Research Briefings are a service from BC HRMA’s research group. The aim is to make it easier and quicker for HR professionals to find and apply the latest and best people management insight to their challenges and projects.

Forced layoffs and restructuring have become common strategies for companies struggling to compete. However, these approaches rarely achieve key company objectives such as cost reduction and increased levels of efficiency, productivity, profitability, and competitiveness. A broad range of research shows that HR professionals play a key role in enabling their organization to restructure effectively and achieve cost or productivity objectives without creating unintentional organizational costs.

Many organizations start the process of layoffs with a view of reducing their overall costs. What 35 years of research has shown is that this goal is never achieved. The approach that needs to be taken is one of refocusing the business on a new way of being successful and then aligning resources to achieve this goal. This can mean fewer people and less overall cost, however this is not the sole goal of the restructuring work.

The full research briefing outlines the complex dynamics that prevent forced staff layoffs from being a successful short-term cost saving approach. It also outlines ways in which HR can support their organizations to reduce overall staff costs without the unintended, negative business impacts that have been demonstrated as part of this approach.

The implications of the research briefing are that leaders need to consider the people and skills implications of their cost reduction strategies before they start implementing them. Linked to this is the need for HR to be well-versed in the process by which people support the business in order to play an effective role in these decisions.

Read the full briefing.