Unemployment: Companies Cut Pricey Older Workers

I read an interesting article about how people manage their stocks that I think applies to the issue of unemployment and the firing of older workers.

The story goes that if someone has a portfolio of several stocks, half of which are losers, most people don't want to admit that those stocks are losers. Rather than sell them, they hold onto the bad-performers thinking that they'll rebound and eventually make money. These folks then sell off the winning stocks and take the profit to buy new stocks. Half of them are likely to be losers as well. Later, the winners are again sold off, with the losers retained, in the hopes that they'll "rebound." This pattern continues until all the good stocks are gone, and all that's left in the portfolio are loser stocks. And eventually you lose your shirt.

The same applies to personnel: if you have a dedicated, well-trained and (very important) experienced workforce, what do you do with them when you have to respond to a market crisis like we're in now? You fire some of them, that's what.

But whom do you fire?

Simpleton logic might dictate that you just fire the ones who make the most money, so you can save on labor costs. But then you lose your best, most experienced and tested people. They are replaced with untested newcomers who don't know the business or the clients. What happens? Sales go down even further. Requiring more lay-offs. And the next tier of well-paid, experienced workers goes out the door. Eventually, only new hires are left.

Businesses need to keep their eye on the ball. That ball doesn't have the word COST written on it, but should display the word EFFICIENCY. More experienced workers are simply more efficient. They know the company, require little to no maintenance, and just do their job, usually unsupervised (maybe lay off some supervisors, how's that?!).

Efficiency dictates that those who bring in the most revenue for the least outlay should be kept. Those are usually the older employees. But nooooo....

So just as one should sell his loser stocks and take the loss, keeping the long term in mind, so should businesses keep the older, yet higher-paid, workers on staff. In both cases, you'll do far better in both the short term and the long run.

ABC News: Unemployment: Companies Cut Pricey Older Workers:

"Anecdotally, some recruiters say they are filling positions once held by older workers -- defined by the federal government as those over 40 -- with eager, inexperienced college graduates."

Marvin Copes ( CPM, PhD) : Gray Power: Debunking myths about older workers:

"Some people think of older adults as frail and sick. They fail to see older adults as healthy, competent, energetic, active people and therefore fear that they will have high absenteeism and tardiness rates.

But in reality older workers tend to have less incidence of absenteeism and tardiness than their younger counterparts."