Streamlining Reductions: Essential Inquiries Before You Scale Back Operations
In the current climate, many organisations are adopting a strategy that balances cost cutting with growth investment for future success. This approach is particularly relevant for companies in retail, arts and culture, airline, hospitality, and tourism industries, which have been forced to make widespread layoffs due to severe cost reductions.
However, for organisations facing downsizing, the question is not just about reducing costs, but also about building a workforce of the future. Instead of layoffs, businesses are rethinking downsizing strategies to include transition plans, outplacement, and alternatives such as redeployment.
This holistic approach to downsizing includes three key best practices: assessment, analytics, and redeployment.
Assessment involves evaluating workforce skills to create a map of current talent capabilities and identify areas where new or different people may be needed. During economic downturns or transformations, this process can help organisations minimise layoffs and instead reskill, upskill, and redeploy employees.
Analytics involves an intensive analysis of current job descriptions to determine which roles are likely to be affected by technology advances, and identifying employees with the attitude and aptitude to transition into future-fit roles. By doing so, organisations can make informed decisions about which employees to retain and which roles to fill through redeployment.
Redeployment, meanwhile, involves reskilling and redeploying employees within the organisation, rather than laying them off, to quickly and cost-effectively fill talent holes. This approach not only helps organisations maintain productivity but also reduces the financial and operational costs associated with hiring and training new employees.
Employers are rethinking downsizing strategies to include assessments, analytics, business intelligence, and redeployment, as a more effective approach to workforce planning. Leading outplacement service providers emphasise strategies to minimise layoffs during economic downturns because it benefits both employees and employers.
Some key reasons for minimising layoffs include cost-effectiveness and return on investment, internal mobility and cross-training, supporting employees’ transitions, mental health considerations, and maintaining employer brand and employee relations.
However, it's important to note that not all companies are facing drastic economic pressures. Some have experienced profound disruptions but not decimation. In such cases, a more nuanced approach may be required.
John Morgan, LHH COO & EVP in the Americas, has stated that layoffs are sometimes necessary for organisations undergoing transformation, cost reduction, technology incorporation, or talent optimization. In such cases, outplacement services can play a crucial role in managing workforce transformations.
Historically, outplacement services have played a role in managing workforce transformations, but over-aggressive layoffs during the 2009 financial crisis led to slow recovery. Post-pandemic, there is a need to reimagine a better approach to layoffs that supports employees and prepares organisations for the future.
The global skills shortage that existed before COVID-19 has not been alleviated by the pandemic, making shedding employees in hopes of replacing them with better-suited ones questionable. Therefore, organisations that invest in assessment and analytics can significantly reduce the number of people they are letting go, as they have a complete picture of employees and future roles they may be able to fill.
In conclusion, the future of workforce planning involves reimagining the approach based on assessments, analytics, business intelligence, and redeployment. By minimising layoffs and investing in employee development, organisations can not only survive economic downturns but also thrive in the long term.
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- In the context of workforce planning, organisations are focusing on reskilling and upskilling their employees as a strategy for the future of work, utilizing assessment, analytics, and redeployment.
- Financial institutions and businesses are recognizing the importance of investment in employee development during economic downturns, as it can lead to cost-effectiveness, long-term thriving, and a positive impact on employer brand and employee relations.
