The headcount reduction is a stress for the organization and it is much greater stress for the individual employees. The organization has to decrease the number of employees in the recession usually. The headcount reduction is announced, but the employees know just the total number and they do not know their position on the list.
The organization has to act quickly, when the headcount reduction is announced publicly to the employees. The decision about the headcount reduction is very tough for the top management, but the HRM Function has to act as the employee advocate and the full story should be told to all the employees.
The top management has to decide about the number of employees to be fired from the job, but the HRM Function and Finance have to prepare the distribution of the headcount reduction among different units in the organization.
Additionally, the HRM Function has to prepare the selection criteria as the guide for the managers and the basic announcement to the employees. The employees should understand, which agendas will be discontinued and how the managers will select the employees to leave the organization.
The HRM Function should propose the fastest possible approach to the headcount reduction. As the headcount reduction is a big stress to the organization and to the employees, the fastest approach in the reduction is the only suitable approach. The uncertainty of the employees is very dangerous for the organization as the employees do not focus on the performance and the job, but they focus on monitoring the managers, as they have to select the employees to leave the organization.
The HRM Function cannot forget the employees in the process of the headcount reduction. It has to promote the fastest approach, with the clear decision rules and the fair approach to employees.
