List: Downsizing Hacks Employers Should Consider

While owners of companies and businesses would want their ventures to stay afloat for as long as possible, dire circumstances do happen that could force them to make tough decisions.

Typically, downsizing occurs as a result of businesses and companies experiencing financial or operational problems that make maintaining a large workforce difficult. While this is undeniably a hard thing to do, it is sometimes the only means by which the business could continue operating.

Now, if your business currently experiences difficulties to a point where you’re seriously contemplating to downsize your manpower, you should know what options you have.

By knowing these options, you could make a wise decision on which one best suits your needs with the least negative impact on your workforce. Also, you could avoid potential lawsuits or having to deal with employment mediation proceedings that could give you undue stress and financial problem.

Here is a short list of downsizing hacks you should consider for your business:

1. Short-range cost adjustments.

Short-range cost adjustments are considered as the first stage of the cost-reduction framework that business could employ during temporary hiccups in their productivity. The great thing about these adjustments is that business owners have several means of downsizing to ensure their survival during a pandemic or economic crisis.

Among the short-range cost adjustment measures that you may employ include reduced workweek, hiring freeze, temporary shutdown of facilities, and reduced pay for overtimes. You should consult with your HR manager to discuss which of these adjustment options will best suit your company’s needs.

2. Voluntary termination.

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This downsizing technique involves buy-out offers to employees, which gives them several options such as receiving a one-time flat payment or enrolling in a four-year college course with tuition fees, full medical coverage, and a 50% salary provided by the company. Many employees opt for this one because it takes away much of the stigma associated with employment loss. It is essentially a voluntary resignation but with a more generous financial windfall.

3. Early retirement incentives.

There are companies that offer early retirement incentives for their employees who would opt to retire early in exchange for a handsome monetary package. A lot of employees actually prefer this specific scheme instead of being laid-off, since they can still find employment elsewhere.

If you’re thinking about employing this strategy, just note that you should carefully stagger the dates of exit of employees who opted for early retirement. This is to ensure that you would not end up crippling your daily operations or losing talents without suitable replacements in place.

4. Compulsory termination.

Compulsory termination is essentially a company’s last-ditch effort to streamline its workforce to have savings that could help it stay afloat and operational. It could involve as few as less than a dozen employees or as many as an entire department with several dozens of workers. However, this should again be treated as a last resort as it is arguably going to have tremendous negative emotional and economic impacts on the employees.

Downsizing can be quite a tricky business, but with great options such as the ones discussed, you could accomplish it with ease without being involved in costly legal disputes with your employees.

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