US, totaling the number to 2.6m in the entire year. In Dubai, around 1500-2000 visa cancellations per day were seen as a result of the crisis. In Indian export market, job losses amounted 1.16m (2008-09) 1.3m (2009-10). In January 2009, International Labor Organization (ILO) predicted 50m job losses world-wide.
But then, there are those companies who try to avoid layoffs by offering their employees a pay cut. Example - "Accept a 20% pay cut to stay on your job or else, leave". Perplexed about the success of finding new employment opportunities in the recessionary market, many agree to a pay cut than loosing their job. In a survey conducted last year, almost 65% respondents are ready to accept 30% pay cuts and around 4% are willing to accept 50% less compensation than before.
But, for those who survive the lay-off have in fact experienced increased levels of stress, greater threat of job loss in the future, decreased morale, lack of creativity, job dissatisfaction and distrust. Hence, good fortune doesn't always mean good performance! To overcome this situation, top executives have tried to boost workers' morale by accepting bonus cuts but, this has never really worked. Reason being, that workers receive pay cuts on their base salaries whereas top executives simply remove a piece of cherry from the cake. Research shows, that such workers at last, voluntarily leave their jobs and start job surfing again.
Experts at Career Crown's Employee Relations Management (ERM) division believe that both laid-off workers and those who have survived it are likely to face stress. Generally, there is no clear solution as to whether one should stick around or leave their current employment because:
- Searching for a new job during
recession requires dedication and sacrifice of preferences in terms of industry,
job role - Sticking to the current job at a pay cut ultimately leads to more stress as research shows (above) - When market conditions improve, it
becomes more difficult to get back to previous and deserving salary levels
whether - Since Career Growth is a function of
experience, intellectual growth & pay rise, a lack of any one of these factors
will
ERM division suggests one possible solution for workers to speed up their career growth. The answer is by constantly focusing on intellectual growth along with experience. Fulfilling these two out of three elements of career growth will automatically lead to improved morale, foster motivation to grow, and will improve productivity. Experts in organizational behavior (a study of human behavior at work; close to psychology) have also suggested that gaining knowledge at work or for career progression makes workers happy about achieving something and boosts their confidence. As a result, good salary will then follow good work. For instance, workers can opt for management training programs or professional certifications demanded heavily in their industries. Workers can also persuade their employers to provide on-the-job trainings or to set a minimum annual training budget. Again, for those who wish to leave their current jobs and enter new industries, training or professional certifications are the key to quickly learn about their new roles, develop an expertise, show dramatic improvements at work and seek long-term growth. Experts at ERM division believe that such a strategy by workers will always keep them positive and increase their chances of being successful.
By - Employee Relations Management (ERM) Division, Career Crown™
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