Chapter 22. Defining Staffing Reductions in a Strategic Context

As business and economic conditions fluctuate, companies sometimes find it necessary to reduce staffing levels. Organizations that are facing major downsizing (e.g., as a result of cost reduction efforts, mergers, or consolidations) are often tempted to look only at the near term when deciding which staff should be kept and which will be asked to leave. Decisions regarding the size (the number of positions to be eliminated), type (the kinds of jobs to be cut), location, and timing of the reduction are often made without regard to the company’s longer-term staffing needs. Often, these decisions are based on subjective criteria or somewhat arbitrary financial objectives, not staffing requirements. I have known of companies that have reduced staff to influence short-term profitability—and thus analyst expectations and stock price. While these downsizings meet their near-term targets by definition, they are usually shortsighted. Those seemingly positive short-term reduction decisions and actions can have significant negative longer-term staffing implications. In some cases, these implications are so severe that they negate the effects and intentions of the original reductions.

When consolidation or downsizing is required, it is far more effective to define short-term staffing actions within the context of a longer-term staffing strategy, as produced by the strategic staffing/workforce planning process. Often, implementing a pragmatic approach to strategic staffing can yield the high-quality results that organizations need and expect—and make the results of the downsizing stick.