This is the maiden voyage of a new blog post series we call "HR News You Can Use".
In this series we are going to curate timely stories out of the news and provide our insights on how they are relevant to HR leaders like you.
Our goal is to have this be a quick read and to provide a point of view on why this is important to know.
The New Normal – Low Unemployment, Continued Layoffs
In the 8/29 AJC there was an interesting article, "State Layoff Warnings On The Increase", that captured what is becoming the “new normal”. In the metro Atlanta area there are increasing numbers of large scale layoffs (as measured by the WARN notices) even though the measured unemployment rate continues to decline (now at 5%) and the number of jobs added continues to show month over month increases.
What are the reasons? In the article, Jeff Humphreys, director of economic forecasting at the University of Georgia, provides his own explanation:
“I don’t have a good explanation” for the rising job cuts listed in WARN notices, said Humphreys. “It’s a very healthy labor market right now.”
One possibility, he said, is that WARN notices reflect what’s going on with larger companies because the law is more likely to require them to report cuts. Big firms have been hit harder by weakness in overseas markets, he said.
Another possibility is a jump in merger deals that prompt companies to shed redundant jobs, he said.
It should be noted that reported job cuts in the State of Georgia has been reporting a steady increase in layoffs for the past four years (please refer to the AJC chart).
The common element tying all of these trends together is the pace of change in business continues to accelerate and organizations need to become agile in navigating the disruptive elements all around them.
As outplacement professionals, we understand and can make sense of what seems like a contradiction: a large organization laying people off while they are also actively hiring. What this signals is that the pace of change, and the strategies needed to address it, are hitting organizations across multiple fronts.
Are We Entering A New Age Of Corporate Social Responsibility?
The recent EpiPen controversy involving the embattled CEO of Mylan Heather Bresch may be signaling a new period of corporate social responsibility where the most important CEO and corporate metric is not solely shareholder optimization. There is going to be more demands on corporate leaders to balance social needs with financial returns.
In the case of EpiPen, the pricing and profit optimization strategy was well executed but the public relations fall out has been severe. You can say that this balancing has always been in place but it appears that we are entering a new period where a social consciousness is vital part of an organization’s persona.
Senior HR leaders should take note. As the stewards of the corporate culture, HR leaders will have to be keenly aware of this balance and lead their organizations appropriately.
