Sunday, July 22, 2012

Another reason companies aren't hiring: Bad internal accounting

Beside being picky and risk adverse, ompanies have poor HR accounting systems. They can tell you what a new hire costs but they cannot tell how much profit a new hire brings. The have no clue as to their HR cost structure other than a top level view. So when they cut 10% they either cut 10% across the board. Or they cut 10% from support and ask everyone to work harder.

A second factor is increased productivity from long hours and more work from existing employees. Many white collar employees routinely work more than 40 hours a week as the norm. Through the fear of layoffs, employers have expanded employee hours while reducing benefits and time off. The recession has reset everyone's job expectations. The sad part is we may be heading back to a 12 hour work day. Unfortunately, this productivity means firms do not have to hire.

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