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Downsizing – layoffs – reduction in work forces…all unfortunate realities many companies are facing today as a result of a sagging economy.  So how do HR professionals determine which employees go and which stay?

First, every organization must create a strategic plan based on business needs that identifies the workers to be laid off or terminated.  Even though seemingly safest legally, it is not always wise to simply cut 10% staff from each department, letting the last hired walk out the door.  The last hired employee may be the very one that has the most valuable experience and skills that will take your company to the next level, regardless of seniority.  Department needs will likely vary, as well.  Customer service, for example, may require more employees than Accounting.  Sales and marketing may need more employees than graphic design.  So it doesn’t seem sensible to make across-the-board cuts in a fluid work environment.

Prior to downsizing or lay-offs, each department must be thoroughly reviewed.  Look at the products and services you will be offering.  Look at the resources needed to get your products and services to the marketplace.  Which of these products and services is likely to be profitable?  What talent will you need to run the new organization?  These questions will help identify which workers are needed to catapult the organization to success, especially in difficult times.

One of your chief goals should be to keep your intellectual capital even though you might not need the headcount today you needed two years ago.  And how you handle your lay-offs and/or terminations will definitely influence the intellectual resources that remain with your company.  We will address the termination process due to downsizing that will give you the best advantage in moving your company forward in our next “Ask Nancy” column.  Stay tuned!

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