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Downsizing and the Importance of Retraining the Workforce

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Addressing the needs of survivors is essential to organizational success after downsizing, and it depends upon proper training and retraining for employees. Usually, the existing information regarding future skill needs and possible returns is never perfect. The trouble of forecasting future needs increases during major restructuring of any organization. Expectations for future skill requirements and occupational demands tend to cease being achievable, and inborn management biases can lead to unsuitable decisions about investments in training. The HR professional has to tread with care during downsizing to ensure the continued success of his or her business while also tending to the layoffs.

People in human resources jobs treat survivor-support plans as major components of their downsizing plans. Plans to support survivors are developed and executed at the same time as organizational restructuring. A survivor-support plan includes:

  • Training managers and supervisors to deal with the concerns of stressed employees while maintaining motivation and productivity
  • Developing a communication plan with human resources management to addresses the concerns and needs of survivors

  • Initiating management/employee dialogue sessions, publications, and information sessions to make employees aware of changes and retain trust

  • Advising employees of the objectives of the new organization and the new performance expectations

  • Reaffirming the organization’s commitment to its employees

  • Building positive employee opinions of the goal of restructuring

  • Fostering support for the employer’s new vision by advising employees of new career opportunities

  • Providing counseling and assistance to employees leaving the organization

  • Building an employee-development plan that aligns with the organization’s new objectives

  • Showing commitment to retrain, retain, and promote the survivors  

The success or failure of restructuring and downsizing depends largely on adequate retraining of survivors. However, successful retraining programs can fail due to information failures such as: 

  • Overstressing the positive aspects of restructuring without linking retention to concrete performance appraisals

  • When employees perceive the potential for large rewards, they may project only their strengths and mislead the selection processes

  • Those who offer training programs can overstate the content and potential returns of training

  • Off-the-job training is neglected in favor of on-the-job training on cost issues

A business’s loss of competitiveness at existing cost levels reduces need for workers. The extent of job loss depends both on the downward flexibility of wages and also the elasticity of demand for labor as wages decline. Factors like minimum wage regulations, explicit or implicit contractual arrangements, or collective bargaining agreements can limit downsizing. It is up to human resources professionals to see that survivors can remain productive during retraining.

On the net:Downsizing and the Impact of Job Counseling and Retraining on Effective Employee Responses

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