Monday, June 28, 2010

How do you reduce manpower if there are 16000 employees in an organization?

Reducing Manpower
Three primary methods, layoffs, atrition or early retirement bonuses. Unfortunately, layoffs end up causing more problems than they are worth. People tend to start looking for jobs when they see their co-workers get laid-off. Attrition just allows people to leave without hiring someone else to fill the spot. Necessary positions are re-filled from within the company.

Attrition and early retirement take a little longer, but give the employees much more confidence in the company, and end up with valuable employees staying.

Increase management to staff ratios:

Increase employee to employer ratio:
In an organization of 16,000 employees, there will be many levels of management with in the organization. If the organization were to assign lower level employees to any one manager, they would then be able to reduce employee numbers. This is where middle management has its problems during recessions etc.

For e.g. (NB: unrealistic and oversimplifying):
If a company has 128 employees to manage and each manager in the organization has 2 people under them, the organization diagram will look like this: 1 > 2 > 4 > 8 > 16 > 32 > 64 > 128. This means that there is 8 tiers in the organization, and most importantly, 126 managers looking after 128 workers.

As opposed to having a structure where each manager looks after 4 people, again with 128 workers, the structure will look like so: 1 > 4 > 16 > 64 > 128. In this case, there is only 5 tiers, and only 84 managers looking after 128 workers.

This difference of 42 managers is a huge reduction in the workforce. As seen, to do this the organization must demand more from management, which could be done through a number of ways like training or higher wages. But in doing so, the manpower required in an organization will be greatly diminished, especially the larger an organization is, i.e. 16,000 employees.

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