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Losing experienced people

in Cost Reduction

Do you believe that making experienced staff redundant would help your organisation achieve cost reduction goals? There are many arguments for and against this stance and it can be a tough decision when a company is faced with cutting their cost base significantly.

On the face of it, the last to go in an economic downturn situation should be the highly skilled, experienced resources as they will (should) be:

  • of great, demonstrable value to the organisation
  • and would cost an immense amount to replace when things get better

However, if the company has downsized, unlikely to grow to the same level again and clearly has a staff cost which is too high for its size then action must be taken or the business will eventually die. I see many companies who suffer through not taking decisive action on staff costs when they should do. It is better to have retained some highly experienced manpower than for the business to fail and no jobs.