Tweet

Seven Steps To Downsizing

Written by: Allison Grace

Article Overview: If you're like other companies that are scrambling to stay afloat in this economy, you might be considering downsizing. Letting someone go is always a difficult decision, so make sure you are acting rationally and intelligently when you're forced to downsize. Layoffs create risks for businesses. Employees may view a lawsuit as a way to minimize the impact on their personal finances. The savings you'll generate on your payroll and benefits costs may be negated by legal costs. Follow these guidelines to make sound decisions and avoid the costs of litigation.

Seven Steps To Downsizing

If you're like other companies that are scrambling to stay afloat in this economy, you might be considering downsizing. Letting someone go is always a difficult decision, so make sure you are acting rationally and intelligently when you're forced to downsize. Layoffs create risks for businesses. Employees may view a lawsuit as a way to minimize the impact on their personal finances. The savings you'll generate on your payroll and benefits costs may be negated by legal costs. Follow these guidelines to make sound decisions andavoid the costs of litigation:

1. Before deciding who stays and who goes, make sure there arejustifiable business reasons for the layoff in the first place and that you have a clear picture of what your business will look like moving forward. The staffing decisions that you make need to be consistent with these business reasons and the end result you're seeking.
2. Choose a layoff selection committee, ideally consisting of diverse individuals in terms of age, race and gender. The individuals you choose to act as decisionmakers should be people that are most likely to remain with the company so that they can be available to help defend the layoff decisions should there be any litigation in the future. Include members of management who understand the business needs and have first-hand knowledge of employee performance.
3. Remind your selection committee of equal employment opportunity issues to ensure they are making sound decisions.
4. Check with your legal counsel to see if your layoff will trigger legally required notice obligations, such as the WARN Act (read more about the WARN Act at instanthrsolutions.com) or other issues, such as terminating an immigration visa and repatriating foreign workers.
5. Identify selection criteria you will use to make decisions.
   • Using seniority only can mean you retain your highest-paid workers, and lose some of your newer star performers.
   • Performance is the most common selection criterion, but it's the most subjective. Review past performance evaluations to help make the decision. If you don't have written performance reviews for your employees but decide to use performance as the deciding factor, it will be virtually impossible to defend against a claim of unlawful termination or discrimination, so you'll need to consider other factors.
   • If you're restructuring jobs, make sure to update job descriptions. In the event of litigation, you'll need to show that the individuals you retained have the skills to fill those positions.
   • Analyze the jobs and responsibilities within your business and determine where you have the most redundancy. Look for ways to shift responsibilities or reorganize processes so you can eliminate redundant positions.
   • Look at your management vs. staff ratio. Being top-heavy during a recession is pretty much a guarantee that you'll burn through your cash more quickly.
   • No matterthe size of your organization, all companies need to think like a small business during an economic downturn. Make sure the people that you retain are the ones that are most flexible and agile, with the ability to multi-task.
   • Hang onto your top performers. Human capital is your most valuable asset even in a difficult business cycle, and your competitors will quickly grab upyour key talent if they're available.
6. Once you have a list together, review it for any potential discrimination claims. Compare the demographics of the current workforce against the workforce you plan to have moving forward and make sure that any protected groups (based on age, gender, race and other factors) have not been disproportionately impacted. If you find there are potential issues, revisit your selection criteria or at least make sure you havelegitimate, nondiscriminatory reasons for the selections made.
7. Decide what benefits, if any, you will provide to laid-off employees. If you offer a severance package, you should obtain a release of claims from the employee. (Read more about what you are legally required to pay employees at termination and check out survey results to see what other companies are providing at instanthrsolutions.com.)

Layoffs are a common strategy for businesses trying to survive. Thoughtful consideration of the legal issues involved and the staffing requirements moving forward is required. Following these guidelines will help youavoid the pain of expensive lawsuits andensure you have the right people in place tomake it through an economic downturn.

Related Articles
  USE DOWNSIZING TO UPSIZE YOURSELF
  Downsizing with dignity
  The Truth About How to Avoid Being Laid Off
  Can Baby Boomers Retire
  Downsizing Mistakes

Article Tags: business reasons, difficult decision, downsizing, employee performance, end result, equal employment opportunity, hand knowledge, immigration visa, layoff, layoffs, legal counsel, li li, litigation, newe, opportunity issues, personal finances, selection committee, selection criteria, seniority, sound decisions



Related Forum Posts
Re: Drop out Billionaire - I reveived Bill Bartmann's DVD "9 Steps To Achieve Any Goal" as part of my monthly pack from Success University a few months back. It is a great presentation. I've watched it several times but not for a while so I'll view it again in the coming week. He is one of the greats. Like the best success mentors, he speaks with authority because he has come through much tribulation. His program sounds like a great bargain at $100 a year.
New Guy Here - Automobile Industry - Hi Everyone, My name is Ray and I work as a sales trainer in the automobile industry. I have just completed a new training curriculum for automobile salespeople in the industry. It is called The Baby Steps of Selling Automobiles. I am beginning my marketing efforts through press releases and seminar formats. I joined the community due to my continued desire to work independently creating my own happiness and growth. Thank you for having me and I look forward to more correspondence in the future.
Re: Success - I study success intently, and would like to share: Here's two excellent and nearly identical success-formulas from a couple of the world's masters. FIRST FORMULA: 1. Passionate Desire 2. Clear, Definite Purpose 3. Committed Decision 4. Take Action In Faith (Bonus Secret Sauce: 5. Repeat Consistently) I made a video about this, but am not allowed to link it yet. Google "Ryze Success Steps" for it. Oh, and this is Napoleon Hill's (Master Of Success Laws)'s Formula. SECOND FORMULA: 1. Passionate Desire 2. Understand It Is Already Done (Faith) 3. Relax & Allow It To Unfold (Go about your life calmly) This one is courtesy of Abraham-Hicks (inspiration for the movie The Secret). Hope that helps!
Success Strategies - How to get the results you want now? Success Strategies and Action Steps I have used are: The Power of Choice Where you are at this present moment, is exactly perfect from the choices you have made. If you want to be somewhere else, you have to decide clearly what that is (your goal/outcome) and create action steps to achieve this. The Power of Focus The book "The Power of Focus" by Jack Canfield, Mark Victor Hansen and Les Hewitt, is one of my treasures in my Entrepreneur Library. If you focus on what you want versus what you do not want, your conscious and sub-conscious mind will direct attention to this. The movie, What the Bleep, Down the Rabbit Hole, explains this in detail about quantum physics and what we create in our lives. The Power of Commitment This is not about commitment to others. The first step is the commitment, your word, you make to yourself. Accountability and responsibility are additional success strategies and ingredients to creating the success, defined by you, that you want. The commitment to others reflects your integrity, your word and the team you work with. Co-workers, clients, yoru family, friends and community. My Success Acronyn in Success Breakthroughs(c) is: S pecific & self-directed U nlimited opportunities & possibilities C reate powerful outcomes C onsistent measureable results E xperience pwoerful transformation S olution and action-oriented S uccessful habits and outcomes Break Through to Powerful LIfestyle & Performance Choices Moira
Web Pro News' "Mom's Top 10 Reasons to Social (Web)Mark - I belong to WebProNews, a weekly eletter which provides lots of good info. I reproduce their whole article below on "Mom's Guide To Social Marketing" (No intent on violating copyright - if you think this is good info you too should subscribe to Web Pro News too.) Your mother, if she did her job right, taught you everything you need to know about how to get along in the world and how to get ahead in it. When we were kids, we thought these rules were silly, but later we learned her advice was pretty valuable. In honor of Mother's Day (May 13), we've put her wisdom to work in online marketing. -------------------------------------------------------------------------------- Editor's Note: Social marketing is quickly becoming an integral part of generating business online. While search is the on-ramp, social networks are the destination. And just like any social setting, your rep is important. Mom's Guide to Life, we thought, was a great Guide to Everything. Did we forget some valuable tip? Let us know in the comments section. -------------------------------------------------------------------------------- Mom's Top 10 Steps To A Good Online Reputation 1. Put Your Best Foot Forward: As recently as a year ago, when things were newer, more experimental, a presence on MySpace only was fine. Not so anymore. You have to be everywhere, treating branding in the online world the way you would in the real world. Most social networks allow you to set up a profile page for free (the ones that matter most do anyway). Create your online persona (a polite one), then clone it as necessary. 2. Make Eye Contact: Just like in the real world, wallflowers don't get noticed. The wallflower is most likely an incredible resource – it's just that nobody knows her because she doesn't put herself out there. Be a participant by commenting, inviting, giving. Show up at your new neighbor's door with a gift. It always goes over well – just remember to button your blouse. 3. You Are a Reflection of Your Mother (Company): Nobody likes a poorly kept lawn except the lazy bum that lives behind it. Maintain your public face on the social networks, shine your shoes, crease your pants, embrace your OCD. It may not be your homepage, but it is a home away from home. Maintaining several of these online presences is work, but so is business. 4. Keep An Open Mind: There's an appropriate cliché for every situation – all your eggs in one basket comes to mind here – but I prefer my grandfather's chestnut: "You drove your ducks to a damn poor market." Poetic, that man was. For a long time it was search, search, search. Before that it was email, email, email. But now you need to integrate your campaign. Search is a staple, a pillar of your online campaign, but we also know that Wikipedia ranks consistently number one in the SERPs. That means you need a Wikipedia page, too. Note: YouTube also ranks well. 5. Become Necessary: Viral marketing is tricky, difficult business. But maybe it doesn't have to be. Maybe if you realign your approach to reflect what you, as an individual enjoy, instead of being a salesperson, you can find a more intuitive connection with what the public wants to see. It's often been said that a salesman sells himself more than the product. So if you want to make linkbait, think about what would cause you to bite first. If you look at your viral attempt and see more corporate talking points than linkable material, it's time for a do-over. 6. Like the People that Like You (Even If You Think They're Annoying): Barack Obama's campaign people did something brilliant, and followed up with something not so brilliant. That makes it a great case study. An Obama fan set up a MySpace page and soon attracted thousands of friends. Instead of competing with his biggest fan, Obama endorsed the site as the official MySpace campaign headquarters. That was the brilliant part. After the page "got too big" for the original operator, the campaign crew took staged a coup to wrest control of the page from their biggest fan. That was the not so brilliant part, even if politics is mean by nature. 7. Watch Your Mouth: Again with the clichés that still hold true – if you don't have anything nice to say, then don't say anything at all. Steve Rubel learned the hard way that stream-of-consciousness blogging can have you saying something you wish you hadn’t. Transparency doesn't mean total access. 8. Don't Be a Fake: Who do we dislike most in civilized society (aside from the violent)? Liars, cheats, and thieves. We don't like them because we view them as betrayers. That principle applies online, too, when your network discovers you're not what you say you are. And the mob's wrath is one that is hard to endure. Ask Edelman PR about their Wal-Marting Across America campaign. 9. Mind Your Manners: Mom's favorite Bible verse still applies: "Do unto others as you would have them do unto you." Commonly referred to as the Golden Rule on Earth, in Cyberspace, manners and etiquette are becoming increasingly more important. People are getting angry about anonymous drive-by (rude) commentary, salesy and useless comment spam (spam in general constitutes harassment in some form)…the list of ethics and etiquette violations is a long one, so it's probably best to ask yourself: Would I appreciate this if it were done to me? 10. Stay Hip. Right now, MySpace, Facebook, Wikipedia, and YouTube are essential, but they're still relatively new. Few really saw SecondLife coming as a virtual marketplace. Still yet, only the early adopters are talking about Twitter. But change online is swift, and the smart marketer keeps up with what's hot. The last thing you want to do is look outdated. Just don't sell out your core identity in the process. While that's just ten guidelines out of many, Mom always had one rule that ruled them all: Use your head, dodo bird! This is a thinking man's game. Indeed it is. Good luck with your campaigns.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Resolving A Conflict Between Two Sales Staffs

Make Small Commitments. Get Big Changes.

How do you keep it together on a daily basis?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.