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Why you should keep hiring even when you’re laying off

Many businesses facing tough times put a sinking lid on headcount, not replacing leavers, culling contractors (which begs a few questions), and halting new hires. All standard stuff, but if you’re a mid-scale or larger employer, you should think carefully about that last one, if it means cutting out your new trainee intake. When the economy picks up again, you’ll struggle to find the juniors you need. If you have a structured graduate intake which feeds into your entire career structure (especially the professions), you risk the long term future of your business if you do not maintain some level of new intake.

I remember one downturn in the IT industry in the late 70s. No graduate trainees were taken on for 3 years in the company where I worked. That effectively destroyed the company’s previously very strong training capability (trainers, programmes and processes), but, more importantly, the company was missing 3 years of talent that would have become specialists, team leaders, project managers, sales people, etc just at the time when IT entered a phase of strong growth in the early 80s. Its graduate intake programme was never the same again. That wasn’t the only factor, but I believe it was a significant one in the long term malaise the company suffered thereafter.

Frankly there’s a lot more cost in keeping on one senior or mid level manager, compared to a few trainees. Yes, you need to make tough decisions to survive tough times, but your trainee intake should be one of the last things you cut, not one of the first, and in the full knowledge that you’re compromising your future.

First posted November 16th, 2008