Training and Development in an era of Downsizing

Downsizing was viewed as an indicator of organizational decline. Over the past decade or so, however, downsizing has been able to shed that stigma gained legitimacy as a reorganization strategy (Fisher & White, 2000). Despite considerable evidence showing that many downsized firms have failed to achieve their economic and organizational goals, downsizing has continued to be adopted around the world; even in the best of economic conditions.(Gandolfi 2007). Clearly downsizing has been popular and enduring, but not always effective, productive, or valuable.(Macky, 2004)

Consequences of Downsizing:

Downsizing has profound human consequences on the work force, the so called aftereffects of downsizing.

The impact of downsizing on survivors is one of the key reasons of the failure of many downsizing activities and their ensuing long term problems.

The prevalence of the survivor syndrome and other related symptoms constitute a barrier to productivity.

It has also been found out that downsizing firms are frequently left with a narrow minded, self –absorbed, risk-averse and depressed work force.

Causes of Downsizing Failure

Firms are poorly prepared for downsizing. Downsized firms have no downsizing-related R plans and policies. They are badly failed to provide adequate support plans for survivors and focus more on

providing professional outplacement services for the downsized victims. The blatant ignorance of the impact of downsizing on survivors is one of the major

reasons. The negligence of the human capital. During the period of downsizing, the extreme focus of the top management is on the

short-term operational decisions and thus long-term commitments are postponed or neglected.

Most downsizing efforts are not properly planned, managed and implemented effectively and cause a great deal of resentment among survivors.

Life time employment and reciprocal loyalty are obsolete and results the death of traditional career.

The tendency to consider employees as short-term costs to be reduced and thus losses the focus on employability.

The paradigm shift from the old to the new covenant and the one- sided breach of the psychological contract is believed to be the root of survivor related illnesses.

Lack of Focus on T & D. Short of HR programs to promote survivor’s re-engagement with the firm.

HR Components for Successful Downsizing

In order to have positive outcomes of downsizing, following steps needs to be taken care of:

Firms need to pursue a strong communication based approach in times of major change providing an environment of effective change and a meaningful strategy to cure survivor sicknesses.

HR plans must include open, two way communication channels. There needs to be a shared vision. Respect for the seniority rights and depersonalization of layoffs. Focus requires on coaching and mentoring programs Due to decreased levels of morale during downsizing, personal development

interventions needs to be done which includes counseling, training and transition management workshops.

Proper plans to support for victims and survivors. The most important thing to be emphasized on is Training & Development.

The Benefits of T&D

Individual’s opportunity for promotion and self improvement, job satisfaction chances to learn new things and adaptability.

Firms increased levels of productivity, profitability, efficiency and effectiveness as well as reduce rates of absenteeism, labor turnover and accidents and errors.

Employee empowerment to cope with major changes, crisis and critical incidents. The development of employees meets the foreseeable needs of the firm and seeks to

realize the potential of each individual. T & D leads to a competitive advantage.

It increases overall profitability. It is associated with empowerment, participation and recognition. It leads to a higher level of strategic competitiveness.

Effective HR related practice during downsizing

Downsizing needs to be implemented from top with recommendation from lower level employees based upon job and task analysis.

Executives need to develop a change management plan with a clear vision of organizational identity.

Management needs to pay special attention to the survivors through training, counseling, regular information and two way communications.

Firms need to identify redundancies, excess cost and inefficiencies. Leader should facilitate downsizing by preparing for a high level of activity, in offering

transition management training, acknowledging uncertainties and concerns, communicating plans and actions, telling the truth involving people in managing the transition and establishing a safety nets for transition victims.

Effective downsizing plan must include for all six fundamental HR areas including employee engagement, communication, support program, selection processes, HR management tools and T & D which is considered to be the primary importance during downsizing.

Prepared by:

Asma Umar