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Labour hoarding

Is a term that describes the employment practice of firms keeping workers on the payroll despite an economy going into recession. The decision is made to keep these workers so that firms can quickly regain profitability when the economy recovers. The firm sacrifices profit during the period in which the economy is in recession, so that they can recoup the lost profits when recalling the workers. This is because the workers are already experienced in the environment of working in the company so they can move back into the company seamlessly. therefore, the firm avoids the costly training process of hiring new recruits. This is a strategy that is predominantly used with firms that provide jobs that require a lot of training for the workers.

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