Managing Your Organization When Downsizing

We can easily find articles or discussions among HR about how to recruit with many methods and assessments. But, reference on downsizing your team in organizations is rare to find. As HR, we should know how to manage it well because when it is not managed well, downsizing can negatively impact the trust among employees and the management. It will also affect your retention rate, decreasing productivity, and creating unwanted internal conflict.

To avoid these things, there are some steps for HR to manage the employee when the downsizing season comes:

Managing Your Organization When Downsizing

1. Communicate Well to All Stakeholders
Management's voice or narrative should be aligned; when the top leaders have different opinions regarding the downsizing, it will spiral into a drama. HR plays a strategic role to guide the narrative and help to communicate it clearly to all employees. Please make time to socialize about it. Tell them what the organization wants to achieve, the compensation for the employees who got laid off, and the benefit for the employees that still stay with your company. Utilize all of the communication media to share this important information and make a space to dialog with the employees.

2. Conduct the Downsizing Process
Downsizing takes time to prepare - from the handling-over to dealing with all company's assets related to the person. Make sure the downsized employees understand all the phases they're going to endure and make room for them to prepare. They should be adapting to this situation and help sustain the working culture to still be good or better than before.

3. Offer Some Benefits to Your Employees
The management has to make it clear that they care about them. The downsized employees should be treated well with this soon-to-be-changed situation; show the goodwill by equipping them with some training, recommendation letters, and leave an open door to further partnership in the future. For the surviving employees, maintain their trust by communicating clearly what's in store for them, in terms of further career development or new responsibilities.

Upsizing and downsizing the organization has its challenges. If your company chooses to downsize its organization, don’t forget to manage the offboarding well, show your good corporate governance and be compliant to the regulations. Talk to KPSG about the offboarding process should you have any hesitation.

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