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The Rueff Truth on ‘Abusive’ Employers and the Talent Flight Ahead

November 23, 2009
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Related Topics: Global Business Issues, Downsizing
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By and large, HR consulting firms have stepped lightly around the issue of how well their corporate clients have cut costs and employees during the past year. It’s rare to hear outright criticism that businesses botched the job.

But Rusty Rueff doesn’t mince words on the subject. Rueff, the former head of HR at video game giant Electronic Arts and now a board member of workplace feedback site Glassdoor.com, remains appalled that so many firms chopped workers between the Thanksgiving and Christmas holidays last year.

"You just don’t do that," he says.

What’s more, some companies made "cosmetic cuts" designed to please Wall Street with little sense of whether they were appropriate, Rueff says.

Rueff, who also served as CEO of digital music distributor Snocap and worked in HR at Frito-Lay, isn’t a stranger to layoffs. Nor is he opposed to them. But he thinks companies should try to do them once, and cut deeply enough so that no others are needed.

Last year, the initial cuts companies made often were 7 percent or less of the workforce, Rueff says. As a result, firms often required another round or more of layoffs later on, he says. In addition, some leaders have taken advantage of the fact that employees have had few job options during the downturn, Rueff argues.

At some firms, an "abusive" relationship has taken shape, Rueff argues, with employers the guilty party.

"They’ve been callous," he says. "They’ve been insensitive."

Rueff and I butted heads some when I reported about overtime concerns in the game industry several years ago. And I’m inclined to think many companies could have gotten through the recession with minimal or no layoffs, partly through furloughs and other methods to trim expenses.

But I appreciate Rueff’s refreshing candor on the question of job cuts. There’s a fair amount of evidence that employees, including top performers, have felt mistreated or let down by their employers over the past year.

A recent survey of 500 U.S. employees from consulting firms APCO Worldwide and Gagen MacDonald found that more than 80 percent of respondents say they are extremely loyal to their company and personally motivated to do all they can to help their companies succeed. But less than half of employees say they completely agree with the statements "My company is loyal to me" and "My company values its employees."

And many workers say they are ready to bolt. Sixty percent of employees intend to leave their firms as the economy improves next year, and an additional 27 percent are networking or have updated their résumés, according to a recent survey of 904 workers in North America by advisory firm Right Management.

Rueff likens the situation to how an abused spouse may stick with a partner as long as there is no financial alternative. The minute they see light at the end of the tunnel, they’re gone, Rueff says.

"We will definitely see people pick up and start to go," he says.

Recent Articles by Ed Frauenheim

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