The advent of Artificial Intelligence (AI) has fuelled an unprecedented revolution in various sectors with the workplace experiencing significant transformation.
AI has permeated innumerable facets of our daily routines, resulting in significant changes in the way many organizations operate which has delivered momentous improvements in productivity and efficiency. Repetitive tasks, like data entry, analysis of large volumes of data and generating insights, and many such tasks that are time consuming have been automated allowing employees to refocus their energy and time on high value-driven, complex, and creative tasks enhancing the companies’ competitive advantages in their respective markets.
One cannot discuss AI without the mention of its inherent current challenges. A key among these challenges revolves around job displacement, as automation has render certain jobs obsolete. The worst hit of these jobs are found in the routine-intensive sectors like manufacturing and customer service. Research into the effect of AI implementation indicates that about 51% of all work activities could be automated. This revelation has generated huge concern as there anticipate masses of disruptions in the labour market.
It is trite knowledge that the integration of AI at the workplace comes implications. However, its adoption should not be resisted despite its implications particularly on workforce.
As indicated above, whilst AI may increase employee productivity, decision-making and overall organisational efficiency, it concurrently presents daunting challenges of job displacement resulting in layoff exercises. In recent times the world has experienced many of the global giant companies engaged in layoffs. Companies like Amazon, Microsoft, Google, Spotify, and the like have laid off thousands of employees with others hinting of more layoffs soon to be carried out. These layoffs, many as they have been and yet to happen, predominantly, are within the technology industry. Irrespective of its impact, however, layoffs are not entirely negative as we are usually made to believe but also have lots of inherent opportunities for both businesses and employees. This write-up highlights some of the causes and opportunities layoffs bring to both businesses and employees.
CAUSES AND OPPORTUNITIES FOR BUSINESSES
The reasons resulting in layoffs vary depending on the circumstance. Understanding these causes, therefore, can help shed light on the resulting opportunities. Here are some common causes and potential opportunities that can lead to and arise from layoffs, respectively:
- ECONOMIC DOWNTURN: Periodically, markets experience economic recessions or market downturns. During economic recessions or market downturns companies may implement layoffs among other initiatives to reduce costs and adapt to the prevailing market conditions. Such situations, however, have often led to the birth of new businesses and industries. These occur when entrepreneurs identify the gaps and opportunities that are created in the market as a result of the economic downturn. The successes in creating the needed solutions to meet evolving customer needs have resulted in new businesses and or industries. These opportunities have been maximised from identifying and creating niches from the problems that have been overlooked or that have disrupted the market thus causing the economic downturn.
- TECHNOLOGICAL ADVANCEMENTS: Technological advancement has sparked tech innovations giving way to automation of routine activities, thus allowing streamlining of work processes and replacement of certain job functions at the workplace. These happenings occasion job losses. They, however, also present opportunities for employers to reskill or upskill their employees to remain relevant in the mist of the emerging technological changes. By acquiring these new relevant skills, employees are able to transition into the new roles created as a result of technological innovations that align with the changing demands of the job market and business objectives.
- RESTRUCTURING AND MERGERS: Companies sometimes undergo restructuring and mergers for business strategic purposes. These exercises mostly may result in reduction of staff numbers and or creation of new roles to optimize operational efficiency and or eliminate duplicate roles. To achieve the desired results that positions a company for future economic prospects one of the low-hanging fruits that companies take advantage of is to reduce staff numbers through staff layoffs. As a result of this action some employees may lose their jobs thus, affecting their earning abilities. Notwithstanding the downsides, these situations also create opportunities for companies to reorganize their workforce by upgrading job contents and skills requirement that meet their new objectives and business models. To ensure the achievement of these new objectives, therefore, companies have to design programmes that reskill or upskill employees for the upgraded roles with their skills requirements. This practice will allow companies to save money that can be used to pay severance, cut down on recruitment cost and time, thereby maximising the readily available resources.
- SHIFTING CONSUMER PREFERENCES: Studies have shown that changes in consumer behaviour towards a product may impact negatively on industries and companies. When these happen, companies may have to reassess their operations to take actions that are favourable to their survival and meeting the demands of customers. The result may be to layoffs staff as a measure to cut down on operational cost. This undertaking, however, creates employment opportunities for companies in other sectors of the economy that hitherto could not get talent or that are aligned with the changing preferences and needs of consumers. Thus, these companies are able to afford hiring of these talents and sometimes at a low cost.
- COST-SAVING MEASURES: Companies sometimes go through financial difficulties. This may sometimes cause companies facing financial challenges resorted to layoffs as a cost-saving measure among others. It has, however, been proven that reducing labour costs can create opportunities for businesses to invest in other areas of their operations like innovation and research to drive greater efficiency and competitiveness within their target markets. Again, savings made from layoffs can be invested in technology, new product development, or expansion into new markets that creates additional job opportunities for employees.
THE BENEFITS OF LAYOFFS TO EMPLOYEES
While work layoffs can be challenging and disruptive to employees due to loss of jobs or new ways of working, however, there can also be some potential benefits that employees may derive and maximise to their advantage, if properly handled. Here are a few of these benefits that employees may experience during work layoffs:
- SEVERANCE PACKAGES: Most layoffs result in the affected employees being offered severance packages in fulfilment of the legal requirements contained in the Labour and employment related laws. Usually, these packages are negotiated between employers and the relevant labour organisations. These packages can include financial compensations, company’s product, extended healthcare benefits, and other forms of support. The essence of this piece of legislation and practice are to minimise the personal and social effect layoffs may have on the affected employees by providing financial cushion within a reasonable time by when an employee may secure a new job opportunity. Employees can make good sums of monies from layoffs due to the formulas used making sure that affected persons are adequately compensated.
- CAREER REEVALUATION AND GROWTH: As indicated earlier layoffs allow other sectors in the industry or economy to take advantage of the available skills for recruitment into available roles. Another benefit from layoffs is that they serve as a catalyst for individuals to reassess their career paths, reorganise themselves and explore new opportunities. It offers a chance to employees to reflect on their skills, interests, and values and consider a career change or to consider moving into a totally different industry or role. Layoffs have resulted in some employees discovering new passions and have found a more fulfilling professional paths that have benefited them significantly.
- INCREASED MARKET VALUE: During layoffs affected employees tend to seek new job opportunities. When successful in landing new jobs, employees in the process may gain or enhance their skills, update their knowledge, and gain new experiences which can increase their market value and make them more attractive to other potential employers. Where affected employees seize the opportunity to upgrade themselves by undergoing some training programs, certifications, and professional development opportunities, these can positively impact their long-term career prospects and market value.
- NETWORKING OPPORTUNITIES: Another advantage that employees included in a layoff exercise can leverage is joining professional networks for connections and sharing of ideas. This act could land affected employee new roles and positions within the network which could make them become valuable contacts for future job opportunities. Additionally, taking part in networking events, online platforms activities, and support groups can enable individuals to expand their network and unlock potential job or career leads. These groups may also expose affected individuals to new business opportunities that could bring massive financial transformation and or personal fulfilment.
- TIME FOR SELF-REFLECTION AND PERSONAL GROWTH: Even though it can be devastating to many affected persons, layoff situations have served as a moment for self-reflection for others. The work environment can be involving and time-consuming living individuals little to no time for self-reflection for a long period. Layoff, therefore, can be a valuable period for self-reflection that can lead to personal growth, focusing on hobbies, spending quality time with family and friends, or engaging in activities that were previously neglected due to work commitments. Taking a break from the stress of work can contribute to healthy mental and emotional well-being. This can provide total relaxation which could ultimately enhance an individual’s readiness and resilience for performance in new job opportunities when they eventually arrive.
- ENTREPRENEURIAL OPPORTUNITIES: To a good number of affected employees, layoff is considered a good opportunity to starting their own businesses or pursuing freelance work. This is so as layoffs usually provide reasonable financial compensation that can serve as seed money or capital for a new business. Thus, layoff provides an opportunity for individuals to turn their skills or passions into full-time endeavours and allow them to have more control over their personal interests or professional paths. This entrepreneurial journey can open new avenues for personal growth, financial independence, and professional satisfaction.
As has been demonstrated above layoffs have many benefits aside its negative effect to employees and employers. It is, however, important to note that while there can be potential benefits to both employees and employers in some layoff situations, these advantages may not apply universally. It is crucial for individual employees and employers to critically assess their specific circumstances to seize advantage of the opportunities that align with their own goals and aspirations, customers, and market needs, as well as regulatory requirements.
ABOUT THE AUTHOR
DENNIS YAW MATEKPOR HEDIHOR is an Associate with Employment and Labour Practice Group of Sustineri Attorneys PRUC, a client-centric law firm specializing in Corporate, Transactions, Tax and Disputes. Dennis welcomes views on this article and is reachable at dennis@sustineriattorneys.com