Career Management Alliance Blog

Ann Bares of the Compensation Force blog has an insightful post on Circuit City’s decision to cut 3,400 jobs, or 7% of its workforce, (mostly sales staff) and replace them with lower paid employees. While it’s hard for me to understand how this strategy will be beneficial to them in the long run, downsizings, restructurings, and mergers and acquisitions are a reality for many corporations and the post made me think about corporate cultures and business cycles and what a downsized employee at Circuit City or any other company can glean from a corporate restructuring. Here are a few things to keep in mind before you write off a previous employer.

Sometimes companies cut too deep
Business forecasts change and sometimes a company’s estimate of what percentage of a workforce needs to be reduced isn’t the reality. When companies realize that they have let go of too many people and they need to recruit additional talent, they often reach out to their alumni to fill those needs. This population, sometimes referred to as boomerangs, can provide significant value to the organization because they need little training, already understand the company’s culture, mission, and performance standards, and can quickly assimilate back into the everyday routines of the firm. Don’t burn any bridges with a previous employer. The relationship that was recently severed could be reborn at some point in the future.

Outsourcing and offshoring doesn’t always work
Often outsourcing just makes good business sense. Other times the cost savings don’t outweigh the potential customer service and operational issues that can plague functions that move offsite. Outsourcing tends to be cyclical and what’s in vogue today might be old hat tomorrow. Watch trends closely to see if functions that were previously outsourced are re-emerging within the organization, job function, or industry.

Cheaper doesn’t mean better
Companies that replace a well paid employee with someone who is recruited at a lower level or salary don’t necessarily get comparable talent. If earnings or customer service suffer, the company will be more likely to pay for performance and recruit at competitive market rate. An employee who once seemed “expensive” can suddenly look like a “bargain” when their replacement doesn’t meet the performance expectations of the job. Maintain confidence in your value add and continue to source opportunities based on your competitive market value rather than less relevant indicators such as past salaries or how much money you think you need to earn.

Things change
Corporate goals and leaders can change very quickly. Stay abreast of the changes occurring at previous employers to determine if their changed culture is consistent with your value system and ideal work environment. A culture that was a poor fit at one point in your career could morph into a best place to work in the future.

Posted by Barbara Safani