Role of HR- at the time of downsizing



Change in economic situation impacts organizations and when economy go down companies suddenly start focusing on cost cuttings. Whenever thought of cost cutting comes in mind of management- the first cost they want to cut is the manpower cost. Downsizing is a challenge for HR. No one like to handover pink slip to employees but someone has to do it for sustainability of business.

Unfortunately, HR needs to do this work.  As HR person, it is your responsibility to ensure that downsizing is done in such a way that it does not impact organization adversely, at least ensure minimum impact.

Through this blog post sharing some of the things, which I have kept in mind, while performing this task. This may help you.


Maintain confidentiality-Publicity is not required

Such decision should be kept confidential and should not go outside board room. Only concern department heads should be aware about it. They should be informed to maintain confidentiality of this drive. If it is public, it will be very difficult for organization to handle it as every person will feel insecure which can lead to attrition of even those employees who you don’t wish to get separated.


Poor performers should be first in the list

Well, HR along with managers should identify employees who are not doing well. If you have a matured performance management system in place then this task will be simpler and you will have a ready list of employees who are not performing well.

To know more about how to build a matured performance management system, you can go through my following blog posts on mature performance management system. There are 5 parts of this blog post. So ensure you should go through each post one by one.

How to Build mature performance management system without any automation software? -Part 1

Part 6- Five Essence of mature performance management system to make it successful.

Once you have list of such employees ready, you can start communicating mentioning their non performance.

Many a times, organization gives pink slips to employees who have joined recently but I believe it should not be on basis of employee DOJ (Date of joining) but on their performance level. So a big NO to LIFO (Last in First Out) during downsizing.


Review processes at micro level

Downsizing is not the easy time for organization, hence everyone need to put extra efforts to help organization come out from this tough time. If, even after, taking action on poor performers, further downsizing is required, then HR along with Process department and manager should review each and every process of departments and get rid of activities which are not essential for business process. There are many activities which are value add. There are some reports which are being created for sake of creation and no action taken by anyone. Hence this is the time to get rid of such activities and reports.

This will save time of team members involved in doing such activities and further chance of reducing manpower without impacting vital business operation. Although, this will not going to come out as an action which can reduce huge manpower cost but will surely reduce some. These value added activities can be implemented again once business comes in good shape.


Workload Analysis of each and every team member

This is the right time to do workload analysis of each team members. This should be done in such a way that it should look like routine work. HR and manager should be equally responsible for this exercise. In fact, this exercise will also help you to find out un-necessary tasks and you can take decision to avoid or postpone it.

Basis time spent on each task and workload of team member, HR along with manager, can decide how to distribute work to further see possibility of reducing manpower. As HR has broader perspective of organization, knowing workload of team member of other departments, can help in inter department work distribution.


How to handover pink slip to employees

Next challenge is to communicate employees. It is surely not an easy task for either HR or manager but it has to be done. I would suggest that both HR and manager should be present while communicating this to employee.

In first phase, when you are asking poor performers to leave, then keep your discussion around performance of employee and let employee know that it is better for both employee and organization to get separated. There should be no dialogue on downsizing.

In rest phases, you have to inform employee about present financial health of organization and why these steps are necessary to safe organization. Avoid using negative words during talk.


Help such employees in all possible way

This is not at all easy situation for such employees. They are not ready for this. Many employees have financial liabilities to take care. It is our moral responsibility to help these employees in all possible ways, even if you have to go out of box.

First of all, ensure that you get approval from management on some extra notice pay, other than what is mentioned in appointment letter, to support such employees. This will be a great help to them as they will get some extra days with pay to search new job.

Secondly, relieve such employees early by fast tracking relieving and handover process so that they can get time to find a job for them.

Thirdly, you can use your contacts to find job for them. In fact, you should ask managers to use their contacts to help such employees. Remember, one telephone call of yours, can help to employee to get a job and will be a great help.

Proper communication is essential

HR needs to keep an eye on all types of talks going on in groups-both informal and formal during this phase. Informal tasks should be given more attention. Obviously, you don’t want to loose your good performers hence you need to keep communicating with every team member, as and when required. If grievances in mind of employees are not addressed at right time then organization could end up loosing good performers and may impact organization image.

This may also lead to unwanted legal cases against company and may waste organization time and money in handling such cases. You need to ensure that such legal cases are avoided by talk.


Please do share your inputs and experience.



  1. Marian September 6, 2013 4:17 am  Reply

    Put across with great propriety, additonal process and procedures bulleted would be welcome. Thank you!

  2. Delvin September 8, 2013 1:19 pm  Reply

    This in fact is very important now with so many uncertainties in today global environment. However, it is always the SMES that could not react positively due to the lack of Human Resource Management skills. As a result, many retrenched employees either felt angry or devastated.

  3. September 18, 2013 6:44 am  Reply

    very useful information,thanks a lot

    • govindsinghnegi September 18, 2013 3:22 pm  Reply

      Dear Rahima, Thanks for your appreciation

  4. govindsinghnegi September 18, 2013 3:23 pm  Reply

    Dear Delvin, Do agree. Thanks for sharing your views here.

  5. Sarita Pareek September 24, 2013 11:46 am  Reply

    Dear Sir,Please provide me some more links from where i can learn more about HR.

  6. Sarita Pareek September 25, 2013 4:54 am  Reply

    Sarita Pareek

    Dear Sir,Please provide me some more links from where i can learn more about HR.

    • govindsinghnegi September 25, 2013 6:00 am  Reply

      Dear Sarita, There are many blog post written on this platform on various aspects of HR. Please let me know specific topics you are looking for.

  7. Sarita Pareek September 25, 2013 11:19 am  Reply

    Thanks Sir,
    There is no specific topic i am looking for, its just i want to learn more & more about HR. In fact i have made my id in but unable to see ur blogs. Please tell me there where to find your articles & also tell me if u r available in any other forum?


    • govindsinghnegi February 26, 2014 6:08 am  Reply

      Dear Raj,

      thanks a lot for your appreciation.

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