Full Answer
The PRIMARY REASON organizations engage in downsizing is to promote future competitiveness. According to surveys, they do this by meeting FOUR objectives:
Organizations should carry out human resource planning so as to meet business objectives and gain an advantage over competitors.
Popular with employers because it gives them fl exibility they need to operate efficiently when demand for their products changes rapidly.
NEGATIVE EFFECT of downsizing was especially high among firms that engaged in high-involvement work practices, such as the use of teams and performance-related pay incentives. As a result, the more a company tries to compete through its human resources, the more layoffs
The PURPOSE of setting specific numerical goals is to focus attention on the problem and provide a basis for measuring the organization's success in addressing labor shortages and surpluses.
Changes may include downsizing, training existing employees in new skills, or hiring new employees.
Determining expected shortages and surpluses allows the organization to plan how to address these challenges.
The aim of downsizing is to restructure an organization in order to make it more competitive. It is a natural progression in terms of the development of an organization.
It is important to look at the consequences of downsizing and ensure that the value created from trying to make the business more streamlined outweighs the potential damage to the reputation of the company and decline in employee morale. There are costs associated with the process.
Outplacement refers to a downsizing company’s efforts to help former employees transition to new jobs. Some consultancy firms provide outplacement services, which are paid for by the former employer. The aim of the outplacement professional is to provide advice and psychological support. The service includes:
Rightsize resources relative to market demand. Take advantage of cost synergies after a merger. Increase profits by reducing overhead costs. Respond to a decline in demand for the company’s products or services. Businesses can go about downsizing in different ways.
The aim of the outplacement professional is to provide advice and psychological support. The service includes: career guidance, resume writing, career evaluation, interview preparation, job search skills, and. how to target the job market.
Unfortunately, for some of the workforce, the most common way to downsize is to terminate the employment of a chunk of workers. Those in charge of downsizing will target staff and departments that are seen as ‘redundant’ (surplus to requirements) or loss-makers.
Reasons why companies downsize. In business, downsizing refers to reducing operating costs – making a company leaner – often described as ‘trimming the fat’. This involves reducing the size of the workforce, plant closures, and making the firm’s departments more productive and efficient.
Downsizing refers to a process where a company or a firm simply reduces its workforce in order to cut the operating costs and improve efficiency. It has become a legitimate option for business growth strategies, especially after the 1980s. It is in fact, the most preferred option of companies to sustain operating costs and comply with the existing scope of the business. It is an important management venture, and requires large assistance from the human resource management team. Let’s have a look at all the reasons that may compel an organization to resort to downsizing.
In a period of high growth, a company hires excess staff to meet the needs of a growing business. However, in times of recession, the business opportunities dwindle, leading to the need for downsizing of the surplus staff that was hired.
The same work is done by two different staff members. Usually, in such a case, the company cuts staff to eliminate redundancy in work . It is characterized by some employees leaving an organization voluntarily, or by layoffs, especially in case of higher management positions.
Automation. If an organization work process is extremely fast and easily meets the requirements of the market, it may downsize some of its workforce. Similarly, if manual work can be done by a machine in a much better and cost-efficient way, that also results in the reduction in the number of employees.
If one organization purchases another, there is a definite change in the management, and the staff of the acquired company has to face the prospect of unemployment. The reason for this is the same as the earlier case, viz, to cut costs and increase revenue.
Downsizing is a rampant practice prevalent these days. Efficient management of the existing skill set and constantly acquiring new skills and education is a sure way to beat the effects of downsizing.
A change in the top brass of a company can also result in downsizing. The working methods and procedures vary with different management teams. Therefore, a significant change in the management may drastically affect the employee size, to suit a particular style of working.
The PRIMARY REASON organizations engage in downsizing is to promote future competitiveness. According to surveys, they do this by meeting FOUR objectives:
Organizations should carry out human resource planning so as to meet business objectives and gain an advantage over competitors.
Popular with employers because it gives them fl exibility they need to operate efficiently when demand for their products changes rapidly.
NEGATIVE EFFECT of downsizing was especially high among firms that engaged in high-involvement work practices, such as the use of teams and performance-related pay incentives. As a result, the more a company tries to compete through its human resources, the more layoffs
The PURPOSE of setting specific numerical goals is to focus attention on the problem and provide a basis for measuring the organization's success in addressing labor shortages and surpluses.
Changes may include downsizing, training existing employees in new skills, or hiring new employees.
Determining expected shortages and surpluses allows the organization to plan how to address these challenges.