Better Treatment for Laid-off Workers UrgedThe Korea Labor Institute (KLI), a government think tank, released a report August 27 titled 'The Ten Principles of a Successful Restructuring.' The report is aimed to influence the second round of financial and public sector restructuring likely to take place later this year.
The report insists that Korean firms are so fixated on streamlining their operations that they neglect to systematically manage the workers that they dismiss as part of their restructuring. The report notes that post-layoff support and education are standard in the United States, and that these should be considered investments, not unnecessary expenses.
The implication is that the more the firms help the laid-off workers, the more loyalty and productivity they will get from their employees. Those who survive a round of restructuring tend to be less productive, according to the report, because they feel guilty in relation to their fired coworkers and overburdened by the increased responsibility.
The report emphasized the importance of minimizing the scale of a layoff. Firms should first consider reducing overtime, cutting salaries, and transferring workers to other divisions within the company before firing employees.
The KLI criticized the first round of financial sector restructuring that took place in the midst of Korea's financial crisis for being excessively focused on selling off assets and laying off workers while ignoring the problem of bad debts. The think tank says that the lopsided restructuring process inflicted a tremendous amount of social trouble by reducing employment security and increasing the number of temporary workers.
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