Employee Downsizing

Lessons from the 'Downsizing Best Practices' Companies Contd...

In many companies, consistent and committed leadership helped employees overcome organizational change caused by downsizing. HR managers in these companies participated actively in the overall downsizing exercise. They developed a employee plan for downsizing, which covered issues such as attrition management and workforce distribution in the organization.

The plan also included the identification of skills needed by employees to take new responsibilities and the development of training and reskilling programs for employees. Since it may be necessary to acquire other skills in the future, the plan also addressed the issue of recruitment planning. Communication was found to be a primary success factor of effective downsizing programs.

According to a survey conducted in major US companies, 79% of the respondents revealed that they mostly used letters and memorandums from senior managers to communicate information regarding restructuring or downsizing to employees. However, only 29% of the respondents agreed that this type of communication was effective. The survey report suggested that face-to-face communication (such as briefings by managers and small group meetings) was a more appropriate technique for dealing with a subject as traumatic (to employees) as downsizing.

According to best practice companies, employees expected senior leaders to communicate openly and honestly about the circumstances the company was facing (which led to downsizing). These companies also achieved a proper balance between formal and informal forms of communication.

A few common methods of communication adopted by these companies included small meetings, face to face interaction, one-on-one discussion, breakfast gatherings, all staff meetings, video conferencing and informal employee dialogue sessions, use of newsletters, videos, telephone hotlines, fax, memoranda, e-mail and bulletin boards; and brochures and guides to educate employees about the downsizing process, employee rights and tips for surviving the situation.

Many organizations encouraged employees to voice their ideas, concerns or suggestions regarding the downsizing process. According to many best practice organizations, employee inputs contributed considerably to the success of their downsizing activities as they frequently gave valuable ideas regarding the restructuring, increase in production, and assistance required by employees during downsizing. Advance planning for downsizing also contributed to the success of a downsizing exercise.

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Case Details

Case Code : HROB016
Themes: HR concepts and issues
Case Length : 09 Pages
Period : 1990-2001
Organization : Varied
Pub Date : 2001
Teaching Note : Available
Countries : USA, India, etc...
Industry : Varied

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