Labor Hoarding

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Labor Hoarding

The practice in which a company does not lay off employees when it otherwise would (as during a recession). Labor hoarding is high risk as it reduces a company's profitability during a difficult time, but it guarantees employee talent will be available to that company (and, just as importantly, not to its competitors) when growth resumes.
References in periodicals archive ?
The study adds on to the existing literature on labour hoarding by estimating a dynamic labour demand equation for two industries -manufacturing and financial services in Malta.
Banks and life insurers said an increase in "non-productive" activities, such as regulatory compliance, was the most important explanation of this trend, whereas securities traders blamed "labour hoarding".
Productivity changes in response to a change in demand can be a residual, to the extent firms cannot or choose not to adjust total hours commensurate with changes in demand--perhaps reflecting labour hoarding. Productivity changes may also be intentional if, for example, competitive pressures create incentives to raise productivity and lower production costs.
At least UK unemployment - officially at least - hasn't gone as high as had been feared by some, owing to labour hoarding by firms, falling real wages and part-time working.
"This is often described in terms of labour hoarding, which implies an irrational response by employers.
Massive labour hoarding was achieved through adjustments both at the working hours and at the labour productivity margin.
The fall in sterling helped push up inflation, but "labour hoarding" also played a part.
"Employment in both rural and urban areas grew despite the contraction of output in 2009, reflecting large scale labour hoarding facilitated by nominal wage cuts.
Initially, most job losses affected workers on easy-to-terminate temporary contracts, while the government-sponsored reduced working time benefit scheme facilitated labour hoarding. As private sector vacancies fell sharply throughout the year, the labour market situation deteriorated.
"This labour hoarding means companies will be able to respond to increases in demand without hiring new employees.