Induced turnover
George Cantor notes this morning that the Ford Motor Company stumbled in its decision to get rid of long-term employees:
It seems mistakes were made when the company adopted a policy that shoved experienced employees out the door in favor of young tigers with leadership potential.
Ford realized belatedly, and only after ex-Chief Executive Jacques Nasser was himself deep sixed, that it is hard to run a company without the long-termers, who don't especially want to be managers but do know what they're doing. Some lawyers also pointed out rather forcefully to Ford that the policy was probable age discrimination.
So the company is out a ton of experience and $10.5 million to settle class action lawsuits. That's a pretty big whoops.
But corporations, and all institutions, never seem to learn. In their eagerness to stay young and replenish themselves, they lose sight of their loyal core.
Of course, an employer who adopts such a policy does so in order to cut costs. In any organization, the group of long-serving employees includes some deadwood and some key minds with significant needed experience and ingrained wisdom. Unfortunately, no "early out" program has been devised to distinguish between the two.
Cantor does not go on to connect this observation with the fact that the State of Michigan, in adopting its early retirement program this year, did the same thing. The State has undoubtedly cut its personnel costs tremendously. Some positions will not be refilled, and those which are will be filled with people earning much less.
The result will be cost savings accompanied by a remarkably diminished capability on the part of the State of Michigan and its agencies to provide services to its citizens. That is one of the sobering realities that our new governor will need to face.
Many corporations fill the void by going back to the key talent and hiring them on as "consultants" to get them through the immediate need. That is an option that state government typically does not have.
8:37:06 AM 
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