The 30% Rule That Predicts Your Next Layoff

Labor cost over operating profit is the number that predicts a layoff. Jessica Hart, a fractional HR consultant in California, tells clients that above 30 percent, a contraction is coming whether or not anyone has announced it. She has run the people side of a Heineken acquisition, a COVID furlough, and an asset sale.

In this episode:

• The ratio Jessica checks first with every client, and who makes the decision when you don't

• The grid she draws before any org conversation, and why the names come out of the boxes

• Why every company on the calendar cuts its travel budget in July, traced quarter by quarter

• The bike and the kickstand: which functions have to sit inside the company and which don't

• The Halloween costume a former employee suggested for her, and the case for outsourcing the reduction

• One day during COVID furloughing more than 40 people in California while Florida ran a mass hiring event

• What every employee should get on day one after you acquire their company, down to the benefits waiting period

• Why a text sent from a personal phone still shows up in court

For HR leaders at PE-backed and mid-market companies who would rather see the contraction coming than be handed it.

Episode Chapters:

• 00:00 | A 55-person company on its way to $200 million
• 05:12 | Meet Jessica Hart: Lagunitas, Heineken, and an MBA at twenty three
• 07:36 | Org design when the market is contracting
• 09:10 | Draw the grid, then take the names out of the boxes
• 10:17 | The 30% rule: labor cost over operating profit
• 11:53 | Total comp and the workers comp number nobody budgets
• 12:25 | Adding value without adding dollars
• 15:19 | Why every company cuts travel in July
• 18:52 | Core versus support, and the bike metaphor
• 22:21 | The grim reaper problem
• 27:25 | Furloughing California while Florida mass hires
• 30:10 | The employees who did not know they were for sale
• 31:49 | Day one after an acquisition
• 36:11 | Your proof is a handbook, a practice, or a text message

Connect with Jessica at: https://jessicahartconsulting.com/

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Music licensed through Soundstripe.

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