the new hr

etrenchment
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Diligent organisations promptly reaches all the
who value their
employees. We genuinely value
their talent and potential, and
employees try to
hence consider retrenchment as
avoid retrenchment to a drastic step. For a long time
the maximum.
now, we have not faced any
stressful situation that demanded
a reduction in workforce. But if
we see any negative signs, we start looking at areas
where we can cut costs without jeopardising our
employee wealth. As a first step, we would then
stop hiring and make do with those on the rolls.
Maintaining and managing the right size of human
capital is a critical piece of business diligence that
helps fend off a situation in which one has to tamper
with human resources.
Any layoff strategy should factor in the danger of
dumbsizing—a drain of personnel with knowledge
in niche areas—which could impact productivity
adversely. The criteria should be carefully chosen—
it could be either people who have served the
organisation for long and hence have a fair degree of
financial stability, or youngsters who can easily find
new jobs. Also, the process should not be individual
centric, one that amounts to pinpointing a person’s
shortcomings/inefficiency. Due respect should be
attached to the dignity of individuals; it is a difficult
moment surfeit with emotions and care should be
taken to not dent their self-confidence.
ABOUT THE AUTHOR
Mohit James is
Director, Human
Resources,
L’Oreal India.
The downside
Whatever the reason may be, a downsizing exercise
often reflects badly on the image of the company
involved. It causes a lot of resentment among
employees—fear psychosis spreads and many feel
they could be the next target; voluntary turnover
rates too could go up considerably. It is then the
responsibility of HR to spread a sense of procedural
fairness and justice, and reassure employees of the
security of their jobs and to boost their morale.
The retrenchment strategy should be structured
in such a way as to avoid any feeling of ill-will
among those who are forced to leave as well as
those who have been chosen to continue. For
example, VRS could be a logical step for a factory
facing the problem of significant overstaffing due to
technology adoption. Planning a decent severance
package and sharing savings with those who
remain with the company could make both sides
happy. Such measures go a long way in reassuring
employees of their relevance to the organisation
and the value attributed to their skill sets.
Diligent organisations who value their
employees try to avoid retrenchment to the
maximum. One way to do this is to streamline
work—for instance, outsourcing a function to a
partner who can do it better and scale it up. At
L’Oreal, handling customer care is a herculean
task since we operate in the beauty products
segment. Instead of adding to our headcount, we
have tied up with a call centre specialised in the
area. Most queries get answered at that level while
a small team at our end manages communication
that demands more expertise.
‘People’ are the most important resource of an
organisation, the firm foundation of competitive
advantage. So tread cautiously while downsizing—
missteps could deplete your employee wealth and
dent your brand image.
(As told to Anitha Moosath.)
26 INDIAN MANAGEMENT NOVEMBER 2015