DOWNSIZING

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DOWNSIZING  
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Downsizing What Does This Mean?

• A company's reduction in the number of employees,
  bureaucratic levels, and overall size in an
  attempt to increase efficiency and profitability.
  
• Have you downsized already without realising it?

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Key Examples

• Closing offices.
• Reducing employee working hours.
• Not replacing staff that have left or retired.
• Replacing people with technology.

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Benefits of Downsizing?

• Survival!
• Improve organisational efficiency, productivity,
  and/or competitiveness?
• Long term profitability and the bottom line.

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Redundancy

• Redundancy occurs most commonly, where a company
  require fewer individuals
• It is not the employees who are declared
  redundant - it is always the job that is
  redundant, meaning that the job holder will leave
  as a result of the redundancy

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How to downsize

• A business case.
• A correct procedure.
• A fair selection process - Inform and Consult.
• Follow a fair dismissal procedure.
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Pools are identified

• Same role then it is important that they are all
  included within the group (or pool)
• Are jobs interchangeable
• Selection Matrix and objective criteria

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Example Matrix

•  NAME OF EMPLOYEE
• John Smith Jackson
  Michael David Jones
• CRITERIA
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• Performance 3 2 1
• Flexibility/Adaptability 1 2
  3
• Attitude to job/company 3 2
  1
• TOTAL MARKS   7 6 5
• If only making one redundancy, David Jones is the
  lowest scoring employee and would be
• made redundant

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Dangers

• The KEY to redundancy is CONSULTATION.
• Discrimination and Unfair Dismissal.
• Lose valuable trained staff.
• Do not use to tackle poor performance!
• Survivor syndrome.
• Hidden costs.

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Alternatives to making redundancies

• Lay off and short time working.
• Redeployment.
• Suitable alternative work and a right to a four
  week trial.
• Flexible working.

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• Other Issues
• Sub-let, under-let or share possession.
• Consider sale and leaseback.
• Retention of title clause in commercial
  contracts.
• Opportunities include a presence online.
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