Is Downsizing the Right Decision?

When times are uncertain looking at options to improve the bottom line is front and centre; here we discuss if downsizing is the right decision.  
Downsizing is often the first thing to be discussed.  Leaders who are managing in uncertain times are navigating a range of issues.  It doesn’t take long for staff to feel insecure, which can add to the pressure.
We recommend reviewing these key areas when leading in uncertain times:

Be Transparent:

Despite restrictions easing, job uncertainty is still at an all time high. As a leader, it’s your responsibility to continue to provide clarity to your team about how their roles will change. Set expectations about the coming weeks and months. Put a post COVID plan in place and make sure it is circulated in advance with your team so everyone has the opportunity to discuss it and make suggestions. Provide updates on how the year is progressing or concerns you may have, your employees may be the perfect people to find ways to improve your bottom line or productivity. They will feel included and less like they are being kept in the dark.  

Your people are your greatest asset:

Try to retain your employees where possible. This not only ensure you are equipped to succeed when the market bounces back but will also leave you with a loyal hardworking team. If you need to consider a reduction in staff speak to them about other options such as reduced hours, reduced days or long service leave etc. There may be another alternative to letting them go. 


Consider all possible alternatives to redundancy. You may be able to retain people by changing operations or even suppliers/technology. Reduced wages for a defined period, pay freezes, introducing sabbatical leaves. Get creative, connect with your business partners to see if they need extra staff due to increased operations? Not all industries are suffering at this time. 

Regular Meetings:

Schedule regular catch- ups with staff and give them the opportunity to voice their concerns. Demonstrating accessibility, honesty and emotional intelligence has never been more important. It is a sign of good leadership to have an open communication channel and an approachable style.  Make your staff feel like they are part of the journey rather than passengers on a ride. People worry when they are left to their own imaginations so informing the employees and asking them for suggestions is the best way to ensure engagement. 

Do the Sums:

It’s important that you look at the all the financials, do some comparisons in leaving things as they are or downsizing. Look at the full picture and the tax, payroll, financial implications of keeping the status quo vs downsizing your staff pool. Get financial advice but remember great staff are hard to come by so an alternative solution could be the best thing for your business. 

As we are in uncharted territory with the pandemic and economic fluctuations your organisation should be aiming to maintain communication, have empathy and sensitivity towards employees and their concerns and create a supportive environment. 


Reach out to us at Recruitment Central, we are here to offer advice and support on how to come out of this with your team standing beside you.

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