Workers Retention can Help Businesses Cope with the Economic Downturn

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Matt Armanino, chief executive and partner of accounting and consulting firm Armanino LLP has criticized the decision by several companies to lay off workers as a tangible solution to the ongoing economic downturn.

His position complements a PwC survey showing that 38% of executives pick talent acquisition as a serious risk. Almost two-thirds of executives have either changed or are planning to change processes to address the workforce shortage.

Armanino describes the staff cuts as “penny wise and pound foolish” for companies looking to achieve saving. Already many companies are eyeing workforce reduction before the coming recession with 80% of hybrid and fully-in person companies already considering laying off staff during the economic dip according to a study released Thursday by freelance platform Fiverr.

Armanino said that the ever-increasing cost of hiring, training and retaining new workers “makes reducing the workforce a very, very costly way to try to find savings.”

He pointed out that cutting staff only to rehire them later, after an unpredictable recession that may not go deep, could increase costs for businesses if they re-hire and rebuild.

As companies face rising prices and ongoing supply chain problems, they are also struggling to attract top talent in a tight labor market, underscoring why companies need to do their best to retain workers.

As a result, it can help companies keep costs down, rather than lay off workers, if they achieve a balance between skilled labor and investment in key technologies or tools.

The sources for this piece include an article in CIODIVE.


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