May 31, 2020 is a daily online magazine covering small business news. We help entrepreneurs transform ideas and innovations into greatness.

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HR Issues After Downsizing

Written by Amy Bax for Gaebler Ventures

Downsizing causes stress for those who leave the company and those employees that remain. Keeping up the morale of these survivors is important. This article discusses a few ways to address issues and keep the company on track.

Downsizing and layoffs create stress not only for those directly affected but also for the managers and employees that were not let go.
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Often, employees who remain do not feel happy that they survived the layoffs. Rather, they feel angry or shocked that the layoffs happened.

Their image of the company may have changed, as they now feel that the environment has become more cut-throat and everyone is on their own in battling to survive.

Problems That Arise After Downsizing

Overall, employee morale is going to suffer. This can negatively affect many things, such as productivity. Employees may become distracted or too focused on issues created by the downsizing and not be as efficient or creative-minded as they had been before.

Security issues will also arise, leaving them wondering if a downsizing were to happen again, if they will be the next ones to go. Employees may even consider leaving the organization because of uncertainty or they feel the company image is tarnished.

Clearly, keeping up the morale as much as possible is ideal. Here are a few ways to combat hard feelings and to keep the company running smoothly.

Assisting Employees After Downsizing

Help them understand why it happened. Call a meeting to discuss the nature of the downsizing, what the future holds, and the security of their jobs. Also take this time to answer questions or issues that they want to have addressed. If possible, offer career counseling to those who are having a hard time with the change.

Clearly communicate what the future holds. Address the new changes in policy and structure any why they are in place. If there is a large amount of restructuring, make time for employees to come together to build new working relationships through workshops or social time. This way, they quickly become more comfortable with the new environment and people they will be working with.

Assisting Management After Downsizing

All employees deal with stress related to downsizing, even managers.

It is especially hard for them to be in charge of relaying the bad news to numerous employees that are being laid off. Just as you are for the rest of the employees, communicate to them why the process is necessary, and be open to discuss the issues they have with the downsizing.

They, too, will be directly affected in the future when it comes to structure of the groups they manage, new processes that need to be implemented, and new work groups that will be formed.

Monitoring the Effects of the Layoffs

Often, an indicator of how the employees are dealing with the downsizing is through retention rate and absenteeism.

If you see an increase in turnover or people calling in, there are still issues that need to be addressed.

Also, have managers ask for feedback. Employees may feel comfortable going to them versus someone higher in the company that made the decisions. Have managers ask for feedback and report the issues on a regular basis. Actions can then be taken to address common or individual concerns.

Remember, honest communication is going to be the basis of what best helps you and your employees for working toward a successful future.

Amy Bax is interested in providing innovative informational resources to entrepreneurs. She is currently an MBA student at the University of Missouri - Columbia.

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