Regardless of your efforts, there’s no other solution than performing downsizing. When you need to downsize, it is important not to burn the bridges behind you. As an example, you should know that employees shouldn’t be completely terminated. The economy will eventually rebound and you will have significant amount of orders once more. Replacing experienced workers will be very difficult to do. Integrating and training the new hires will be immensely expensive and time consuming. So, the first thing that you need to do is to immediately call them back when the situation recovers. If you apply permanent termination during downsizing, you will be forced to bring employees back as outsourced contractors and it means that their fees will be higher than their salaries.
Because their skills and experience in the company are irreplaceable, you need to hire them in any way possible. These former employees may agree to return, but they will do that under their own conditions. Independent contractors often face significant risks, so they need to have better security in their lives. Eventually, the weeks become months and eventually years. The total amount for will be quite significant in the end. During downsizing situation, you should look for ways to deal with hidden costs. You need to take things like lost productivity, lost customer relationships and declining morale fully accounted. Find ways to keep the morale high and maintain customer relationships, regardless of loss of multiple experienced sales and marketing staff due to downsizing decisions.
The reduction in workforce will affect productivity. When downsizing your company, you should also implement methods that can help you to quickly ramp up delivery. After performing downsizing campaigns, you should make sure that you are able to meet all demands. If you fail to quickly respond to sales, you will lose sales and your situation will decline further. It means there’s no benefit of having downsizing campaign, if your sales decline due to lost productivity. You should make sure that your business is able to regain its growth and profitability, because they are the real reasons for your downsizing efforts. You should also need to recover your diminished market position. You need to become innovators and market leaders. You should build proper image in the mind of the public.
When the economy dips, it is important for you to deal with any potential impact and this will allow you to prevent downsizing in the first place. Because people will know about your downsizing effort, your reputation could be diminished. So, you need to counter that by rebuilding your positive image. The imminence of business failure can be due to degraded public image, instead of your decision to delay downsizing. Despite your downsizing effort, you should make sure that profits and revenues can still be achieved. Personnel will need to be reassigned to the right areas, so proper functions can be guaranteed. You need to ensure that rapid internal innovation is retained, because you really need to innovate in a highly stagnated market.