IntroductionEmployee Layoff of has been a persistent managerial phenomenon for the past decades. If a company finds itself in financial complexity; the universally accepted corporate cure has been to cut workforce. Strong empirical data suggests that reduction in the workforce rarely return the anticipated economic and organizational gains, downsized firms are strained to deal with the human and societal after outcomes called secondary effects in a post downsizing era. Human costs of layoffs are expensive and upsetting to individuals, entire society and their families. While shrinking workforce can be avoided completely, downsizing linked layoffs must be a managerial tool used as a last than first resort (Gandolfi, 2006). In a financial recession, a corporation must cautiously consider its options and evaluate the possibility and applicability of cost-reduction options prior to approving personnel layoffs.
It is imperative for a corporation to factor in the thought of cost-reduction and identify the precise cost-reduction phases that typify the company’s existing business pose and setting. Preferably, a corporation should be in a position to settle on the probable period and severity of the business recession as perfectly as possible.
To do that task productively, the executives must be acquainted with the cost cutting phase that the company is currently faced with. A company’s cost-lessening period refers to the duration the association needs to be able to decrease operational expenditures. However, forecasting a business downturn perfectly can be exceedingly complex. Therefore, companies have a normal tendency to counter to rather than wait economic turn down. To avoid the implementation of downsizing-related activities A theoretical framework presenting the cost-reduction stages of a company coupled with a brief introduction of modern human resource practices that some companies have implemented, are offered, basically, builds upon, three cost-lessening phases: short-range, mid-range, and long-range phases.
Cost-reduction stages are depicted as: Cost-reduction StagesThe theoretical structure covers three timeframe- linked phases imposing several in-house cost adjustments that have fashioned a range of stage-correlated human resource practices. It is significant to note that the human resource practices are collective. The practices in each phase are not different, from the real phase, but valid in ensuing phases in a collective approach. The stages include the following: Short-range cost adjustments Signifies short-range cost adjustments in reaction to a petite, momentary decline in business activities The industry slowdowns are anticipated to last not more than six months, the company resorts to slight, modest cost-reduction actions in this phase.
These prelude adjustments ought to permit the company to avoid involuntary cutbacks and return to regular business activity in four to six months classically, this stage originates with an unanticipated fall in sales estimate. It is typified by short-term outflow adjustments to avert a medium-range downturn or a more permanent, long-range turn down. The urgent acknowledgment of a temporary business trip and the stanch engagement in prelude or preliminary cost-lessening techniques ought to allow the company to centre its operations in a cost-sensitive approach for a quick recuperation The prospect of achievement for the short-range cost modification pivots on a number of issues: Senior executives must be able to articulate the business needs for the cost-adjustment measures efficiently and emphasis on the short timeframe of the plan.
A company’s ability to express the significance, that preliminary cost-reduction measures at present will likely prevent layoffs in the future is vital.