Question

what are some ways that an organization can deal with a surplus of employees? for each that you identify, note its advantages and disadvantages.

Answer 1

Some of the ways to manage surplus employees are:

- Avoid outsourcing- The tasks or activities that have been outsourced can be given to the surplus employees to tackle the current situation. However, the disadvantage is that this strategy might not be permanent and the company might seek for outsourcing in future. This results in lack of trust between the company and the outsourcing agency. The advantage is that the employees have new roles to continue in their tenure.

- Retraining- The surplus employees can be provided retraining to meet other department’s needs. The redistribution of employees across the organization leads to improved skills for the employees. The disadvantage is that some employees might have difficulty with few departments such as technical where there is vacancy.

- Stop hiring- For large organizations, the hiring can be freezed temporarily until all the surplus employees are effectively placed in the organization. The advantage is that the surplus employees will be reduced gradually as they get placed in different departments. However, the disadvantage is that the company might not foresee the shortage of the talents which might arise due to acquisitions, mergers, etc.

- Pay cuts- Surplus employees are a burden to the company. Hence, to compensate for the cost to the company (CTC), the company has pay cuts for such employees until they are placed in a role. The advantage is that it saves cost for the company. The disadvantage is that the employees might seek other jobs which results in an increased attrition rate. It also decreases the morale of the employees.

- Layoffs- This strategy should be last resort of the organization to handle surplus employees. The advantage is that the company can reduce the cost considerably with immediate effect. However, the disadvantage is that it loses trust among other employees who are with the organization.