There are so many topics about scaling or boosting revenue stream but not many discuss about the other side of entrepreneurship, which is the possibility of recession. It is possible for your small business to go through various challenges that makes it more plausible to recede instead of forcing itself to keep moving forward with financial tailspin. It doesn’t mean you failed because you do it for a better cause of your business and the entire organization.
How to transition downsizing process seamlessly
Downsizing business is done to reduce operational cost and labor expenses. It may simple but in the process, it can be mentally exhausting. You need to fully understand why and when taking the decision to downsize. It is true that downsizing often taken as the last resort for ongoing financial hurdles. However, it still needs to be done carefully and thoroughly through effective communication, transparency, and understanding.
Make clear plan while laying off employees
You need to determine which positions that make sense to eliminate by considering the objectives markers of employees’ skills and performance. keep this process balance and don’t let everyone in a department go since it can affect the future of your business negatively. Turnover affects your employees’ morale negatively. Hence, make sure to acknowledge their skills, performance, and effort.
Secure your business’s future
Downsizing is a temporary solution because you will still face another challenge along the way as its aftereffect. Hence, you need to plan strategies to secure your business’s future. You may have to tighten your business’s everyday spending, renegotiate existing contracts, or delay your investment initiatives.
Ask for advice
Many business owners have gone through downsizing experience. Hence, you may want to reach out to them and ask for advice for a smooth transition. Or, you can also seek out some advice from professionals with the right expertise. Their insight will help guide you walk through the right steps. Hence, you will hopefully be able to bounce back rather fast.
Be transparent
When downsizing, you may have to lay off some of your employees. This kind of decision is not easy to make especially when your employees have been working with you for so long. It is best to be honest with them and be transparent with your answers. Choose your words carefully so you stay honest without causing any mass hysteria.
Organize HR responsibilities
Laying off some employees mean more HR responsibilities to organize. Have your internal HR department or an outsources HR service to perform HR responsibilities. On the other hand, make sure that terminated personnel receive their final paycheck and know their rights.
Let your team know that you are affected too
Your downsizing measure must affect your employees and business in general. And it will look absurd if you as the business owner is not affected at all by the changes. It is important to show your team you are in trenches with them. It can be a smaller office, reduce compensation, or any other sacrifices.
