Assume for a moment that you were a small new company seeking talent that was in high
demand. Based on the material in this chapter, how might you go about competingagainst larger and more established firms in terms of how, where, when, and who youwould use to recruit the best employees?
2.238 CHAPTER 5 Human Resource Planning and RecruitmentAlthough the global economic recession of 2007–2008hit all countries hard, some nations were able toweather this storm better than others, at least withrespect to layoffs and unemployment. For example, inHolland, even at the peak of the recession, the Dutchunemployment rate was at just 3.7%, well below thedouble-digit numbers experienced in the UnitedStates. Much of the credit for this can be traced to socalled“short-work” programs established in the Netherlands,where government intervention and subsidieshelp soften the blows associated with sharp swings inlabor demand and supply.Short-work programs were historically introducedin Holland during the Nazi occupation in the 1940sbut they were often re-introduced after the SecondWorld War during times of dire need. In the mostrecent recession, to qualify for a subsidy, an employerhad to show that their organization experienced a30% drop in revenue over a two-month period, thusqualifying as a “sharp swing.” Rather than resortingto layoffs, the company simply reduces the hours eachperson works, and then the government pays workersfor a large percentage of the hours that were lost.For example, at DAF Trucks, even though demandfor trucks dropped by over 50% in 2009, the companymaintained over 80% of its full-time staff.Although pay is off slightly relative to normal, mostemployees on short work take home about 85% of whatthey would normally make, and as one DAF workernoted, “it sure beats being unemployed.” The practicealso helps the employer, who gets to retain highlytrained workers that might otherwise be lost forever.Especially during short-term shocks, valued employeesmight be unavailable for re-hire once the demand forlabor rebounds, and hence a short-term shock resultsin a long-term, irrevocable loss. Indeed, not only dothe companies get to retain valued employees, in manycases these same workers wind up using the time offto upgrade their skills. Finally, although there are someupfront costs for the government when they providethe subsidies (roughly 2 million euros for the Dutch),this is somewhat offset by the reduction in costs associatedwith unemployment compensation that are alsoborne by the government.Short-work programs do have their critics, however.Some of the criticism is strictly financial, in thesense that it results in a deficit spending model forthe government. For example, in Holland, the countrywent from having a government surplus of 1% GDPto a deficit of 5% in a single year. Some of the criticismis more ideological, in the sense that the programsseem to have a communist feel to them. For example,Rick Van der Ploeg, an economics professor at OxfordUniversity, claims that “this is sharing poverty plainand simple.” Finally, some of the criticism hinges oncompetitive dynamics, in the sense that if the downturnis not just a short-term cyclical drop, but rathera long term structural change in the economy, thispractice “locks” people into obsolete jobs. Clearly, thedebate about the costs and benefits of such programswill go on in other countries, but in the meantime, theDutch have a long-term commitment to short-workprograms.QUESTIONS1. If you were an employee in a context where therewas a labor surplus, would you prefer a short-workprogram or would you prefer to just quit and find anew job?2. If you were an employer, how does a short-workprogram help you out in times of trouble, and whymight you be tempted to be in trouble all the time?MANAGING PEOPLEShort-Work Programs Buffer Workers and Firms2. Assume for a moment that you were a large andwell-established company, but learned recentlythat many of the people you were recruiting werechoosing to go to smaller and less well-knownupstarts. How might you go about competingagainst these smaller companies in terms of how,where, when, and whom you would use to recruitthe best