In economics, what is Labour Hoarding?

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  • This refers to an economic phenomenon wherein a business chooses to retain its employees, rather than laying them off, during an economic downturn or recession.
  • A company may choose to retain workers on its payroll even though it is not making as much profits as before.
  • Labour hoarding has been attributed to various reasons, including the fact that a business may find it difficult to hire workers again when economic conditions change for the better.
  • Legal complications and emotional hardship involved in firing employees may also explain the prevalence of labour hoarding in the modern economy.

Source:TH