Downsizing
...ain after the reduction; survivors may feel guilt over keeping their jobs when their friends have been laid off. Generally, these employees become narrow-minded, self-absorbed, and risk-averse (Noe 187). Exposure to Downsizing There is always room for resizing in a workplace that grows very quickly. This doesn't necessarily mean that employees will lose their jobs, but they would be wise to prepare for the worst possible scenario. A company cannot carry on constant growth without proper management. What this means is that at some point, companies must take time out of their hectic schedules and start crossing out names of employees they can do without. Despite the fact that you may be an excellent employee, there is never a guarantee that you can make it past the downsizing of many companies. You may not lose your job, but you may become responsible for double your original tasks (Gomez). Positive side of Downsizing The reorganization of a company's employee layout does not simply involve firing employees; it also denotes opportunities that can benefit workers with increased responsibility, salary and prospects for future advancement. A re-evaluation of the company's assets and expenses does not mean that the company is heading for disaster; in fact, it can signify quite the opposite, usually indicating that the corporation has reached a level of maturity that requires some serious decision-making, so that its board of directors and shareholders will remain pleased. Ways to prepare in the event of Downsizing There is no foolproof way to protect yourself from such forthcoming incidences such downsizing, but certainly, there are several ways to prepare yourself by putting all the odds on your side. The key is to market yourself, in other words, make yourself a valuable asset that the company will “need” in order to function successfully (Gomez). A good approach that employees should consider is to get involved in the company’s mission and vision goals, be versatile, take initiative and show interest in the success of the company along with what it does. An employee should be proud of what he does for an average of forty hours per week. If the resizing has already occurred or is in the midst of occurring, stay calmed and focused, by concentrating on your career; this way, there will be better chances that your superior will relocate you or offer you a different position if you discuss your situation with him or her. Look on the bright side, losing your job does not mean the end of the world, as it can open doors to better opportunities that might have been left untapped if never given the challenge. Now is the time to look into all those dream jobs that you once yearned for and expand your horizons (Gomez). “It has disrupted the lives of chemists and changed the face of employment, but it often can lead to new opportunities,” says Elizabeth Kirschner, writer for C&EN Northeast News Bureau for the Chemical and Engineering in her article about downsizing within (Kirschner). Another advice is to start a personal financial budget, a savings program or investment or retirement plans to prevent further stressful events if ever involved in such a situation. Savings will make your life a whole lot easier if you suddenly find yourself jobless and offset the time while you are planning your future career moves (Gomez). Alternatives to Downsizing Although downsizing is an alternative to reduce costs, there are many alternatives that can help an organization cut cost while ensuring the commitment of valued employees. The organizations should explore such alternatives, in an effort to avoid the negatives outcomes of downsizing. Several companies opted to use as an alternative to downsizing an implementation called “Timesizing.” This new term emphasizes the cutting of working hours instead of jobs altogether, and thus, keep the most possible people employed with relatively less hours per person (Hyde). The following alternatives describe in some detail options available in an effort to avoid downsizing, but these are not limited to, or apply to all business types. Each organization should examine its own priorities, goals and necessities for their business, along with an effort to implement ways and methods to attain them. Five of the following alternatives address long-term staffing needs, and the rest provide short-term cost reduction. These alternatives rest on two important pillars: First, no one is immune from the strategies for saving money. And second, the Human Resources Department must be proactive in developing career assessment, training and placement opportunities, along with a creative wage and benefit packages to retain top talent (Maurer, 1) One of the first alternatives is Hiring Linked to Vision; this option encourages the organization to identify what skills will be needed in order to meet its vision and goals. During job interviews, human resources and department managers need to ask questions specifically related to skills the organization will need now as well as in the future. This way the organization is ensuring employee development and his positive impact within the company. The second alternative is Cross Training, by understanding the skill mix of staff today and linking it to the skills needed in the future, the organization allows individual employees to determine what they need to do in order to remain employed. The third alternative is Succession Planning, which states that Human Resources should work with line managers to identify likely candidates so that they can begin preparing them for positions once they become vacant. This concept is related to employee career planning. Fourth alternative is Redeployment within the Organization; this requires a well developed career management process so that managers and employees are aware of open positions, and career assessment and development activities that allow people to get ready for positions. A fifth option is Creating Value-Added and Revenue-Enhancing Opportunities, in other words, is an “Employee Buy Out” within the organization. A group of employees create a new business or line of service that the company can market. For instance, when Ford was about to sell the name “Mustang” to a foreign company, some engineers volunteer to improve the Ford version of the car. They met high quality standards and developed a competitive manufacturing time. This is a good example showing that when the organization invests in training and development of its staff, it is a very good chance to obtain positive outcomes (Maurer, 2). Alternative number six is to adopt A Comprehensive Model. Some corporations in Japan have adopted a series of steps they use as an alternative to downsizing. If the first step does not get the needed savings, they move to the next. The first step is setting 50% of compensation; the rest is determined by profit or productivity measures. A second option to the precedent method is cutting the number of hours. Third, cut salaries. And the final step is making arrangements with other employers who will agree to take displaced workers (Maurer, 2) Alternative number seven is Reduced Hours. This works establishing a policy that either places everyone in a particular job category on a flexible working arrangement or creates a flexpool made up of volunteers from the department. This works by dividing a job between two people, with each person receiving proportionate benefits. Option number eight is to Lower Wages. This is a temporary program instituted to get through a downturn or until other reductions can take place. The wage reduction program must include everyone in the corporation. Executive compensation is reduced by the highest percentage, followed by middle management, with non-management staff suffering the smallest percentage of loss. Alternative number nine, Attrition, has to do with waiting for people to retire or leave on their own, and the positions are not filled as people leave; or it can also be done by offering voluntary early retirement to people within a particular position or years of service. Tenth option is Alternative Placement; this alternative offers early retirement incentives to pension-eligible employees in a specific area. The organization also can make arrangements with similar institutions or suppliers for placement. Alternative number eleven is Leave of Absence. This works by offering people a leave of absence with full benefits for a specified period of time to help an organization recover from a downturn. Then, people are promised a job upon completion of the leave. Some companies have allowed employees to buy the operation that was slated for closing and set up their own business, this option is called Employee Buy-Outs. Finally, Shared Ownership is an alternative to trade pay increases or pay cuts in return for company stock (Maurer, 3) Challenges face by Employers Always keep in mind that no one is indispensable. Those who think they are invincible are people who thought that they would never have to find another job and leave a stable and profitable market capital company for a small-time production line affair. Because our economic, technological, legal environment is constantly changing, one must always be prepared for these changes and act accordingly as downsizing can happen to the best of us. Even successful companies downsize. Every day the word reverberates through the boardrooms and employee lounges of corporate America. Scan the business headlines or watch the nightly news and you're likely to see that IBM, Northrop, General Motors, McDonnell Douglas or Sears has just announced yet another round of layoffs. These days, companies large and small are scrambling to adapt to a radically changing set of conditions. This doesn't include just those companies in financial straits. Even successful, healthy companies are finding that they have to trim their work forces. "The upheaval and carnage throughout the land is overwhelming," says William P. MacKinnon, president of MacKinnon & Associates, a strategy-consulting firm that has offices in Detroit and Boston. The reasons for the turmoil are numerous: a sputtering economy, increased global competition, the implementation of new technologies that displace jobs, the deregulation of certain industries, and the general consolidation of other industries, such as banking and health care (Greengard). If you have been following the news in the last few months, you have likely heard that Microsoft is fighting an antitrust court case. The company has become so huge that is has threatened the industry with a monopolistic hold on the computer world. I am sure that not many professional business analysts saw this coming; think of all the employees that might lose their jobs, "Oh no, nothing can happen to me. I'm working for Microsoft for crying out loud." "Think again" says the wise man, because no one is ever completely immune to such an outcome. A recent example is GM, who has laid off about 20% of its Wilmington, Delaware assembly plant due to poor sales of a recent new model. The employees who live in Delaware will receive 95% of their pay for the next 6 months before being put in a GM job pool to become eligible to work in other GM facilities. The company Boeing has cut down its number of employees from 238,400 to 191,500 since February 1998, according to its company data. After spending the major part of the last two years restructuring and leaving its worst parts behind, Boeing still plans to cut 5,000 more jobs than intended during the year 2000. Third Age Media recently laid off more than 30 employees in an attempt to increase focus on its web site to areas of interest for baby boomers. To name only a few others, Petstore.com, Iexchange.com, Corel, and Coke have all gone through the process of giving employees their pink slips. This is yet another way for big corporations to throw us curve balls and rock the steady boat that we call life. Remember that being cautious of these possibilities, or lack thereof, can only prepare you for when they actually come about. Better safe than sorry! (Gomez) Downsizing is a trend that will not stop soon, the following chart summarizes what could happen within the next ten years, and this numbers might climb as the technological changes continue to erupt: Article A94141786 Ten Reasons why your company shouldn’t downsize: Andrew Salloum John Di Frances Successful Meetings, August 2002 (c) 2003 by The Gale Group, Inc. Gale is a Thomson Corporation Company IT'S TRUE THAT DOWNSIZING MAY provide a decrease in operating expenses in the near term, but the long-term impact may not be so positive. As few as ten years ago, most layoffs were a temporary solution to increasing costs. Not so today. The new order is that of permanent severance. For many, the proverbial "pink slip" has turned to bright red. Moreover, the level of employee being severed has also changed dramatically. In previous decades, the cuts were heavily weighted toward blue-collar production personnel. Today, with our heavy reliance upon technology to drive the eco...