Downsizing and its Impact on the Rest of the Employees

Many companies downsize in times of financial trouble. This reduces the scale of a business. Downsizing can occur for a multitude of reasons. It can be due to lack of skill, outsourcing, modernization etc. For example, so many businesses downsized during the recession. This meant letting people go without long-term notice and with only a month or so pay advance. Downsizing, although might be good for the business, and helps it stay afloat during tough times, is not good for the rest of the employees. No matter how much they may try to prepare themselves for this factor, when it actually comes to it, no employee is prepared for it. Plus, downsizing can also have an impact on the rest of the employees.

Employees who have not been downsized may initially take on the added burden of more work as a motivational incentive. They may feel they are being appreciated and they may also work harder due to this factor. However, with time, many employees, who have been given the added work of the departed employees, start feeling overwhelmed and overloaded. This leads to unnecessary tension and pressure, and this impacts productivity.

Many factors can be looked into regarding these feelings of employees. They may feel upset about the lack of their colleagues or they may fear losing their jobs too. Some may even feel guilty that they were not downsized. All these feelings result in the blame falling on the management. Employees, who were not downsized, are looking for someone to blame. The easiest target is the management.

When this happens, management has a few options that can be considered so that employees are, once again, left feeling content and their morale is lifted. One of the best ways to improve employee morale is to explain the current situation to the employees. It is always a good idea to explain to them the need to downsize and the reason for the actions taken.

It is necessary for management to be genuine about their feelings about the people they had to let go. It is also necessary for management to find out how the rest of the employees also feel about this situation and the action taken. Doing so, enables the rest of the employees to vent their frustrations and anger without keeping it bottled inside which can lead to unnecessary problems in the long-term.

Rumors are bound to spread across the company about who are to be terminated next. This should be righted immediately. Employees, left in the company, should be assured of stable jobs. This is the number one question in all employees’ minds. “Will we be next?” Once they are assured of stabilization, they can go about doing what they were doing with a free mind.

Downsizing is not easy on the management, as well as, the employees. It is something most management hate doing. Yet, it has to be done for the good of the business. The right management team will ensure that the company moves forward, the right way, when this occurs. Doing things the right way will enable employees to work without any worries and this is a sure way to increase productivity.

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