A Monster of a lesson…

Monster.com, the veritable cash-producing employment machine, is laying off about 15% of its workforce. Big deal, eh??

Actually, I believe there’s a teaching moment here…

That monster is laying off, in itself is little news; the part that drives me nuts:
1. Q2 sales increased 25%, almost $60M,
2. Share price is up almost 2%, and
3. Earnings are down almost 28%, caused by a 34% increase in operating costs, driven almost entirely by legal fees associated with their options-backdating investigation.

In this age of Talent Management, these layoffs will be borne almost entirely by human resources & finance staff cuts — seems “centralization” of sorts now makes more sense.

The restructuring should save $150M, less $70M in associated costs, and another $80M they’ll use for additional product upgrades and advertising. In other words, first-year wash.

Creating intentional redundancy (decentralized support staff), then changing course on that (centralized), seems no different to me than poor decision-making in any other event; they merely needed a market-palatable basis for the decision to reduce staff.

Have you ever seen a company, on the eve of layoffs, say, “This reduction will hurt bad in many ways, and make it more difficult for us to accomplish our mission…?” Only with those near-death (then who really cares anyway?)

Short-term vs. long-term focus is obviously difficult. Senior leaders could have some relief from investors if they would merely personally commit to longer-term results. Most can’t (or won’t) do that, principally due to their lack of confidence in talent. A vicious circle, of course…

Too often, we view staffing “planning” as asking managers how many people they’ll need — effectively abrogating our responsibility for effective workforce management to an unskilled manager who believes — rightfully so, for his/her world — that vacancies should be filled, and more hands make for lighter work.

And though we (self included) popularly use words like talent management and such, much of this issue is best handled through good ol’ staffing plans. The issue we have, I think, is becoming an uber-leader and activist for these plans.

For instance, a position left unfilled for 3+ months, with no subsequent business limitations, is a position that should go unfilled/canceled, or at the minimum, intensely scrutinized.

Further, I believe companies like monster — who announces these layoffs about once every other year — are hiding behind them as a subterfuge for inadequate ongoing performance management. In other words, every couple of years, they whack the deadwood that should have been managed earlier. This is far too common…

We all do that to some degree; think of the times we’ve participated in a layoff. Being the intelligent, non-union creatures we are, we use “performance” as the litmus for who stays/who goes. Remember how easy it is/was to select some — if not all — of those being laid off under that criteria. Sure, some are difficult; but many are simple to ascertain, since they’ve been under-performing unscathed for a period of time before.

That’s “our bad.”

If we manage more, we layoff less.

KB
Kevin Berchelmann
www.triangleperformance.com

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