Not surprisingly, unemployment still on the rise

Last week, the Bureau of Labor Statistics reported that the American economy lost 467,000 jobs in June, bringing the unemployment rate up to 9.5 percent. While many were stunned to see yet another month of negative numbers amid talks of an imminent economic rebound, I'm not really that surprised.

Employment is a lagging indicator of economic success. It can take several months for companies to become stable enough to slow the pace of layoffs and resume hiring. Therefore, it's not unusual, coming out of a recession, to continue to see negative employment numbers, despite positive signs elsewhere.

What execs really need to be asking themselves now, is: At what point does reducing headcount begin to negatively impact productivity, leading to loss of market share and decreasing your organization's ability to operate efficiently?

For some companies, this turning point comes so quickly, that layoffs are not the best workforce management strategy, particularly in a poor economy. The last thing you want to do is dig your organization into a hole, so that it's unable to emerge when the economy does finally turn itself around.


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