Question

Identify two strategies that an organisation can adopt, when faced with a surplus of human resources. Discuss advantages and disadvantages of each strategy.

Answer 1

Answer:

Strategies to handle surplus human resource:

1. Buyout or early retirement: Employees with seniority can be offered early retirement and interested employees may opt for the buyout helping the organization to reduce surplus human resource.

        Advantage

• Reduces the employees with high salaries resulting in cost cutting.
• Present employees who will be getting those positions will bring new energy and increase their morale.

        Disadvantage

• This strategy involves removing the most experienced employees first.
• The organization may have to offer some good offer to buyout which might not be cost effective method.

2. Stop outsourcing: Contracts of outsourcing can be end and transferring the responsibilities to the excess human resource.

Advantage

• Makes the organization self-reliant and this method can be very cost effective
• The organization need not to lay off any employee.

        Disadvantage

• This strategy can be cost effective only if excess employees have the same skills and pay rate as the outsourcing company.
• The organization would be required to reevaluate all the excess employees and determine which one is suitable for which job which is long process in case vacant positions are to be filled quickly

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