Article: Editor's Desk: The human side of downsizing

Strategic HR

Editor's Desk: The human side of downsizing

Rightsizing is a business requirement, which if not implemented properly, can impact employee morale & employer branding
Editor's Desk: The human side of downsizing

Economic slowdown is a reality that most businesses have to deal with today. The offshoot of that downturn shows up in the form of lay-offs, which have now become a part and parcel of running a business. As the world struggles to maintain its growth in the black, companies resort to lay-offs as quick-fix means of cost reduction. Lay-offs do lead to a reduction in labour costs, but the effects of such an exercise, which most companies rush through without proper planning, are devastating: It leads to a disengaged and depressed workforce, which in turn affects employer branding and the work culture.

The costs of downsizing go beyond severance payments and that is what our cover story this issue, Rightsizing, is all about. It talks about how rightsizing is a business requirement, which calibrates the organisation to the business needs and aligns the people requirements to the new business strategy, and if it is not done properly it affects employee morale, trust and the organisation’s culture and brand.

Rightsizing implies that the organisation has carefully considered what roles are required and what aren’t, hence it is not the “people” but the “roles” that get affected by this exercise. It focuses on communication to avoid the vacuum, thus preventing rumours from spreading and makes efforts to identify, communicate and support the surplus workforce.

Companies that have focused on maintaining employee morale while trimming their organisations tend to give careful attention to planning, execution and provides for a significant budget that is not only financial, but also in terms of management time and resources to this exercise.

Though there are short-term benefits of lay-offs, organisations need to focus on the future direction that the business will take and the needs and the requisite skills to head in that direction and take decisions that will ultimately have an impact on the current workforce.

For our cover story this month, we talked to CEOs, Heads of HR and industry experts like Ganesh Natarajan, CEO at Zenzar; Maruti Suzuki COO-Administration S Y Siddiqui; P Dwarakanath, Director - Group, Human Capital of Max India and Right Management Country Manager, Chaitali Mukherjee. They were of the view that both HR and business leaders need to be trained to deal with a slowing economy and that includes how to plan, implement and manage lay-offs.

This time for Big Interview, we had a fascinating conversation with Rudy Karsan, founder of Kenexa, an IBM company, who shares that the most important relationship that one should work on is the relationship with oneself. In this issue as well, Julie J. Gebauer, Managing Director (Talent and Rewards) at Towers Watson shared her career journey and her experience on building emotional, rational and motivational engagement with the workforce.

We also have news features on the new land acquisition Bill, a special story on the required shift in the way organisations determine pay from roles to people. In this issue as well, you will find a detailed supplement on health and wellness.

As always we hope you enjoy reading this issue. Please continue to share your feedback, criticism and suggestions with us.

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Topics: Strategic HR

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