Human Resources Strategy and Change: Essentials of Labor Cost Reductions and Crisis Management

Abstract

The following chapter provides some key insights and different perspectives on labor cost and how HR could proactively influence this substantial component and therewith-important factor of a company’s result, and also what to do if there is no other option than reducing labor cost and at the final end causing layoffs of employees.

When many organizations are faced with the need to cut labor costs, the approaches taken are generally very reactive and not really creative or underlying with real proven figures to provide a proper business case. Based on this the decision-making process is also very driven by the one and only synonym: labor cost reduction = layoff of active staff.

Also there is no global catchall solution that can solve the issue of cost cutting, especially when it comes to labor cost but some general perspectives that could be taken into account.