Downsizing in any business is generally not viewed by employees or management as a positive practice, although it can result in many positives, such as staying in business, cost savings and business strength. Managers are loathe to be the ones to carry out the process and typically leave this unwelcome duty to human resources professionals. Company downsizing can cause rising stress levels and increased workloads for HR departments. With knowledge and skill, however, HR can successfully navigate through workforce layoffs.


More than at any other time, during periods of layoffs your HR personnel are tasked with maintaining employee morale. As workers see others leaving the company, they may need more attention and assurances about the security of their jobs. In administering to departing employees, HR staff members must call on fairness and compassion. Human resources professionals must also ensure there is equity in the layoff selection to avoid the appearance of favoritism as some employees retain their jobs while others do not. HR must take into consideration the percentages of those being dismissed who are designated as part of legally protected minority groups.


Human resources management is affected to a great degree with the issue of staffing after layoffs. When business is short staffed, management may be tempted to overschedule employees. HR is charged with making sure there are enough employees to cover shifts and adequately perform the tasks necessary to keep your business running. This translates to overseeing scheduling, monitoring hours and regulating overtime to remain in compliance with labor laws. Additionally, when union employees remain employed, HR must maintain any job and safety restrictions imposed by the union.

Compensation and Retirement

One avenue some businesses follow during the course of downsizing involves salary freezes. HR personnel may be required to oversee and track such freezes, and administer salary reductions. Some employees may be asked to take early retirement as a business cost-saving measure, and human resources staff members manage these voluntary terminations, which could involve the administration of increases in pensions, continued health benefits and other payouts.

Unemployment and Reemployment

Employees departing as a result of layoffs may be eligible for state unemployment benefits. Human resources staff members experience an increase in paperwork created by maintaining accurate records supporting unemployment claims. As business levels rise, HR is obliged to begin filling open positions by arranging for the rehire of past employees, as well as engaging in new recruitment, interviewing and general hiring activities.