The Role of Human Resources

The Role Of Human Resources

in Companies Considering Downsizing

Laura Shamburger

BUSA226

The role of Human Resources (HR) has been evolving for some time. Shifting from

"personnel" to "human resources", for example, was part of the movement to

acknowledge the value of employees as an institutional asset. The shift in label was

accompanied by the challenge of HR to become a strategic partner with the leaders of

business contributing to significant business decisions, advising on critical transitions and

developing the value of employees. In other words, HR now has an important seat at the

table. This has never been more evident than now, in a climate of mergers and

acquisitions, corporate bankruptcies, outsourcing and downsizing.

David Ulrich, in his book, HumanResource Champions: The Next agenda for Adding

Value and Delivering Results (1997), provides a clear approach in terms of outcomes

for which HR should be responsible including strategy execution, administrative

efficiency, employee contribution, and capacity for change. He also describes four

corresponding roles for HR to play within a business: as a strategic partner working to

align HR and business strategies, as an administrative expert working to improve

organizational processes and delivering basic HR services (hiring, terminating,

benefits management), as an employee champion (listening and responding to

employee needs) and as a change agent managing change processes to increase the

effectiveness of the organization. We can now add to these the role HR has been

undertaking to mitigate the effects of downsizing and finding ways for corporations to

avoid this action, while still being able to improve the economic conditions of that

company. May. www.siop.org

This paper will deal with companies whose HR departments have become true

partners in crafting business policy to this end. It will also explain some of the programs

HR has developed to meet the needs of those employees still employed in a company

whose only choice was to downsize.

Once a phenomenon associated mainly with an individual company in distress or large

economic downturns, downsizing is becoming a fixture in the global business

landscape. Job shedding is driven by a number of factors such as rapidly evolving

technologies and business cycles, and pressure to improve stock performance as well

as an increasing number of mergers and acquisitions. However, studies have shown

most companies fail to realize the anticipated gains from downsizing and incur

substantial costs of choosing this path to improve the "bottom line". Employers are

just now beginning to realize that reductions in the workforce are not always a sound

strategy for the long term.

Companies are recognizing the benefits of utilizing their Human Resource

departments to structure and implement "responsible restructuring" programs to

include business practices that will avoid the need for layoffs and embrace training

programs that will redeploy "redundant employees" to different jobs within the

company, as well as develop other innovations. They recognize that when

downsizing is the only option, Human Resources is critical to reducing potential

problems by developing fair severance packages, transition services for those being

downsized and above all making sure communications between management and

labor is open, honest and timely. In order for the company to recover from an event

such as reduction in the labor force, Human Resources must take great care to give

adequate attention to those employees who are still with company. Nadkarni,

IndianNGOs.com

The recognition of "survivor syndrome" is a critical function of Human Resources

and they are key to developing