By Cara Whedbee, Ph.D. | HRTools.com Business Writer
They say the definition of insanity is doing the same thing and expecting different results. If that is the case, are there viable alternatives to downsizing that could save the sanity of both employers and employees alike? Several Human Resource Specialists have made the case for such alternatives, so what are they?
Is Downsizing Worth the Risk?
According to a Senior Human Resources Specialist, Rick Gibbs, who wrote an article for Real Estate Weekly entitled, “Navigating your biz through a tough holiday season,” downsizing may not be worth the risk to your business:
“Owners and managers should realize that layoffs are not necessarily the first or the best way to help a company. In fact, letting an employee go can damage the productivity of those who remain. Once someone is laid off, everyone wonders about his or her own job security. Other employees will constantly worry about whether they are next, and morale can diminish drastically. In addition, the talent of the employees laid off now could be hard to find when business improves. It’s critical that the business consider other cost savings measures before resorting to layoffs.”
While downsizing could damage the productivity and morale of the surviving employees, Gibbs suggests what an employer might try first to possibly forego such damage, “Tapping into the workforce’s brainpower and commitment can not only help to weather the storm, it can also provide competitive improvements/advantages that the business might not have imagined.”
What Questions Should Be Asked Before a Layoff is Considered?
Senior Human Resources Specialist, Margie McGovern, offers a list of questions every employer should ask themselves before they consider a layoff to help determine whether or not it is worth the risk. The questions in this list can also lead employers to think about the alternatives they might have to a layoff:
- “What is the purpose of the layoff? There may be several reasons, such as cost, reorganization, realignment of functions, improved productivity, etc.
- Have the desired outcomes been clearly defined?
- Have possible repercussions of the layoff (e.g. vendors, clients and the public) been considered and appropriate plans been developed?
- Has the employer talked with their Human Resources advisors to be sure the company leadership has considered all the aspects/best approaches to the layoff, for example:
- Minimizing risk and potential liability
- Rationale
- Timing (All at once or in stages; timing in relation to customer needs/productivity)
- Maintaining safety and security during the layoff
- Determining if external communication will be needed to maintain relationships and company reputation after the layoff (e.g. company’s clients, vendors, local community, etc.)
- Communicating with those to be impacted
- Retaining the “survivors” (e.g. Upon completion of this layoff, will the employer be in a position to reassure survivors regarding their own future job security? If not, has the company leadership discussed this with their HR team?)
- Maintaining productivity
- Management practices after the layoff
- Maintaining morale and culture in the aftermath
- Are there any opportunities for immediate job promotions, merging of functions or realignment that would further the company’s long term needs or objectives? If so, could these plans be combined to reduce the negativity of the layoff?”
Possible Alternatives to Downsizing Can Be Found by Talking with Employees
McGovern, in addition to the questions suggested above, also points out that, “If the purpose of the layoff is to reduce costs, have all other options been considered? Have employees been offered the opportunity to:
- Reduce hours as individuals
- Reduce hours or rotate “days off” as a group or department
- Reduce pay grade
- Take on more work/multiple functions, i.e. “wear more hats”
- Take a temporary Leave of Absence, or “furlough” (Some plans allow employees to continue insurance coverage for all or part of a temporary LOA.)
- Take a voluntary (permanent) layoff
- Save money in another creative way that the business has not yet considered?”
Regardless of what solutions a business considers as alternatives to downsizing, the point is that all options be considered. Such thoughtfulness just might help a business avoid the possible damages of downsizing to the company, its employees and its future success.
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