AKRON, Ohio – Some organizations may be too quick to cut employees, others too slow. The consequences of either mistake can be disastrous for a business.
Sometimes downsizing the work force is the best, if not only, business decision, said John Sullivan, human resources consultant and author of “Rethinking Strategic HR: HR’s Role in Building a Performance Culture.”
Here are a few indications that the time has come, according to an article Sullivan wrote and posted on his Web site:
n “Your competitive market share decreases by more than 5 percent.
n “More than 25 percent of your product divisions are unprofitable.
n “The ratio of employees to managers increases by more than 10 percent.
n “Employee turnover decreases by more than 25 percent.
n “The backlog of unfilled orders decreases by more than 10 percent.
n “Percentage of plant capacity utilized drops by more than 10 percent.”
Sullivan said the most important thing to remember when considering layoffs is that no one should be surprised by a pink slip.
“A layoff is an admission you’ve failed. You’ve gauged the market wrong, you’ve overhired or held onto people too long,” Sullivan said. “You can’t avoid business going down, but you can warn people and train them.”
Sullivan suggested running employees through the organization’s worst-case economic scenario.
“Explain to (employees), “If the economy keeps turning for the worse, here’s where we’d have to make cuts. Tell them, “These are the skills you need to protect yourself.”‘
Then, he said, provide interested employees with training for those skills.
(c) 2006, Akron Beacon Journal (Akron, Ohio).
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