The worse mistakes that is been made in the name of right sizing / downsizing is that the most affected group of people are the most senior. The business rational is that they are the most expensive to keep hence the cheapest to VSS out as the payback is faster. At minimum, the impact to bottom line improvement is dramatic.
What businesses are not able to value and account for is the worth of wisdom. Wisdom only come through experiences. You can’t teach wisdom. A lot of wisdom, unfortunately is in the minds of these old expensive people. We just don’t know how to access it but let me assure you if we could put economic value to wisdom, we would not be VSS-ing the old.
I read a great article (of course I now cant find it), that BP through all the downsizing and right sizing is having more work-related accidents in the well maintained refining facilites as compared to refineries in IRAQ, that have very little maintenance. But the guys in IRAQ have been there for years and know exactly how to keep their facilities running safely.
Canada focus says:
The study showed mature, large companies to be at greatest risk from the demographic shift, due to their hiring history – rapid growth through the 1970s, followed by downsizing in the ’90s that left them with few mid-career employees today. Leadership, sales and technical positions will be the hardest to fill.
The cost of losing older workers is high. Replacing an experienced worker can cost 50 per cent or more of their annual salary and the cost is higher in jobs requiring specialized skills, advanced training or extensive experience – all more likely in 50-plus employees.
Employers often complain the generation now entering the workforce lack core competencies – which can be counterbalanced by older employees. Many 50-plus workers have experience, dedication, focus, stability and enhanced knowledge.