Downsizing processes are extensive and complicated processes that can’t just be solved by following three simple steps.  At the same time, it can be worthwhile to reflect on certain elements that research and experience show are central in creating as good a process as possible.  Not the least because if reorganisation is not handled well, both the company and its employees will suffer from negative after effects long afterward.
 
Before discussing tips for downsizing processes, it is worthwhile to consider the reason for downsizing.  Often, the reason for downsizing isn’t obvious.  The reason for downsizing should be to build a foundation for future operations and development, and not have cost-savings as a goal.  It is crucial that downsizing is emphasised as a means, not as a goal.  When establishing new conditions, we have to change the way things are, or, as it has been said:  the object to of change is not to destroy, but to create.  During reorganisation, this means developing an organisation with the competence and capacity to meet the challenges ahead.
 
An extremely central element in good downsizing processes is planning.  The basis for a good downsizing process should be:

• A cohesive plan
• A plan where dialogue and communication are characterised by predictability and openness
• A plan where both the needs of the organisation and respect for those affected are clearly in focus

This type of planning facilitates communication, information, and openness, which are crucial elements for a successful downsizing process.  Mangers must ensure openness in these processes so that employees understand what is happening and why.  And if you, as a manager, don’t have a complete overview of what is happening, it is better to inform your employees than not to say anything. Uncertainty connected to downsizing can be extremely stressful for many employees, and that can result in an increase in absences due to illness and work related injuries.  Rumours and meetings behind closed doors can also impact negatively on work capacity.  Information and openness, along with involving employees will contribute to killing rumours and easing uncertainty, as well as contributing to increasing work capacity.  Openness can also contribute to employees being more inclined to accepting change. It has also been shown that open and good processes, where dialogue with employees starts early, leads to fewer labour lawsuits.

Companies that succeed with downsizing also focus on making the process fair.  It has been shown that employees can tolerate a lot as long as they experience the process as fair.  It is important that the criteria for potential dismissals are communicated clearly, so employees can understand the decisions being made, even if they don’t necessarily agree with them.

To achieve good employee communication and involvement, it is critical that line managers have a positive attitude and are focused on being open.  After all, it is the line managers who will have to meet with those employees who are being let go, and it is important that they focus on how to manage that difficult conversation well.

Along these lines, it is important that the organization focus especially on valuing employees during downsizing processes.  In Norway, we have regulations that ensure that as few as possible experience insurmountable economic problems during short-term unemployment.  The biggest problem during downsizing is a loss of dignity.  That’s why it is crucial that employees experience having a good support network in the workplace; both those who have to leave and those who are left.  Factors that contribute to employees feeling like they are taken care of and appreciated are first and foremost the manager showing empathy and informing and involving them.  For employees, it is important to be seen, while also feeling that the organisation is contributing to helping them along.

That’s why career realignment programmes are critical for good downsizing processes.  By having the opportunity to participate in career programmes employees experience that the organisation really wants take care of its employees.  These programmes can be experienced as a channel for frustration, anger, awareness, hope, and opportunity, while also contributing to illuminating the potential for developing the employee’s reorganisation competence further.

During downsizing processes, it is important that the organisation also take care of those left behind.  Often, their reactions are not considered, and that can contribute to a significant decline in productivity. Planning a downsizing process well must, in other words, include those who are left after the downsizing process has been completed; both when it comes to work content and work load, as well as feelings of guilt toward those who were let go. Again, openness and involvement are central themes.  At the same time, we also see that offering career realignment programs can have positive effects internally, in that dismissed employees feel well taken care of during a difficult process.

In today’s market, where reorganisation and downsizing have become permanent events, we see that organisations lack reorganisation competence. An increased focus on self management, and thereby reorganisation competence, is important whether downsizing is imminent or not.  Here, all of us are responsible, managers and employees alike, for increasing our focus on personal development and reorganisation competence.
 
As mentioned before, there is no shopping list for how to implement a successful downsizing process.  Most importantly, every organisation has to find out for itself how to make it work, and they need to plan the process properly – taking into account others’ experiences and best practice.  Good luck!

If you have questions, would like a presenter, or anything else, contact Anne Lene Andersen Watn, Consultant in Right Management ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it / 95055929). Right Management (www.right.no) is one of Norway’s biggest suppliers of career realignment programmes, and is a strategic partner for realignment processes.