What To Do When There is a Labour Surplus

In any large organization, labour surplus is something that can occur quite frequently especially if you are busier in the summer compared to the winter season. With the GWC Valve USA Organization, this has once happened to them and they had no idea how to approach the matter except for laying off their employees, or doing seasonal hiring instead. The company wanted to learn about better ways of dealing with labour surplus instead of simply laying off an employee who has to support themselves or their families.

When it comes to labour surplus, this means that there is an excess amount of employees at the organization for the company’s demand. There are nine different ways that a large organization can deal with labour surplus and employers usually start of with a hiring freeze meaning the openings in a company are reassigned to current employees and no external people get hired. Attrition, which is the normal separation of employees because of resignation, retirement or even death. Some organizations actually attempt to accelerate attrition by offering early retirement of buyouts to their employees.

Early retirements is an attractive way to accelerate attrition  and help with labour surplus just make sure to put a limit on the number or employees who are allowed to take this package such as employees over the age of 50 who have worked more than 5 years at the company for example. Job sharing is another strategy that organizations like to use since it allows two individuals to divide the duties of a single position. Work sharing is when employees will work only three or four days instead of five days and will receive employee insurance on their day or days off of work. Reduced workweek is when employees work less and receive less money. Layoff is when you temporarily withdraw an employee from their work. Termination is the permanent separation of an employee from the company. Then the last labour surplus solution is leave of absence, which allows employees to take time away from work for reasons like personal or even education with a guarantee that they will have the same job when they come back.