|Senior editor-at-large Geoff Colvin here, filling in for Alyson.
After months of recession predictions, fear of layoffs among workers this year is growing. While the job market is still tight, it’s not as tight as it used to be, leaving employees more reluctant to quit their jobs as the Great Resignation becomes the Great Regret. With employment anxiety building, it’s remarkable and a bit comforting to find that one company has somehow avoided layoffs for at least 70 years. Its most recent layoff was so long ago that the date is lost to history. Lincoln Electric isn’t widely known because it doesn’t sell consumer products—its specialty is welding equipment and supplies—but in the world of management experts, it’s famous.
While the Lincoln Electric business philosophy consists of multiple interlocking parts (and there are some big caveats), at the highest level it’s built on two elements: trust between employer and employee, and a willingness to think long-term. Both are in diminishing supply these days, which is one factor among several that explain why other companies struggle to import the Lincoln model.
Lincoln’s executive offices in Euclid, Ohio, just northeast of Cleveland, are shipshape and functional but far from grandiose. That’s because workers get a substantial portion of their pay in a year-end bonus based in part on profits, and the company would rather see money go back to them instead of poured into office decor. Lincoln has long remained profitable through economic cycles, but lately the mood at HQ has been ebullient, with the stock recently reaching all-time highs.
Here’s how Lincoln avoids layoffs and achieves much more—plus a bonus! Look out for a link to the 1944 Fortune article that first revealed the extraordinarily iconoclastic and successful Lincoln system.