Wednesday, July 14, 2010

Downsizing through attrition.

Webster's definition: "Attrition: a reduction or decrease in numbers, size, or strength: Our club has had a high rate of attrition because so many members have moved away."

Downsizing through attrition has been around for a long time. Somebody quits, retires, or gets let go at your office. Rather than replace them, their duties get divided up among the remaining staff, and it's back to business as usual. Sort of.

I can see the motivation behind this sort of approach. Rather than laying people off, you're reducing payroll and employee benefit expenses by simply not filling these new job vacancies. Why, in these difficult economical times it's really the proper fiscal thing to do. Tighten your belt, everybody pitch in, that sort of thing.

What kind of a message does this sort of staffing policy send to your team? I've seen this strategy destroy morale and productivity. Yes, it's better than layoffs, but in most cases, surviving employees feel dumped on and while they're happy to still have a job, they're not going the extra mile or doing the things needed to generate new ideas and revenue. People start doing the bare minimum... crossing I's, dotting t's and punching out. Going through the motions.

Rather than just dividing up those duties, I'd rather see companies promote from within wherever possible. If you fill your staff with as many good people as possible, you'll already have people in position to take on new duties and fill new roles as they become needed. Move that over-qualified guy from the kitchen to the sales team! See my blog post below for more on this...

If your situation makes it impossible for you to fill vacancies created through retirement, etc, with new hires, a better plan might be to restructure your staff when these kind of situations arise. Use your existing staff resources in new ways, rather than just dividing up old duties, or piling on more work on the "lucky" people still employed.

Move duties around, change focus where applicable, make lemonade with the lemons you still have. The old org chart may not work anymore! Create a new title or position, shuffle duties, and get all your tasks done in a new way that makes sense. You may end up improving productivity and morale when you go at the situation with a new perspective!

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