Layoff and Employees Essay

Submitted By grady4
Words: 1036
Pages: 5

Basu (2012), “rightsizing is the strategic response of a small or large business to changes in business and economic conditions” (para. 1). Rightsizing deals with the reduction in workforce and operating expenses to keep a balanced cash budget operating within a company. Companies’ analyze their cost structures based on the amount of work the company has and the availability of employees. Many times it requires companies to adjust their staffing levels and costs to avoid a reduction in their revenue. This can be detrimental to a company if their budget is not balanced based on the revenue and employees it has to operate. InterClean has made the decision to merge with EnviroTech to create the largest company in the sanitation industry. The merger enables InterClean to maximize its sales goals and increase its revenue. Customers will be presented with a vast amount of solutions to their sanitation problems by merging the products and services of both companies. This can be a major concern for customers and would help to meet their ever-growing expectations. InterClean will be required to train and educate employees on governmental regulations to ensure their compliance with the industry standards. Employees of both companies must be aware of the goals and mission of InterClean to ensure they align with the expectation of the employees from EnviroTech. Employees should be knowledgeable and experienced in how the products work and how well the products will help customers needs. InterClean will need to direct its focus of rightsizing to the skills of their staff and how knowledgeable they are in performing their jobs. According to Gallup (2012) rightsizing is done to “gain control of payroll costs and to maximize returns on wage expenses” (para. 1). InterClean would look at the expenses in gaining additional employees from EnviroTech and make the decision to right size based on the amount of work the company will have for all employees. Rightsizing occurs when organizations are looking to reduce costs and because labor costs represent a huge part of a company’s total costs” (Noe, Hollenbeck, Gerhart, & Wright, 2008 p. 192). Because the company is merging with another company, there may be changes to technology based on the way labor was previously done. The company may believe because they will use more machinery to process jobs, not as many employees will be needed with the new company. The decision will be based on the employees who have the skills and know how to conduct the jobs and get the job done. InterClean can create multifunctional teams with employees from both companies. This will create a more productive and creative workforce and not require extensive training across different regions of the company. Managers will be provided with training on how to handle the teams and provide feedback and development that may be required as a result of the merger. Rightsizing may not always be the best option, depending on what cost analysis is done to determine the needs of the company. Rightsizing cause risk to companies to lose valuable and skilled employees. Voluntarily rightsizing occurs when employees leave because of the new direction of the company. Rightsizing can be emotional on many employees because they will be concerned with the future of the company and where they fit in. Many employees decide to seek employment elsewhere for fear they could be laid off in the future if the company decides to take a new direction. Companies can alleviate the pressure employees feel by communicating to them the direction of the company and providing them with continuous training to further advance their skills. This will enable them to move to other areas internally. InterClean can offer employees the option to take furlough days and still be active employees. InterClean can look to offer early retirement packages to employees close to retirement. This can help to avoid downsizing the…