Our recommended way for
downsizing easily for you and the employee
Downsizing is reducing your company’s workforce. The purpose
of downsizing is to make your business more profitable and more cost-effective.
Essentially you can use this important tool to change the course
of your business strategy.
For you to call an exercise 'downsizing', it usually involves laying
off three or more workers. Please don't use 'downsizing' as an excuse
for firing problem employees, or creating a culture change in the
organization by replacing old workers with new ones. These are different
circumstances usually involving problem employees. In these situations,
it is more efficient to counsel individual employees about their
expected standards of behavior, and how they have acted wrongly.
Remember people have their own personalities and it is usually better
to deal with them on a case-by-case basis.
On the other hand, employees that are 'downsized' lose their jobs
for reasons that are no fault of their own. Either the business environment
has changed or the company itself is undergoing financial stress.
Downsizing then becomes necessary to refocus the company on just
those core business areas making money.
The Immediate Effects of Downsizing
Here's something that all owners and managers need to know.
Downsizing will lower your productivity for a short while. Be aware
that this is normal. No matter how small the change, your employees
will feel insecure and often resentful. This is true even if they
were not the ones to lose their jobs. Likely, the individuals laid
off were friends with some of the remaining workers. Those left behind
may feel a sense of loss that will take focus away from their work.
However, the layoff will not affect everyone. As Dr Franco Gandolfini
notes, 60-70% of your employees will be indifferent, 10-15% will
be openly hostile or subtly try to sabotage the changes to show management
it has been ineffective. The other 10-15%, the leaders, will see
the benefits of the change, be positive about it, and try to make
it work.
If the layoff is handled appropriately by management, this period
of lower productivity will be brief. Although management should allow
employees time to grieve for their coworkers, they also need to refocus
the organization quickly on new goals and objectives. Once everyone
finally accepts the changes and starts to work within the new team
environment, you should see productivity higher than before the downsizing.
Usually this takes about two to three months.
Carrying Out Culture Change through Downsizing
What is the best way to affect your company’s culture by changing
its employees? First, consult with other relevant managers on who
you should fire and why. Also discuss whether you could restructure
some jobs. Remember your goal is to eliminate waste and refocus on
profit making business areas. Anything you can do to combine existing
job duties and increase efficiency must be considered. The ultimate
goal of downsizing is to ensure the company's survival. Only in this
way can you continue to employ those workers that remain with the
company.
Guide
to downsizing, termination and lay off |