The downside of downsizing

For decades, corporations and small businesses alike have gone to great lengths to streamline policies and workflow in efforts to be as efficient as possible – and, of course, to spend less and possibly make more profit.

When we first encountered the impact of COVID on the business world, and much of the world was in lockdown, many businesses again went through processes of depending more on technology and attempting to accomplish more, or maintain current production levels, with fewer employees.

When supply chain and economic issues began impacting virtually every segment of our economy, they often resulted in businesses not having the materials needed to produce or repair whatever their company was focused on. The natural response was to downsize by either eliminating positions, not replacing employees who had left the work force and in many cases, asking more of remaining employees but not being able to compensate them for their additional efforts.

A bleak reminder of the severity of the situation was reported by the U. S. Bureau of Labor Statistics in April of this year when the organization released statistics showing that in March of 2022, more than 2.5 million American employees worked fewer hours in the four weeks preceding the survey due to employers either losing business or closing permanently. On a positive note, however, a similar survey conducted in February 2022, showed more than 4.2 million workers had fewer hours – of which 3.3 million employees did not receive their normal compensation.

For many larger companies, efforts to streamline have typically resulted in increased profits for the company and in the case of publicly held corporations, increased dividends paid to investors. However, for smaller companies, streamlining can sometimes result in negative outcomes if the process has left companies with a limited number of employees who have very specific job duties and responsibilities.

Under ideal situations when all employees are in good health and willing to do whatever it takes to accomplish the company’s goals and objectives, streamlining works beautifully for all and provides both employer and employees with a sense of stability and pride that together they can accomplish more with less.

However, when staff members have very specific duties that others may not have the skills or knowledge to perform and just one member of a team becomes sick or unable to work for other reasons, maintaining productivity becomes a major challenge for all.

We may soon see a return to situations in which employees have to be generalists who can perform a variety of tasks rather than specialists with limited areas of expertise.