Why You Should Resist the Temptation to Downsize?

Why You Should Resist the Temptation to Downsize?

Almost each day, we hear that companies, both large and small, seek to downsize, although the overall economic situation is stable. However, if your situation is difficult, you may to need resist any temptation to downsize. It is possible that any of your business decisions will have negative impacts to your employees. They will experience all the immediate effects. Whether it is downsizing or rightsizing, radically cutting expenses can be achieved in many different ways. Repeated cycles of business expansions and contractions will make things look really bleak, if you don’t approach them in a proper manner. You should do cost cutting actions in a proper way. There are bad effects of downsizing that can happen to your company. One clear effect is that you will lose a pool of experienced employees.

Experienced and furloughed employees will eventually be recruited by other employers. When employees are informed that there release is inevitable, they will start to seek new employment. At that moment, all of their loyalty and motivation to work will vanish. They will become much less productive and all they want to do is to stay long enough to get the last paycheck from your company. It is amount to determine the root causes of problems in the company that give you a desire to downsize. Addressing them is a better thing to do than performing a downsizing that can have lasting effects to your company. Even if not all employees are affected by layoffs, the remaining employees will be affected by lack of trust and poor morale. They don’t know whether they will soon get a notification that their skill isn’t needed any longer by the company.

 You really need to think it through if you want to terminate a large number of experienced, senior and older employees who have remained with your company for decades. Before attempting a downsizing action, you should place yourself in their shoes. The reward of their long-term loyalty should be appreciation for their service and they need to continue having productive times. It is your responsibility to ensure that they can always feel more secure. Downsizing could also cause your company to lose experienced and knowledge base. This is an often overlooked aspect. If your company loses these important factors, productivity will decline and the quality of your products and services will be affected as well. There is no substitute for the wisdom, experience and knowledge of veterans in your business.

They can’t be replaced by new, fresh employees, regardless of their level of education. After performing downsizing, it is possible that your company will lose its long-held tradition. If you want to succeed, you company should have a sense of history and continuity. It will be a bad thing if you lose your corporate culture. Even if you are a great believer in constant change, it is important that valuable culture should remain in your company. You should make sure that the soul of the organization can be properly maintained. Downsizing will also cause you to lose contact points with long-time customers. Salespeople, customer service and marketers are those who have direct contact with your customers.

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