Corporate downsizing results from both poor economic conditions and company decisions to eliminate jobs in order to cut costs and maintain or achieve specific levels of profitability. These massive layoffs are, however, just one part of the story. Downsizing: One of the reasons that cause a complete turn around of the organization is downsizing the whole company where there is a reduction in the number of employees and therefore repositioning of work, systems and productivity numbers and sales are needed. In other cases, restructuring may involve the reassignment or alteration of duties within the organization to improve performance or incorporate new technologies. On several occasions, we have laid several people off at the same time most was 12 in one go, a regional office closing, more commonly 2-3 , it has indeed been for economic reasons that is to say, I, and my management team believe that if we retain all employees, the company might run out of money and go out of business.
Outplacement programs may be directed to other parts of an agency, other Federal agencies, or to the public and private sector. This normally is combined with a hiring freeze of impacted positions. Downsizing and reengineering programs may result from the implementation of new, labor-saving technology. As a business owner who is largely in-absentia, I'm very mindful of not taking on extra duties myself, and will retain staff so I do not have to return tot he business' day-to-day operations. In contrast, announcements of downsizing are well received in the stock markets. Temporary help services: Used to meet manpower needs during periods of peak workload. Underneath this dissatisfaction lie questions around knowing what job opportunities are available to them; understanding the requirements for career advancement into these potential opportunities; knowing how to effectively present themselves as viable candidates; and knowing what resources — training, tuition assistance, development opportunities, etc.
In other words, managers must strive to maintain or increase productivity and quality levels despite having a smaller workforce. Furthermore, a small business that decreases its workforce too dramatically may spend more in overtime pay for the remaining workers than it saved through downsizing. Employees who are laid off tend to suffer from depression, anxiety, insomnia, high blood pressure, marital discord, and a host of other problems. More Control One way to restructure an organization is to create departments to handle tasks you previously outsourced. Your managers all know who these people are, even outside of the formal succession planning process. To remedy these problems, U. Here are the 4 types of corporate restructuring — 1.
Joint Ventures: As suggested by the title, this step involves an understanding between two or more enterprises to take on market ventures together for better results and economic profits. Additionally, I offer verbal references and other assistance to the well-performing employees. Reduce overtime expenditures: Allow compensatory time off in lieu of overtime payment or place severe restraints on the use of overtime. A trend toward outsourcing jobs overseas to countries with lower labor costs is a form of downsizing that affects some U. Another issue the company may have to deal with when they are laying off personnel is the morale of the individuals who are still. Downsizing has repercussions that extend beyond the companies and their employees.
Voluntary reassignment: Reassignment out of the impacted area to another part of the organization or agency. Hence, these efforts frequently have mixed results. In essence, they downsized because they lacked new products that would have stimulated growth and because their existing product markets were decreasing. Retraining generally focuses on competencies needed in a new or redesigned job. Agencies must have Congressional authority to offer this incentive. This is a strategy that involves evaluating the types of work or systems and processes and if they are actually important and needed; which ones can and should be eliminated.
Increased Administration Work As you restructure, you might find you have more administrative work, especially if you hire more employees. This solution helps reduce the amount of layoffs the company has to deal with. Many cases of restructuring involve downsizing. If a company's restructuring involves new technology or changes in employee responsibilities, productivity may suffer while employees learn their new roles. This leads to a more focused attention on customer engagement when there is a downfall in the profits of a company and hence leading to more profits. In other words, despite the admitted discomfort and difficulties that downsizing has on displaced workers, some workers are able to locate new jobs and companies are able to achieve greater efficiency, competitiveness, and profitability.
These employees may be given an immediate annuity if they meet early retirement eligibility i. Voluntary leave without pay: A request initiated by the employee for time off from work without pay. Should result in the formation of small, semi- autonomous organizations within the broader organization 6. Management directed reassignment: Reassignment initiated by management to a vacant position in another part of the organization or agency. This is always the most difficult, cutting employees who are excellent in every way.
Separate temporary employees and re-employed annuitants: Both groups of employees may be separated at the will of the appointing official. Usually has a huge to very little effect on the market, mergers are a good strategy in getting the competition working together and thus ensuring a successful joint in profits and success. Here is a breakdown of the most common differences between the two — 1. These programs provide avenues for employees with surplus or obsolete skills to make positive career transitions. Furloughs of less time fall under adverse action procedures part 752. Retraining: Training employees for skills in non-impacted positions i.
The employee may decline the offer and later compete under reduction in force procedures if they are invoked. Involuntary reduction of hours worked: Management initiated reduction in the number of hours part-time and intermittent employees work. If you add sales and marketing staff, their efforts should lead to more sales and revenues that directly pay for their costs. Although critics of downsizing do not rule out the benefits in all cases, they contend that downsizing is over-applied and often used as a quick fix without sufficient planning to bring about long-term benefits. Regardless of whether downsizing is good or bad for the national economy, companies continue to downsize and the trend shows few signs of slowing down.