Downsizing in a company – how to approach it?

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Downsizing in a company – how to approach it?

Employers who plan to downsize their company must approach it accordingly. Without a doubt, this is not an easy task and carries certain consequences. However, it is important to take care of both those being laid off and the employees who will remain in the company.

Consequences of downsizing

Of course, restructuring in a company brings with it positive aspects, such as, first of all, savings associated with fewer employees. However, there is no denying that it also has negative consequences, and these can often drag on for months or even years. First of all, you need to be aware that once a specific number of employees have been laid off, the remaining employees may feel insecure, for which reason they will start looking for a new job on their own. After all, since the restructuring occurred the first time, it is not impossible that it will occur again. 

However, that’s not all, employees may lose motivation, and as a result, productivity in your company is likely to drop. In general, they will certainly feel anxious, staying in a company where the financial situation is not at its best may thwart their personal plans. That’s why it’s important for you as an employer to talk to each of your employees, which can reassure everyone. This can also be done for you by a manager who, instead of issuing orders, will begin to listen more to the needs of his charges.

Finally, it’s worth mentioning that restructuring will leave many of the remaining employees with more responsibilities, and as a result, they will quickly become discouraged from continuing to work for your company. So what can you do to make the consequences of downsizing as small as possible?

What to keep in mind as an employer

As an employer, when selecting a person for dismissal, you should pay attention to several very important factors. First of all, her seniority, but also her qualifications, and you can’t forget about the amount of salary, which can be crucial. Also important is the attitude to work, the skills acquired or the results achieved over the years or the last months. Of course, you must support each of your decisions with concrete arguments, otherwise the employee may report the case to the State Labor Inspectorate.

Do not forget to accurately calculate the cost of layoffs, it may turn out that the implementation of restructuring will involve numerous expenses. These will not only be severance payments, but also other long-term costs, and even legal services or amounts related to claims by employees against you. 

Another important consideration is a meticulous, thorough approach to all procedures so that you can avoid possible lawsuits for reinstatement or compensation payments. Ideally, you should decide to consult with experts on your decisions, as well as your company’s HR department, if there is one. Calculating the costs associated with restructuring will give you a broader view of whether downsizing is even worthwhile. Especially if you are facing future investments that can successfully improve the company’s finances. In the current economic situation of our country, it is very difficult to find a benchmark that would facilitate the whole endeavor.

main photo: Kotliarskyi

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