No-Layoffs Policy vs. Downsizing: The HR Implications

Limestone College Business

When a company is going through downsizing or attempting to find ways to sustain its employees, human resource professionals play a significant role in alleviating some of the difficulties associated with this process.

Layoffs or corporate downsizing is typically considered as an extreme measure companies are forced to take to cut costs. In such instances, human resources professionals are often involved from the start. Their intimate knowledge of internal talent resources and company’s talent needs helps them advise senior management on strategic decisions such as how to determine criteria for eliminating positions. Similarly, their expertise in labor relations makes them well equipped to handle difficult employee communications needed to ensure smooth exits. HR also plays a key role in helping to maintain morale and productivity, particularly post downsizing.

In addition to HR’s role in helping to manage layoffs, they are often just as involved in helping to prevent them. A recent Harvard Business Review article, “A No-Layoffs Policy Can Work, Even in an Unpredictable Economy,” discussed how a company’s commitment to keep its employees is not only the responsible thing to do but can also be sustainable…with the help of HR.

Chris Van Gorder, CEO of Scripps Health — a non-profit system of five hospitals and 25 outpatient clinics in San Diego — says his company has not laid off anyone since he joined 15 years ago. Despite a shifting economic climate, Scripps Health has been able to offer job security to all of its employees by doing a few things a little differently. For example, the company rarely hires from outside, and when certain positions are eliminated, employees go through the Career Resource Center where they are able to train for other open positions within. By utilizing human resource expertise, Scripps Health has created a workforce redistribution mechanism that helps prevent layoffs.

Limestone students pursuing a bachelor’s degree in human resource management are taught a number of courses that prepare them to handle many aspects of corporate downsizing. For example, BA 311 Staffing and Labor Relations exposes students to all aspects of labor relations including legal issues, forecasting, job analysis, assessment of candidates and staffing evaluation.

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