In an ongoing effort to ‘repair’ profit margins, many businesses – both corporates and SMEs – could be using redundancy as a way to tighten their belts and let go of employees. Whilst this downsizing is vital for most companies to navigate through this uncertain economy, I have begun to wonder what irreparable cost this activity is causing for the productivity and work quality of the other employees at the company? Necessary roles that form a pivotal part of the day to day operations or customer services of the company are disappearing.

Let me give you an example, there is a local venue where my daughter likes to visit a few times a week for extra-curricular activities. So much in fact that for the past 2 years we have bought the annual membership as it worked out cheaper for us. When COVID-19 hit, this venue closed in line with government regulations. They recently reopened, much to the excitement of my daughter. We have visited that place twice in the past week and each time I was surprised to see the number of staff was significantly reduced in comparison to what they had before. The staff members who had managed to hold onto their job were now working single shifts of 12-hoursper day. The level of engagement between the staff and the visitors had dramatically changed. The once lively, energetic and loud team had become quiet, exhausted and boring. Again, I raise the question what effect will this downsizing of the team bring to the company?

When organisations make certain roles redundant, the impact on the rest of the organisation, the ‘survivors’ if you will, can be devastating. Research has shown that after people in a company have witnessed redundancy happening around them, the overall performance and efficiency of the company plummets, ultimately leading to a drop in the organisation’s productivity. In many cases, redundancy can severely undermine a business’s human capital.

Large organisations, as a result, are now looking at unqualified support teams as a fast and easy way to downsize and save costs. Whilst this may seem like a quick and easy solution, in fact it causes more harm than good. Aggressive cost saving in the short term will make the company struggle in the long term without these vital support roles playing their part in the day to day operations and service delivery.

Whilst the roles are redundant, the tasks these employees perform are most certainly not. The work still needs to get done. Who is doing that work now? In my experience one of two things happens, either the work gets done by under skilled and already overburdened team members or does not get done at all. So, cost saving in the short term really will affect the overall output of the business.

Today we hear more and more about large organisations looking to outsource work that until now was all done inhouse. This not only saves huge amounts on cost; it also allows the remaining team members to focus on what they do best and let the outsourced team provide support in the area of expertise they have.

Outsourcing is not limited to only large organisations anymore; many SME entities are now opting for outsourcing as it helps them manage their budgetary and support limitations with ease. When an SME hires a virtual assistant to handle all their mundane and ancillary functions, it ensures an efficient and seamless support system for the company. To aid in gaps caused due to downsizing, a company can outsource all their administrative activities to save cost and time while freeing up the management to focus on their core business activities. This will also result in the rest of the employees having a sustainable amount of workload and hence they will be able to contribute happily and effectively towards the business’ recovery. Win-win situation for all.