In the wake of Circuit City dumping its most experienced and highest paid workers, other, better-managed companies are looking to hire. Most notably Aaron Rents, as BusinessWeek reports:
Just one day after the electronics chain Circuit City Stores announced that it would lay off 3,400 workers and replace them with lower-paid employees, Charles Loudermilk, chief executive of the rental retail company Aaron Rents began posting advertisements on recruiting Web sites: “Attention Circuit City employees: So they say you make too much and are laying you off to hire lower paid employees? Aaron’s doesn’t lay off our highly paid employees…. We put them on a pedestal, and show others how they can make more.”
It’s more than altruism. Loudermilk says that treating workers well in an industry as cutthroat as retail is good business, too. At a company like Aaron Rents, which sells electronics and furniture on a rent-to-own basis, happier workers mean lower turnover and more sales. Plus, it’s easier to attract new recruits—a key point for a company with plans to open 250 new stores this year. “Why [Circuit City] would let them go is beyond me,” says Loudermilk. “They spent many millions of dollars training these people, and we’re after them.”
It’s refreshing to read about companies like that, it makes me want those companies to succeed. (Although I have to admit, rent-to-own furniture always sounded like a fishy idea to me.)
Meanwhile, after announcing massive firings, you’d think Circuit City’s stock would have a gotten a bounce, at least temporarily. You’d be wrong; the stock’s gone nowhere.
And check out this bit, which I really hope was taken out of context:
While many human resource professionals were stunned by Circuit City’s bold announcement, on expert believes the company deserves praise for its candor.
“Circuit City has been very up front about the fact that this is a cost-cutting move in order align its costs more closely with industry averages,” said David Urban, professor of marketing at Virginia Commonwealth University in Richmond, where Circuit City is based. “Electronics retailing is a tough business, with a lot of pressure on profit margins. Therefore, the major players in that business have to seek efficiencies wherever they can.”
This guy’s a Professor of Marketing??? Surely he’d understand how much this layoff will screw up Circuit City. Doesn’t sound like “praise for candor” to me, or if it is, I sure as hell hope he’s not teaching any of my future clients about marketing.