Why down-sizing is NOT an effective option!!

​Many a times, when it comes to cost-cutting, organizations think of cutting down on their workforce. Assuming you had optimally planned your workforce in the first place, then reducing the people count becomes extremely counter-productive.

Typical way senior leaders approach such layoffs is by asking their directors to re-structure their own group in a way, where they are able to let go of couple of their current staff members. Directors in turn look to their managers and supervisors to select people who should stay or go! Doing this in an unstructured way, not only DOES NOT save money for the organization, but in fact, over time, it will cost you a lot more in the longer run!! Because, this typical approach has several issues associated with it!!

Remember, you had hired your current staff for a reason. If you let go of a few people, then it burdens the remaining team- which is not a sustainable solution, since over time they are sure to feel stressed out and fatigued and will probably request special medical absence, which in turn will increase your benefit costs!!

Plus many a times, managers and supervisors choose people who they would like to stay within their team, this may/not be the most productive member. In such instances, the true and total cost of down-sizing (considering severance pay and other payments) is many a times even worse than continuing with the current staff size.

In addition, overwork and low morale leads to missed timelines and unsatisfied customers! The ‘fear’ of possible job loss along with the ensuing negative feedback and angry customers, further lowers employee morale and increases emotional fatigue- finally leading to totally disengaged employees and a toxic work environment.

They become a burden on the organization either ways- if they stay, it costs the organization in lost productivity (not to mention they take all their acquired knowledge and experience with them) and if they go, then the organization needs to hire new people and spend money as well as effort to train these new entrants. 

​So, before you consider re-structuring or down-sizing your Division, consider doing this instead…

About The Author:

Sandhya Bhat MSc, CSSMBB, CSSE has developed several new (under patent filing) and enhanced existing strategic methodologies to improve technology and human capital utilization, produce greater ROI on investments and streamline service delivery. She is an acclaimed author, speaker, a sought after thought leader and an avid world traveler.

​#workforceplanning #organizationaleffectiveness #organizationaldevelopment #humanresources #humancapitalmanagement #workforcedevelopment #laborrelations #downsizing #layoffs #workforce