Business 'Labor Hoarding' Could Save You From Layoffs

‘Labor Hoarding’ Could Save You From Layoffs


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With the economy slowing, you would think there would be more layoffs. But that is not the case. Despite high-profile layoffs at companies such as Netflix, Snap and, the national average of layoffs is not much has changed in many months, according to the Bureau of Labor Statistics.

Economists cite a phenomenon called ‘labor hoarding’ as the reason.

Labor what? Most of us have heard of house hoarders, but how does one hoard, and why would you do it in the first place?

Labor hoarding describes companies that retain employees rather than let them go during an economic downturn.

Economists say labor hoarding is one of the reasons US unemployment has fallen for the fifth week in a row. It also explains why employers find it so difficult to find and hire new talent. They are being chased away for a better day.

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Related: These 3 Reports Will Tell Us A Lot About Today’s Economy

An economic decision

To be clear, the reason companies hoard employees in bad times isn’t because of the goodness of their hearts. These companies are realizing that it is more expensive to hire and train new employees when the economy picks up than just keeping the current workforce.

“At least some employers who are seeing things slowly at the moment remember how difficult it has been to recruit talent over the past two years and would rather just keep employees, even if it comes at a cost,” writes former Axios reporter Sam Ro in his newsletter TKer.

But despite the negative connotation of the word “hoarding,” some analysts say it’s ultimately a good thing.

“Labor hoarding will be a key driver in reversing the recession,” said Andrew Duffy, CEO and co-founder of Spark plug, a management platform for frontline employees. “By keeping employees on payroll, companies are doing their part to maintain income levels, which ultimately translates into more spending by consumers who are still employed, meaning more revenue for businesses.”

Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.


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