Navigating Staff Reduction in Times of Financial Crisis: HR Professionals Role

Dear friends,

Due to the financial crisis, the CEO hopes to reduce staff. However, the line manager is not willing to decrease his staff. As an HR professional, what can I do?

If your organization is in a financial crisis and the reduction of employee strength is the only means to address it, then it is better to proceed with that. Otherwise, the burden of salary bills will exacerbate the crisis, ultimately leading to all employees losing their jobs.

As an HR professional, your recommendation should be to retrench the workers in accordance with the provisions of the Industrial Disputes (ID) Act. Provide them with a notice of retrenchment so they can seek alternative employment, along with retrenchment compensation.

Regards,
Madhu.T.K

Reduction of employees is not the solution because we have to find someone to replace them (if we take another step after the finance problem is over). That's another huge, time-taking venture and it also affects the organization financially.

My idea is: Better negotiate with your employees about salary reduction for a particular duration, maybe until your organization's finances are somewhat stable. Please note that the employees are also aware that the current job market is not favorable. If they are not accepting, go ahead and remove them.

Moreover, if the company's finances are too low, then there is no way out!

Thanks,
Anitta