In tough economic times such as we are currently experiencing, organizations are desperately seeking to reduce their costs. It is not surprising therefore, when they announce cuts in their headcount.
But a key factor in this equation is how these organizations managed, or mismanaged themselves to this level of desperation. Companies that announce large scale cuts are trying to make a statement that they will be leaner, meaner and more profitable to their shareholders. Are they truly?
Factor This In...
If they are a well managed company, why do they have so many positions that they can eliminate in a short amount of time? Well managed firms should constantly be assessing both the competency and the productivity of their workforce. Second, who will do the work of the displaced employees? Will those remaining merely need to do more or will less get done resulting in either reduced services to the customer or lower overall productivity? Do they have a plan to outsource services or better utilize technology for productivity enhancements? Will it achieve greater efficiency or get an acceptable return on investment? The fallacy is that headcount reductions do not necessarily improve an organization.