At the employee level, research is carried out from a psychological and behavioral viewpoint with a focus on the survivors (employees who remain in the organization after downsizing), victims (employees who are asked to leave) and implementers (managers involved in implementing downsizing, including asking employees to leave). What Should You Expect in HR Trends for 2021? Make sure those who are tasked with the actual layoff notifications are well-trained on delivering the message in a professional and sympathetic way. Live. Fill out the form and one of our representatives will contact you within one business day. Therefore, when employees are laid off during the downsizing process, the company loses more than just a warm body; they lose the employee’s knowledge, experience, and expertise. When downsizing a business, you must be proactive – look at the long-term problems and goals. These changes can be difficult for employees to accept. It might be a little difficult to coordinate at first, but the boost it will give employee morale may be worth it. Good job!”. If the organization has been preceding its core values and mission, downsizing gives it an opportunity of re-evaluating its priorities. Start by holding a group meeting with the team to let your employees know why you’re downsizing. Another idea is to surprise employees with a team breakfast or lunch. Because of this, we offer these four critical steps when downsizing: It’s impossible to have a smooth downsizing process if your whole plan is to simply see how it goes. 2) Responsiveness and improved employee motivation A change in the culture of employees in a positive manner is among the significant advantages of downsizing organizations experience. Set goals between meetings so that employees have something to focus on. Ease fears and establish new goals and new responsibilities. Despite how hard you try, you may not be able to avoid a little animosity among your remaining staff at first. Steps to be taken to help displaced/redundant employees (i.e., provision of outplacement services), iii. For example, if you’ve decided to downsize because the company didn’t meet its revenue goals three quarters in a row, tell them. HR can also help develop communication strategies for managers and leadership, and they can help oversee the entire workforce-reduction process—from putting together severance packages to defining health benefits to transferring of retirement assets. Before the business downsizing, it’s possible you focused on making sure employees were productive during the required work hours. An important task while planning for any downsizing is to carefully analyze your talent pool. While many companies are aware of the legal requirements that come with downsizing, not enough employers understand the ramifications that a poor layoff process can have on their companies. For organizations in the process of developing a "feeder pool" of high-potential women and people of color for advancement, layoffs can be especially difficult. Most good employees will be understandably upset when you give them the news of their termination due to downsizing/layoffs. How to Prepare for Organizational Downsizing. Select Employees for Layoff. Be real with them. The transition process needs to be thought out beforehand, keeping the focus on company goals and objectives. Here are some questions you should ask yourself as a leader: When possible, cross-train people so that certain tasks and functions aren’t disregarded when the employees who are responsible for them are let go. Once employees know why you’re choosing to downsize, you need to communicate how their jobs might change. According to Karake-Shalhoub and Karake (1999), downsizing is the act of reducing an organization’s total size of human labor with the intention of maintaining a smaller number of employees and streamlining the organization. This site uses cookies to store information on your computer. Effective ways to communicate your downsizing information include: Set up a website employees can easily access for up-to-date information. You don’t want one person to feel overworked as the only employee who understands a task. •. Downsizing impacts people in various stages of the employee lifecycle, which is why solid HR support is so important. Businesses can go about downsizing in different ways. The plan should include: your goals and objectives; … Do team members have the tools and resources they need to work efficiently and effectively? Consider how to help remaining employees impacted by the downsizing acclimate new roles and functions as the organization moves forward. Downsizing may be done either voluntarily or involuntarily (Karake-Shalhoub & Karake, 1999). Whatever be the strategy of dealing with the problem of surplus staff, the organization must make its downsizing plan known to the employees. Once you’ve identified the strategies you’d like to implement in your company's downsizing efforts, and considered how they might impact all stakeholders, it’s time to create a transition plan. Employees are more likely to stay engaged and positive during the transition when they’re not trying to guess what’ll happen next. And if possible, explain to your employees why you chose downsizing instead of other types of operational cuts. This needs to be communicated in a humane manner, with a focus on what the company is doing to ensure a successful transition, and without emphasizing the numbers. They may need to take on other roles and responsibilities in order to keep the organization functioning effectively despite fewer staff members. Transitioning From Furloughs to Layoffs: Is Your Business Prepared for This? Employees are required to do more, with less. Downsizing inevitably involves making redundancies, with occur when an employer is ceasing to carry on with work for which the employee was employed, or is ceasing to carry on with work in the place where the employee is employed. Remember that the manner in which departing employees are informed about a layoff will have an impact on the morale of the employees that remain, as well as those who are let go. Who is to be made redundant and when, ii. Increase profits by reducing overhead costs. So be respectful to everyone involved. It’s normal for staff to feel fearful and unclear of the direction of the organization after a downsizing. By Maureen Giovannini | Maureen Giovannini. Downsizing can also harm an organization’s culture in a number of ways. All rights reserved. This will give the organization a well-trained staff to keep the organization moving forward. Remember to constantly reiterate why their roles are important to the company’s overall goals and objectives. Downsizing for an employer refers to a lowering of the number of employees, typically because of a reduction in profits or a reorganisation. arid communicate clearly how downsizing relates to it. Chances are, this wasn’t an easy decision. Check out our magazine, The Insperity guide to employee engagement, for more tips. All Rights Reserved. Employee Involvement:Quality Circles, Total Quality Management Allow team members to know what the benchmarks are and whether they’re meeting expectations. Downsizing or layoffs is the term used to refer to the practice of firing employees for various reasons in organizations. Reducing the number of employees without considering the rest of the organization only puts the old problems on the shoulders of fewer people. Learn how Insperity can help your business, Discover how we can improve your business, When you are ready to subscribe click here, The Insperity Guide to Employee Engagement, Issue 1. downsizing or organizational change. They seek to inform members that. Thus, communication is critical not You just have to get creative, such as allowing employees to alternate their work hours so that everyone can take longer lunches or arrive an hour later. Changing patterns in reasons cited for job loss support this impression of the rising importance of restructurings. Then just last month, the company announced it was laying off 3,500 additional employees (about 14% of its workforce) due to the COVID-19 pandemic. Tip #7: Listen. Rightsize resources relative to market demand. In addition, downsizing companies typically do not hire new employees, which means there will be a … For example, you could offer flexible work schedules. 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