Involuntary Downsizing: The Impact of a Labour Shortage
Labour shortages are imminent in a variety of different industries, particularly those that require high levels of skills. Organizations will need to plan for these shortages as many of the solutions will have fairly long lead times before an impact is felt. One area from which short-term gains may be achieved is the reduction of voluntary turnover, particularly the loss of productive employees. An area with potential for longer-term success in combating the labour shortage is in restructuring. Through restructuring, organizations can redesign the work processes so that when employees do leave, the position will have to be reworked and a replacement may not be needed. The organization will be shrinking in headcount, but it will remain as productive as it was before downsizing due to efficiencies gained; it will have successfully navigated "involuntary downsizing". The purpose of this paper is to develop the concept of involuntary downsizing" by expanding the definition of downsizing to include situations in which organizations are competing in diminishing labour markets. Similar to the current concept of downsizing, organizations will need to accomplish more, with fewer resources; however, the cause of the downsizing and the solutions that are available will be different.
Pyper, Rhonda L. (2007). Involuntary Downsizing: The Impact of a Labour Shortage. Sprott Letters, April(2007).