Workforce reduction strategies to reinforce your staff

Let’s face it: it’s impossible to turn workforce reduction into a pleasant experience for a company and its employees. Even though you can’t change the events that force you to reduce the workforce, you still can choose smart workforce reduction strategies to sustain your employer brand and cause minimal stress to employees. In this guide, we gathered five simple and budget-friendly staff reduction strategies to try and extra tips to save workforce costs.

The concept of rightsizing is straightforward. It’s an approach to keeping just the right number of employees: in-house staff, contractors, freelancers, non-essential workers, etc. Moreover, rightsizing implies accumulating the proper headcount and the right skill set to cover the organization’s business needs.

In the context of workforce reduction, rightsizing can’t be used as a quick fix. It’s a gradual process that involves thorough workforce planning, the decision on upskilling and reskilling, natural attrition, and casual layoffs of underperformers.

Ideally, rightsizing must be implemented through strategic workforce planning. With strategic workforce planning tools, HR managers can simulate workforce scenarios, mitigate risks, forecast accurate headcount, optimize workforce structure, and more.

Read more about the concept of rightsizing, its benefits, and best practices in our guide to rightsizing.

During uncertain times like pandemics, hiring new people is a luxury. That’s why a hiring freeze, or simply put, temporary hiring suspension, could be a lifesaver.

A hiring freeze was a popular workforce reduction tactic during the COVID-19 outbreak. For example, in March 2020, the number of job postings in the US decreased by 24% compared to the same period in 2019. To survive through turbulent times, companies froze hiring non-essential workers and non-priority positions.

This method has its benefits. First, a hiring freeze doesn’t evoke so much negativity as layoffs and furloughs. Second, this staff reduction strategy doesn’t hurt your employer brand in a way that other harsh methods do. Finally, a hiring freeze allows HR managers to re-evaluate their hiring strategy to rightsize their organization and upskill current employees to fill the positions with internal talents.

59% of L&D professionals surveyed for LinkedIn’s Workplace Learning Report claim that reskilling and upskilling are their top priorities. This trend gained traction since the pandemic hit as a response to snowballing changes in economics and labor conditions.

Reskilling and upskilling are healthy alternatives to layoffs as you can keep your employees, retain them with learning and development initiatives, and still fulfil your business goals. Just like with rightsizing, upskilling and reskilling require a long-term commitment. You don’t get quick results off-hand. But when an unexpected crisis hits, you’ll be able to keep your business afloat and retain the key talents by introducing them to new roles and responsibilities.

If layoffs are inevitable, try temporary layoffs to let go of your workforce for a specific time. Each company specifies its terms of temporary layoffs. For example, you can provide full pay, half-pay, or no pay at all. As a rule, employers suspend employee benefits and bonuses during a temporary layoff as well.

A general rule while temporarily laying employees off is consistent and clear communication. For example, a timely notice with employee guidelines and the exact date when you’re going to bring an employee back to work significantly reduces speculations and employee uncertainty. Also, it makes sense to specify possible risks like an eventual layoff (if it’s possible), contract termination, redundancy, etc.

Do you remember those good old times before COVID, when you had a chance to get together at the office on a Friday night, enjoy some pizza, play table games, and laugh? What a luxury of personal communication it was. Yet such activities would involve staff like event managers and office managers to plan parties and organize every step.

In a new reality, keeping people employed to organize offline events is surreal. Therefore, laying off non-essential staff is an option. Suppose you want to follow a healthier approach to letting off your non-essential workers. In that case, you could consider options like transferring to a new role, rotation among departments and branches, or combining responsibilities.