Question

Discuss the types of downsizing over the past decades, including the reasoning behind why they occur, and the impact to the business. Include in your discussion the role that HR plays in hese type of management strategies.

Answer 1

Here, let me consider a type of downsizing that is faced by my organization over past decades, it is about workforce reduction, and the reason behind such occurrence is organization found so much expanses or cash flow out like overhead expenses, whereas they have seen drastic reduction in sales revenue generation, such scenario created pressure on the organization, as they are incurring losses over past period, so, they have considered downsizing decision like workforce reduction.

There will be several impact on the business, such impacts are:

• Business will go with attrition that could generate poor human morale, existing employees could come in fear, and so, their performance could be affected.
• There could be human right issues within that business, employees may not receive their right, and they could get lower severance cost value.
• Business will earn poor reputation in the market and industry, employees hiring could become tougher job, when business needs talent again.

HR plays crucial role in such context:

• HR will consider such employees who have right skills, expertise and those are useful to the organization, further, HR professional always take such resources or talents that they can be retained at the workplace over long time,
• They will keep in mind about the capability of the organization, hence, they will not hire such more employees, so, organization needs to expel out later.
• They could build partnership with various contractors that could serve their project purpose, here, they will not become employee and receive employee benefits, hence, company could put more emphasis on taking the projects and that can be served by such contractors with more flexibility.