Impacts of downsizing essay
The most recent downsizing effort was from the Persian Gulf.
Implications of Organisational Restructuring to HR Planning Restructuring: A Perspective Organizations and businesses today are faced with increased demands to become leaner due to global competition and rapid technology change. Other sectors, particularly the service sector, will register decreased profits as a result of reduced spending by their clients.
Severance Pay Employees who lose their jobs because of downsizing may be entitled to receive severance pay. This shift is more evident in its role towards downsizing. The practice also negatively impacts on the remaining workforce and the reputation of the organization that indulges it.
However, there are families that work through the difficulties and come out as a stronger unit. Information should not come as a surprise to employees.
Layoffs also increase the existing level of unemployment in the community.
It may provide information, updates and job seeking resources for employees displaced from their jobs due to restructuring.
By changing their business strategy, companies can find ways to maintain their workforce The effects are mainly economic, social, and psychological.
The practice also negatively impacts on the remaining workforce and the reputation of the organization that indulges it. Organizations rely on human resources to provide a smooth transition during restructuring while retaining desired employees and integrating new employees into the new organizational plan. The trust that had existed between different sections of the company will need redevelopment. Globalization and the breakdown of trade barriers among nations and the emergence of technology and automation have also necessitated companies to downsize. The psychological effects are far much overwhelming as compared to the financial and social effects. If the company repeatedly assured workers everything was fine before announcing an unexpected layoff, it will be difficult to regain the trust of the workers who remain. Other sectors, particularly the service sector, will register decreased profits as a result of reduced spending by their clients. Layoffs also increase the existing level of unemployment in the community. HR departments are responsible for researching, recommending and implanting employee retention strategies during restructuring. The number of organizations and jobs affected by downsizing has been staggering.
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