Downsizing for Survival – (Part One)

Any one who has ever been in  business consulting knows that one of the basic problems most enterprises face is ‘Over Staffing’.

Governments are famous for this; although many private companies run them a close second.

The Business model of 1890 has survived in many situations, only changing at bankruptcy, take overs, or when they owners (gasp) actually listen to the Trouble Shooters.

Not taking advantage of technology, because one needs workers in eye shot, or having useless positions, (i.e. too many managers) is another constant, but the biggest problem when a company is in trouble, (outside of someone running off with the assets) are too many employees.

Voluntary Redundancy — A Very Bad choice

In every company which has implemented a Voluntary Redundancy Exercise,  (VRE) the best workers have shot out of the building as if it were on fire.

This is because;

a) the best employees have usually rebuffed offers from other companies. And regretted it.

b) they can create their own businesses

c) they are bright enough to get off what they see as the Titanic.

In every company that has implemented a VRE the worst employees remain.

This is because;

a) no one wants them

b) they couldn’t run a lemonade stand

c) they don’t see that the ship is sinking

Never implement a VRE until after you have recontracted the best workers.

Pick out those you want to keep and interview them before you even hint that there are going to be job cuts (between 60 and 30 days before the axe).

Make it kind of a ‘casual’ discussion to ‘take the temperature of the business.’

Some will stay with higher pay, better conditions, maybe a promotion.

Some are looking for an excuse to leave.

Those who you can keep are blessings.

Those who are leaving give you the opportunity to either find a replacement from the floor, (and you do this within 24 hours, of learning who wants to leave) or you do headhunting.

To Emphasize how dangerous a VRE is, in one Cell Phone Company an entire department voluntarily resigned.  The company virtually got on its knees to beg them to stay.

Company had not known how dissatisfied its staff was. (I’ll give some details later).

When it is time to cull your staff, hand pick those you want to get rid of.

In the next article I’ll give you a few tips on how you make your selections.