Business Planning and Downsizing Advice

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Struggling with Downsizing? Top Shelf Ideas that affect the Bottom Line

The impact of the economy has been intense and many businesses are in the midst of the devastation of down-sizing. Whether the cause was a reduction in demand, lack of revenue, or planning mishaps, the result is the same - layoffs are needed. This unfortunate news is often coupled with challenges in planning, for as most business leaders are focused on managing growth, few are skilled in dealing with a workforce contraction. There are many things to keep in mind when addressing cutbacks in personnel. One of the most important is that a business' ability to survive a downturn and later thrive in any forthcoming growth cycle is reliant upon making the right staffing decisions now.

Know What You Need

Often times, decisions about layoffs are made without sufficient regard and planning for future growth. Businesses that thrive when the economy improves do so by preparing themselves early on. Look at the current need for staff reductions and demand for work output. Will fewer people be conducting the same amount of work? Will staff be expected to fulfill additional or new duties than before? Likewise, consider how the situation will look like if things get worse. Will you still have enough of the "right" people available to pick up the slack? Finally, bear in mind that the staff you select now will be integral to the business' core as you prepare for later growth. Are you selecting the best and the brightest to be that core team?

Keep a Professional Perspective

One of the first and most important things to do is to plan who will be let go. This challenging and unfortunate task should not be made lightly using a simple equation of last hired, first fired. While it is important for staff morale to demonstrate that you value loyalty, following this concept will most likely leave you unprepared. Loyalty often works hand in hand with complacency. Frequently these staffers remain employed because they don't like change and don't make waves. While most employers have a strong number of such employees on staff, these personnel are rarely the standouts as hardest workers, visionaries, idealists, or constructionists - all staff that you will now need to get you through this turbulent time. Similarly, some long-standing workers have acquired a sense of entitlement and may be unwilling to work harder or take on more tasks - issues that will certainly undermine an already shattered workforce.

Stop Making It Personal

In reviewing your staff and determining who will be laid off, use a two columned approach. What does each person bring on a personal level, and what do they bring on a professional level? Keeping separate columns allows you to recognize all the positive and negative elements of the staff person without co-mingling the relative value of each set of skills. Perhaps Mary is warm, caring, and a 10-year veteran on the job - all very positive qualities. But professionally she doesn't meet deadlines, often comes to work late, and has never contributed with new ideas. Compare Mary to Jonas who has been at the company 1� years. Though he gets along reasonably well with others, personally Jonas is a bit of an odd-ball. Professionally however he shows a lot of promise. He's made two useful suggestions which helped the department, and is always eager for a new challenge. Given these details, an outsider can easily see that Jonas is better suited to help the company through this turbulent time, however emotions and personal connections often make this type of decision incredibly challenging.

Handling the Fall-Out

Making tough decisions is hard, but it's only the first step in this battle. Next, and often much harder, is managing the staff that remains. While business owners and executives have the task of making tough decisions on who to keep and who to let go, it's also the employees who live with these decisions. Staff may feel angry, resentful, and sad as they take on more work without their favorite colleagues. They will likely experience fear and stress at both the increased workload and status of the economy. Some may want to quit in solidarity or otherwise undermine your efforts to create a stable workforce. Helping staff through these troubling times is crucial to the success of your business and will require honesty, communication, and strong leadership.

This article represents part 1 in a series regarding down-sizing and layoffs. Future articles, will be available on our website and blog.