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At the time of crisis every company should evaluate their resources which is their staff, motivate them to be more productive and achieve what they strive for. Downsizing in staff is only beneficial if company cannot produce or sell what they did in past. if they are unable to meet their set targets and plan to reduce the volume of business.
Thanks all for your answers,
Actually, I faced this situation before months in my last job, there were a huge cost (salaries) at the end of each month which affected on targeted profit, our profit comes from (registered contract and sales) that time financial crisis hit our region, which affect on customers and let them neglect the luxury products and focus on essential one, meanwhile there was the end of our offer which was very attractive.
In order to save our ship, we divided our crew into two groups
A- Essential group (which include skilled Sales person, productive employees, essential managers' and\\or supervisors, well trained sales reps. Outskirts sales reps).
This group should be untouchable for a while.
B- Not Essential group (which include unskilled employees, not productive employees' surplus and unnecessary employees, sales person. from all department which they will not affect on productivity and daily process)
Then we started to resign them gradually (Group B) with full cooperate from Financial and HR dept's. and test the cash flow, cost, monthly expenses, level of fixed cost, when we reached reasonable level . We stopped this process.
At that time we arranged a meeting with all employees and informed them why we applying this strategy now, and how they will cover the shortage and how much tasks will be added on their responsibilities.
These days, many organizations are in this kind of situation. First is to take a look at the Company's financial situation and possible strategy. Review the manning requirements versus the current manning available. Review salary and benefits.
In this current economy, downsizing and restructuring are the only options left to Organization who wants to survive.
If company is reducing its production or sales then non productive employees should be fired but if company is confidently penetrating in market then no need to down sizing because then salaries expense will not effect on profit as economical crisis effect on profit.
This is a question that will differentiate a leader from a manager.
A manager in countries like US and Europe, you will probably make a recommendation driven by short-term financial objectives, which is to cut specific costs and most of the time, labor will be the choice.
In egalitarian organizations like those found in Japan, the decision will be different. Because most employees probably know the real situation of the company, leaders will start talking to middle managers, and middle managers will start talking to team leaders, and team leader starts talking to their teams.
They start evaluating cutting compensation. They agree on the level of compensation cuts they can live with from top management to team leaders. They work on the plan. They make it succeed and when profits start coming in again, they structure the return to loss pay for those who accepted pay cut-backs.
Most of the time, in organizations with professional managers driven by share value, the easiest thing for executives is to start laying off people by the hundreds so they can keep their pay and their year-end bonuses.
Now, you think, are you a manager or a leader?
now if we talk more no benefit
just owner start to terminate staff
YO U QAN USE A DEFENSIVE STRATEGY 1.TO RETAIN ONLY KEY STAFF 2. LAY OFF LESS IMPORTANT STAFF 3.RESTRUCTURE YOUR ORGANISATION 4 CUT DOWN COST 5.FOCUS ON PRODUCTS WITH IMMEDIATE PROFIT 5.OTHER UNIT LESS IMPORTANT SHOULD BE CLOSE DOWN..7,YOU SHOULD IMPROVE MORE ON YOUR STAR PRODUCT THAT BRING HIGH RETURN TO THE ORGANISATION.
It all depending upon the business nature and future forecast. It is not just the solution to reduce the manpower or resizing the manpower. If you are optimistic and have the potential to gain the share then why not put efforts to take the share. Its HR function responsibility to maintain the company resources as per business need. Smart planning, effective efforts and on target mobilization can make organization successful in the crises. Once you quit your trained and loyal staff then will not be easy game to catch them again.
