After struggling to stay afloat over the last few years, Circuit City announced that it will close it's remaining 567 stores; adding about 34,000 to the fast growing list of unemployed in these uncertain economic times.
In 2007, Circuit City decided to lay off (replace) 3,400 workers. The decision was made to lay off top earning employees and replace them with lower earning ones. It's pretty easy to see the logic here: lower paying usually equals less experienced. Those of us in HR know that less experience means higher turnover, higher recruiting costs, higher training costs, and the list goes on.
When this decision was made, I wonder where was HR. Were they simply trumped by the decisions a CFO made? In a case like this, HR should have given facts and figures on the overall outcome of the decision over time, rather then simply looking at the cost savings of an employee's salary.
May this serve as an eye opener to us in Human Resources. Yes, it's important that HR decisions have the company's bottom line in mind; however, it’s equally important for HR to stand up for the moral and needs of employees.
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