{"id":61281,"date":"2020-07-16T18:24:08","date_gmt":"2020-07-16T18:24:08","guid":{"rendered":"https:\/\/explore.local\/2020\/07\/16\/business-case-for-labour-hoarding\/"},"modified":"2025-04-04T19:38:12","modified_gmt":"2025-04-04T19:38:12","slug":"business-case-for-labour-hoarding","status":"publish","type":"post","link":"https:\/\/degreed.com\/experience\/fr\/blog\/business-case-for-labour-hoarding\/","title":{"rendered":"Let Go of Letting People Go: A Business Case for Labour Hoarding"},"content":{"rendered":"\n<p>I\u2019d like to think we can agree on this: People are the most valuable asset of any business. People are responsible for the knowledge, skills, and innovation that create economic well being. This is the promise of human capital.<\/p>\n\n\n\n<p>Yet <a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.cnbc.com\/2020\/03\/30\/coronavirus-jobs-survey-49percent-of-companies-considering-layoffs.html\" target=\"_blank\">49% of companies<\/a> in the United States that responded to a recent survey were considering layoffs. More than a third said they were in a hiring freeze.<\/p>\n\n\n\n<p>Make no mistake, the health and financial hardships brought on by the ongoing COVID-19 global pandemic are devastating. We\u2019re on unprecedented economic terrain.<\/p>\n\n\n\n<p>Still, any business that can do so should make every effort to retain its workforce.<\/p>\n\n\n\n<p>Keeping employees is more than a good-faith move. It\u2019s a move that could pay off in a big way financially.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Layoffs Are Not the Answer<\/h2>\n\n\n\n<p>If your company\u2019s short-, medium-, and long-term goals are to survive, recover, and grow, respectively, then diminishing your capacity to deliver because of a sudden, temporary demand shock may simply delay your downfall.&nbsp;<\/p>\n\n\n\n<p>There\u2019s a better response. It\u2019s labour hoarding, and it might just turn out to be the master stroke of companies thinking seriously about getting back to their pre-crisis performance levels quickly. This includes a few, extra fortunate organisations that will slingshot right through the recession.<\/p>\n\n\n\n<p>In every one of these success stories, workforce mobility \u2014 the ability for people to learn new skills and pivot to new responsibilities and roles within an organisation \u2014 will likely play a major role.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/explore.degreed.com\/wp-content\/uploads\/2025\/04\/Blog-in-post-1-2-2-1024x576.png\" alt=\"&quot;I've been a leader during three recessions and I've never heard a management team talk about how the choices they make during a downturn will affect performance during the recovery. But in 2008 and 2009, I kept reiterating that point: There will be a recovery, and we need to prepare for it.&quot; - David Cote, Ex-CEO, Honeywell\" class=\"wp-image-36890\"\/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">The Cost of Recruitment is High<\/h2>\n\n\n\n<p>The argument in favour of labour hoarding is this: Retaining workers, whenever and wherever possible, saves precious time, knowledge, and money essential for economic recovery. This is true at individual companies and across the global economy. David Cote, ex-CEO at Honeywell,&nbsp; made the argument for a more thoughtful approach to decision-making. \u201cI\u2019ve been a leader during three recessions, and I\u2019ve never heard a management team talk about how the choices they make during a downturn will affect performance during the recovery. But in 2008 and 2009, I kept reiterating that point: There will be a recovery, and we need to be prepared for it.\u201d<\/p>\n\n\n\n<p>Staffing considerations are a huge part of that preparation.<\/p>\n\n\n\n<p>Voluntary employee turnover<a href=\"https:\/\/cdn2.hubspot.net\/hubfs\/478187\/2017%20Retention%20Report%20Campaign\/Work%20Institute%202017%20-Retention%20Report.pdf\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\"> costs a company roughly 33%<\/a> of that employee\u2019s annual salary, according to the Work Institute.<\/p>\n\n\n\n<p>Indeed, studies show that the total cost of losing an employee can range from tens of thousands of dollars to one-and-a-half to two times that person\u2019s annual salary, <a href=\"https:\/\/www.linkedin.com\/pulse\/20130816200159-131079-employee-retention-now-a-big-issue-why-the-tide-has-turned\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">according to talent industry analyst Josh Bersin<\/a>. He notes that the total cost includes: hiring a new person (advertising, interviewing, screening, hiring), onboarding a new person (training, management time), and lost productivity (a new person may take one to two years to reach the productivity of an existing person).&nbsp;<\/p>\n\n\n\n<p>Let\u2019s break this down further. We can estimate the cost of re-hiring 1,000 employees who make the average U.S. income of&nbsp; $48,672 per year is about $16 million (48,672 X 1,000 X 33%). This doesn\u2019t factor in economies of scale, which would have an effect, of course. Still, when viewed somewhat hypothetically like this in a lump sum, there\u2019s no denying the money could be better spent elsewhere.&nbsp;<\/p>\n\n\n\n<p>Time-to-hire and, more importantly, time-to-productivity are major factors in workforce planning.<\/p>\n\n\n\n<p>In most cases, the skills required for a project are only identified with the initiation of that project. And although it varies widely by industry, the average time-to-hire is 20 to 40 days, meaning many initiatives are playing catch up from day one. When timelines fall out of a hiring manager\u2019s control \u2014 for example, when he or she is responding to a crisis \u2014&nbsp;delivering results on time becomes nearly impossible. <\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/explore.degreed.com\/wp-content\/uploads\/2025\/04\/Blog-in-post-2-6-1024x576.png\" alt=\"\" class=\"wp-image-32323\"\/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Labour Hoarding Makes Sense<\/h2>\n\n\n\n<p>Instead of spending a third of a worker\u2019s salary on hiring a replacement, retain that worker. If you can\u2019t put that employee to work like you used to, provide four months paid upskilling time or reskill and deploy the employee to a different part of your business.<\/p>\n\n\n\n<p>In other words, use downtime to gear up. Implement an upskilling strategy that will keep your business competitive and agile. When the recovery comes, thanks in part to your forward-thinking actions, your organisation will emerge with momentum. Your balance sheet will thank you.<\/p>\n\n\n\n<p>The upside to labour hoarding is immense \u2014&nbsp;if you\u2019re willing to be bold and get a bit creative. Download our guide, <a href=\"https:\/\/get.degreed.com\/7-steps-for-upskilling-your-workforce?utm_source=blog&utm_medium=banner&utm_campaign=upskilling%20guide\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"7 Steps for Upskilling Your Workforce (opens in a new tab)\">7 Steps for Upskilling Your Workforce<\/a>, to learn more about upskilling and retaining your people. <\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/get.degreed.com\/7-steps-for-upskilling-your-workforce?utm_source=blog&utm_medium=banner&utm_campaign=upskilling%20guide\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" src=\"https:\/\/explore.degreed.com\/wp-content\/uploads\/2025\/04\/7steps-blogpromo_blog-cta.png\" alt=\"Download our guide to upskilling\" class=\"wp-image-32320\"\/><\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>I\u2019d like to think we can agree on this: People are the most valuable asset of any business. People are responsible for the knowledge, skills, and innovation that create economic well being. This is the promise of human capital. Yet 49% of companies in the United States that responded to a recent survey were considering [&hellip;]<\/p>\n","protected":false},"author":125,"featured_media":61286,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[658],"tags":[840],"post_folder":[],"class_list":["post-61281","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-skills-talent-mobility","tag-montee-en-competences"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.2 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>A Business Case for Labour Hoarding - Degreed<\/title>\n<meta name=\"description\" content=\"Keeping employees is more than a good-faith move. It\u2019s a move that pays off in a big way financially. 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