Challenges of Managing Staff Retrenchment: Downsizing Period

Human Resource HR Retrenchment and Downsizing greentick

Managing Staff Retrenchment

As a result of this pandemic, there is a significant impact on businesses and the economy.  Many businesses still could not run properly and even though those who are on the verge are facing the challenge of Human Resource HR retrenchment and downsizing. Generally, the organization uses the downsizing as the last option but in this current situation, it has become the necessity for most of the organization to survive in the challenging environment of financial difficulties. How can we overcome this challenge of retrenchment and downsizing in lock-down period? The main purpose of this downsizing is to realign the workforce with the current business situation.

Challenges in Human Resource HR retrenchment and downsizing

When an organization undergoes downsizing through layoffs, a problem that exists beforehand most still exist afterward to some extent. Retrenchment can have a psychological impact on the remaining employed as well as those who have been laid off. Employees struggle with uncertainty about the future of the company and their jobs. Moreover, the retrenchment may lead to other problems such as demotivation, insecurities, and workload in the remaining staff and decrease the work productivity of the organization. Retrenchment must be handled in such a way that after downsizing. It must continue to run the most vital jobs otherwise it may lead to an adverse effect on the organization. How can we manage the employees downsizing?  What strategies could be implemented? How organizations can mobilize in this new environment?

Strategies applied during Human Resource downsizing period

It is the very first concern and the global challenges to every business organization. Some of the strategies that could be useful during this downsizing period are as follows:

– Protect people by understanding their psychological condition.

– Communicate effectively to keep them informed and supported.

– Continuity of work by providing resources to increase productivity.

– Reconnoiter workforce levers to keep a balance between the need to cut costs and a desire to employ.

Apply business strategy with the workforce to ramp up in the recovery and the evolving market.

Retrenchment and Downsizing is right?

An alternative to retrenchment, companies, or employees may be temporarily layoff. Employees can take annual leaves or unpaid leaves or a training layoff scheme. This training layoff scheme allows an employee to take part in skills training. For some companies, these measures may not be effective and they have to retrench those employees. There are high risks associate while the retrenchment process so it will be beneficial for employers to take legal advice first.