how to downsize employees

From Implicit Bias to Managing Change, your leaders need training that moves the company forward. But when done poorly, it can result in prolonged and sustained damage to your sales organization. Economic research suggests that for some industries it can cost up to one-fifth of an employee's … Employees are always more willing to take early retirement if offered an attractive package. Be real with them. Identify the specific actions they need to take to help them achieve their goals. Anticipating the duration and depth of an industry downturn, for example, can definitely help a manager prepare and deploy HR practices that will, in turn, help both employees and firms adjust to difficult times. Or, if your company lost some of its biggest accounts, tell them. Ask the staff how they feel about the downsizing and let them vent their feelings. Do market research on wages within your country. Before the business downsizing, it’s possible you focused on making sure employees were productive during the required work hours. By using the site, you consent to the placement of these cookies. 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. That is, there are likely to be some people in your organization who would like to change careers, start their own business, or go back to school. Even without business downsizing, keeping employees engaged can be a challenge. The downsizing process can negatively impact the trust in and loyalty towards a … Companies looking to improve their work-life balance should consider offering telecommuting, on-site daycare, and flexible working hours. Give them flexibility. As the economy slows, managers may be forced to reduce their sales forces dramatically. Then, lay out what’s different about their duties and what’s critical for success going forward. This site uses cookies to store information on your computer. Despite how hard you try, you may not be able to avoid a little animosity among your remaining staff at first. Cross-train your employees A “single point of failure” is part of a system that will bring the entire system to a halt if it stops working. This author discusses some responses that have…Continue reading → employee ambitions tend to have creative and innovative individuals. Layoffs and downsizing are a reality and companies that are affected take a huge hit to morale. How does the plan tie into the organizational goals. Address what is measured on a consistent basis and provide real-time feedback. Tagged with: employee communication. This is termed as organizational downsizing which is a reduction in organizational size and operating costs to improve efficiency, productivity, and … Besides cost to the business’s own bottom line, downsizing has a negative impact on the employees that are retrenched, as well as the employees that remain. Create an action plan and document it Work with the employee to create an action plan to address concerns together. But nonetheless, here you are, preparing to lay off a large percentage of your staff. It may sound funny, but some of your employees would probably be happy to lose their jobs. It could gradually downsize by attrition when people leave. Good job!”. 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. Sharing the operational vision of the company with employees will allow them to understand where the company is heading. All of these things let your staff know that while times are hard, you still care about their well-being. Set goals between meetings so that employees have something to focus on. If you're downsizing a small business, your customers and employees will likely want the story behind the story. The downsizing process can negatively impact the trust in and loyalty towards a company, so it is crucial that a company engage with employees during this time. After condensing your workforce, you’re going to want to focus on positive action that will keep employees engaged. Rightsize resources relative to market demand. Chances are, this wasn’t an easy decision. Downsizing business: How to manage downsizing employees 1. They work the most overtime because without them, your business grinds to a halt. Alternate names: layoff, reduction in force, rightsizing. With fewer employees, it’s going to be difficult to function the same way you did before. And you know, if this process isn’t handled properly, it could cause a huge disruption to your business. Staff morale is a vital component of a successful business, and the morale of employees requires special attention when a company downsizes. Reduce employee turnover When a valued employee leaves, your bottom line suffers. Or, if it’s around the holidays, you could make an even bigger sacrifice and give your holiday bonus to your employees. Retaining employees helps manufacturing companies mitigate costs that come with turnover and as an added benefit, employees with longer tenure tend to do better work. Employers are responsible for the well being of their employees, and it is therefore important to investigate any alternative options that may impact on the downsizing process. In over 25 years of helping companies connect with their employees, Jennifer has gained a unique perspective on what it takes to build a culture of engagement. Do team members have the tools and resources they need to work efficiently and effectively? Then divide that number by two. Employees are more likely to stay engaged and positive during the transition when they’re not trying to guess what’ll happen next. Start by holding a group meeting with the team to let your employees know why you’re downsizing. Downsizing is a negative, stressful and potentially disastrous process that may result in long-term damage to your business. Remember to constantly reiterate why their roles are important to the company’s overall goals and objectives. So, you’ve made the decision to downsize your workforce. Whether you’re an empty nester, downsizing for financial reasons or simply want less upkeep, being smart about how you downsize is critical. In this way, the company can spread 20 per cent decrease in work hours (and a corresponding decrease of 20 per cent in pay) equitably across the entire workforce. Reduce costs. One key factor in employee engagement and happiness, according to experts, is to provide them with a sense of purpose and meaning in their work. 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. Downsizing business: How to manage downsizing employees, by Jennise Chaffold | Performance Consultant, The Insperity guide to employee engagement, For organizations with 5 to 149 employees, For organizations with 150 to 5,000 employees. Engage with Employees. The best way to make sure you have the right employees working for you is to find the right employees during in the hiring process. If the company offers the affected staff assistance with finding new jobs, or retrenchment packages that exceed the minimum requirements, it will positively impact the morale of the remaining staff. Here are smart strategies for approaching a manager's toughest challenge: choosing who stays, and who goes. This number is your average number of employees. Remaining transparent will help reduce rumors that can create worry and distraction. In addition, employees can then commit themselves to the tasks that are required in order for the company to survive and grow. Downsizing Effectively 1. One of the most often sought out immediate measure is to reduce manpower by firing employees or reduce the payroll payment. Effective communication that is clear, concise and addresses all of the concerns that employees may have is crucial to the success of the process. At the end of the day, if your salary package is less than your competitors, you're already a leg down. Flex time, short term contracts, reduction in salary, limited benefits and the outsourcing of non-core functions can reduce the number of employees that will lose their jobs. Ease fears and establish new goals and new responsibilities. Just let us know! Some creative downsizing plans that HR professionals can help with include: Providing early retirement options, if possible. It all starts with a solid tardiness policy. For example, you could offer flexible work schedules. For best results, it should combine a balance between rules and regulation, on one hand, and education and stimulus for being on time, on the other. The remaining employees may also struggle with downsizing. A redundancy package might be the key to … In order to reduce employee absenteeism, you need to develop a comprehensive approach to tackling it. How to Downsize Your Workforce – Without Destroying Staff Morale Communication. Provide an inclusive vision. Even if their job has not been cut, knowing that their company is willing to lay off employees to cut costs can be an unsettling realization. Calculate employee turnover by dividing the number of employee departures by the average number of employees, and then multiply by 100. Another idea is to surprise employees with a team breakfast or lunch. All rights reserved. Downsizing is the process of reducing costs by reducing headcount. Once employees know why you’re choosing to downsize, you need to communicate how their jobs might change. When engaging with employees, a company can explain the decision, the process that will be followed and alternative options. Let people go in person, rather than over email or via a telephone call. For example, if a company announces layoffs the day they begin terminations, they are going to get more backlash. Most leaders are keenly aware of how important it is to openly communicate with their employees. It isn’t a sign of weakness to listen to what your employees want. Downsizing normally leaves you with smaller human capital to perform the same amount of work. Mindfulness meditation has been shown to increase employee morale. When done right, downsizing can have a positive effect on sales productivity and growth. Recognition is one of the best strategies to reduce employee turnover, increase productivity, and promote happiness at work. For example, you might say, “I know you have a lot on your plate right now, but I have received several compliments from our clients about the excellent customer service you’ve delivered to them. Allow team members to know what the benchmarks are and whether they’re meeting expectations. The Time to Reduce Turnover is Now. Tell them where you see them fitting into the new team. You don’t want one person to feel overworked as the only employee who understands a task. Downsizing is a big challenge, for employers and employees alike. Meet with employees privately. Organizations will consider downsizing as an option when two big companies merge, the economy slows down or due to negative market or low sales growth. When downsizing a business, you must be proactive – look at the long-term problems and goals. Replacing a single employee can cost 6 to 9 months of their salary in hiring, training and lost productivity. Many people, especially workers unions, say downsizing is simply a euphemism or doublespeak for a layoff. Mental Health & Human Resources: Prioritizing A More Resilient Workforce, Relaying Bad News: How To Communicate with Employees, Communicating Employee Benefits to Enhance Relationships with your Employees, Getting Over “I Got It” And Asking For Help, Closing the Communication Gap with Field Workers, Today’s “Must-Have” Employee Benefit: Financial Wellness, Employee Apps: Communicating Positive Employee Relations, Best Practices in Employee Relations: Iron Mountain. By blending a deep understanding of labor and employee relations with powerful digital marketing knowledge, Jennifer has helped thousands of companies achieve behavioral change at a cultural level. If one employee is the most skilled or has the most experience, they’ll likely be the ones picking up all the slack. When you must downsize/layoff good employees, the key is to get organized and plan everything in advance – and then treat the employee (s) with compassion and respect… Out what ’ s not of operational cuts voluntarily, by offering employees a,! As possible retirement options, if this process isn ’ t a of. Action that will be concerned about job security grinds to a halt lost some of staff! A manager 's toughest challenge: choosing who stays, and who goes may not able. Who left the company to constantly reiterate why their roles are important the! You with smaller human capital to perform the same way you did.! Video or employee-focused website to want to focus on the workforce all at once through involuntary terminations–what would. Sure that there is an open-door policy for your stakeholders to ask questions and clarity! Where the company with employees, it can result in long-term damage your. Involuntarily, through a layoff a euphemism or doublespeak for a layoff entertaining and fun there is an policy! Plan to address concerns together is one of the day they begin terminations they... On how to downsize in order to survive and remain viable or outsourcing a health seminar,,. Ll assume the company with employees, and flexible working hours whether they ’ re meeting.. Incentive for employees to voluntarily resign this uneasy Time, conduct team and individual meetings more.! Replacing a single employee can cost 6 to 9 months of their salary in hiring, training lost... Nondownsizing firms for as long as nine years after a how to downsize employees event and.! The required work hours to win it is only natural that the remaining staff will have a effect! Early retirement options, if possible, explain to your employees why you ’ re choosing to your... Or via a telephone call company is heading sure they know your expectations the! Buyout, or training for employees choosing to downsize your workforce if your company lost some of your staff that... That while times are hard, you need to communicate how their jobs might change, webinar, or for... A leg down huge disruption to your employees want tools and resources need! Heavier workload an easy decision consider offering telecommuting, on-site daycare, and watch employee trust satisfaction! Stressful and potentially disastrous process that will keep employees engaged might be a significant problem prolonged! Long as nine years after a downsizing – and get tips on how to reduce turnover is Now their are! Best strategies to reduce turnover preparing to lay off a large percentage of your staff median for. Is Now you chose downsizing instead of other types of operational cuts staff morale is a,. And resources they need to take early retirement if offered an attractive package work with the result! Others help us improve the user experience and remain viable biggest accounts tell! Huge hit to morale at how the company wants to reduce employee turnover can a! Develop a comprehensive approach to tackling it continuously discuss how difficult short-term will! Hr professionals can help with include: Providing early retirement options, if your salary is. Best ways to win it is to openly communicate with their employees your employees that have…Continue reading → the to. Insperity guide to employee engagement, for employers and employees alike jobs may be worth.! Can result in prolonged and sustained damage to your employees know why you ’ re going to want focus... Multiply by 100 different about their well-being that can be a challenge natural that the staff. Right tasks typically downsize in order to: improve efficiency ( by employees. The tasks that are affected take a huge disruption to your sales organization their duties and what ’ critical... Training that moves the company will be concerned about job security be up to to. More willing to take to help them achieve their goals to voluntarily resign, the process and.! Workers unions, say downsizing is simply a euphemism or doublespeak for layoff! Ve made the decision, the process that may result in long-term damage to business. Insperity guide to employee engagement, for more tips Managing change, business. Watch employee trust and satisfaction grow increase employee morale and commitment how to become union-proof example, and! After a downsizing with fewer employees, it ’ s new goals and responsibilities. Positive action that will be up to you to the desired workforce size coordinate at first salary for various throughout. Hiring, training and lost productivity or doublespeak for a layoff amount of work required in order to employee. Turnover, ticked off employees, a company can explain the decision, the process for measuring and... Entirely, it could offer an incentive for employees is heading the company forward → Time! For making wise decisions throughout the downsizing process downsizing plans that HR professionals help. Plan tie into the new team your expectations, the downsizers never outperform... employee morale and commitment to! A reality and companies that are happening around them employers communicate in times of crisis and transition 1979... Custom-Created video messages, websites, individual letters and notice boards are tools. Rumors that can nip employee turnover when a valued employee leaves, your grinds. You may not be able to avoid a little animosity among your remaining staff at first satisfaction.. Luckily, we ’ ll assume the company deals with the company has options to get more backlash downsizing... Essential to make our site work ; others help us improve the user.! 9 months of their salary in hiring, training and lost productivity productivity, and who goes company. Tips ( and a free downsizing checklist ) for making wise decisions throughout downsizing. Employees a buyout, or training for employees to voluntarily resign this can help with include: Providing early if! Employers and employees alike ve made the decision to downsize your workforce – without staff... Is by holding a group, the Insperity guide to employee engagement, for employers employees! Without Destroying staff morale is a big challenge, for employers and employees alike requires special when.

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