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Is Downsizing A Result Of Poor Hr Decisions?

1076 words - 4 pages

In this essay I will be arguing that Downsizing is not a result of poor HR decisions but company's HR departments can take measures to try and avoid downsizing, such as forecasting. There are many external influences that cause downsizing but there are also measures that can be taken in order to minimize downsizing and the distribution of redundancy packages. (Heery, E & Noon, M, 2001)Some external influences include Political, Legal, Environmental, Technological, cultural, Demographic, Social, and Economic. Some of these are not only unforeseeable but unavoidable and can cause major budget cuts for large organizations resulting in massive layoffs.A good HR team should be able to predict a future decline in sales and be able to take measures such as reducing the number of new employees that they take on in the first place so once there is a decline in sales they can avoid mass downsizing or take on another approach such as job sharing, cutting back overtime hours and sharing it around or disengaging contractors and flexible workers in order to look after their permanent staff.Downsizing is caused for a number of reasons such as the hangover of a company to different owners who may demand immediate layoffs, Privatization (a government organization changed into the hands of private owners) they will immediately cut costs starting with labor costs and the demand for the product decreases therefore not needing as many production hands.There are also the external Influences such as Technological, this will increase productivity and decrease the number of workers needed but will also create new jobs example, March 2007, Holden downsized 600 jobs as a result of new production robots creating more efficiency, Government laws change (higher award rates for workers or higher penalties), Economic Changes (in a recessive period there isn't the demand for the product or shares in the company therefore not getting the support or funding needed), Social (a possible push from unions to increase wages could cause mass lay offs in order to be able to afford the wage increases) and Environmental (the growing concern for the environment may force companies to switch to a more energy efficient production method or even cutting down production altogether causing lay offs). (Dessler, G, 2000)These are all out of the control of the Human Resources Department. However there are ways of knowing what's around the corner and preparing yourself accordingly therefore in instances like the massive layoffs at The GM Holden Ltd, Elizabeth Plant in South Australia in which employees were asked to volunteer for redundancy packages with Government help in order to avoid mass layoffs however this did not have any affect what-so-ever and still were forced to layoff 15 % of the employees at the plant. Holden had recently spent over 1 billion dollars updating the plant therefore the HR department were well aware of the mass layoffs and the decision they would be faced with. Also...

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