Effects of Downsizing
Downsizing has been known by several different names, in the late 1970's and the early 1980's it was called reduction-in-force, as of late it has been called restructuring government, privatization, contracting out and last but not least downsizing. "In the public sector it is called "privatization". In business it is called "downsizing. Otherwise it's known as "contracting out." Code words change but the intent is the same." (DIAF 99) Public governments seem to think that using Downsizing, privatization or contracting out are the best ways to balance or cut money from the budget. In actuality the worker is being hurt in his economic pocket. Downsizing, privatization, and contracting out have caused the workers
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Federal, state and local governments are using downsizing as a means of saving money and balancing the budget. At the same time the government is cutting back on jobs and freezing positions, the government is equipping themselves with the latest advancement in technology. The money spent on upgrading this technology could save several jobs. Technology is important and should be updated on a regular basis but not at the expense of someone being without a job.
"Over the past five years, downsizing has wiped out hundreds of thousand of jobs, disrupted the lives of employees and changed the face of employment. (C&EN 1996) Globalization, consolidation, computerization and diversement have resulted in dramatic changes in employment. College graduates are finding themselves in jobs that once were held by people with only a high school education. The jobs that are being created today are lower paying jobs requiring little or no basic skills. To get the higher paying jobs you will need a Masters Degree or higher.
President Clinton envisioned downsizing as going hand in hand with the reinvention of government. Clinton's administration determined that streamlining government could render a couple of hundred thousand positions thought to be important as unnecessary.
These positions consisted of clerks, budget analyst, and management positions. Downsizing is also a means to eliminate unproductive workers with little or no backlash from employee unions. Reducing
In today’s society, a college degree has become a requirement in order to obtain a well occupied profession. Prior to the recession, which the study defines as the period between December 2007 and June 2009, bachelor's graduates were already more likely to be employed than were associate degree holders, who were more likely to be employed than those without any postsecondary degree. After the recession, employment of college graduates dropped 7 percent, while associate degree holders experienced an 11 percent drop, and employment of high school graduates fell 16 percent. The percent of people excluded from the workforce, meaning they were seeking work but couldn’t find it, rose 31 percent for college graduates, 37 percent for high school graduates, and 50 percent for associate degree graduates, though associate degree holders were still excluded at a lower rate than high school graduates (Tilsley, 2013).
Supporters of getting a college degree often point to the statistics that college graduates earn more than their high school educated peers over a lifetime. Statistics by the U.S. Census Bureau reports that since 1977, “Adults with bachelor's degrees in the late 1970s earned 55 percent more than adults who had not advanced beyond high school. That gap grew to 75 percent by 1990 -- and is now at 85 percent.” A gap of an 85% pay difference is a huge figure and a clear reason why college is a great option for some people. But there are problems with that figure because when the number of college graduates who are either unemployed or underemployed is taken into account it changes the value of the statistic. In an article by Businessweek’s Richard Vedder we get statistics to counter that argument. He tells of how the number of new college graduates far exceeds job growth in technical, managerial, and professional jobs where graduates traditionally have searched for employment. As a consequence, we have underemployed college graduates doing jobs historically performed by those with just a highschool education. He says we have “more than 100,000 janitors with
Companies can just settle for fewer profits by absorbing the increase cost of their current labor supply instead of dismissing workers. This is one method might be the least popular method and the least used by firms. Using this approach decreases the company’s net profit. This method should only be used by firms in a strong financial position and there is no other approach that can be used.
1. How do you evaluate this approach to workforce reduction? What (if anything) did Abbott do right and what did he do wrong? What additional information do you need about the downsizing effort in order to fully understand the process?
As we have seen in recent years downsizing in the face of economic difficulty is becoming a larger and larger threat faced by today’s workforce. A libertarian is someone who would determine if something was ethical by asking if a situation upholds or promotes liberty for all who may have rights. In terms how a libertarian would view downsizing we would first have to determine what rights we need to examine.
Getting a “good” job is not straightforward as it used to be. In past generations, someone in an entry-level position could work their way up the ladder simply through hard work and determination; whether or not one had credentials or a diploma mattered very little. This is not the case today. Higher education is now critical to obtaining a better job because the demand for skilled labor is rising. For this reason, the value that a degree offers is higher than that of one’s actual intelligence or merit. Furthermore, workers without college degrees will quickly be outpaced in position and salary by degree
To maintain the excellent services and infrastructure enjoyed by the City of Urbanopolis, it is vital to ensure that the budget meets the demands of these services and infrastructure. Since most of the budget is tied up within labor payments, this should be the first focus of restructuring in terms of budget. It is therefore important to find a way to better balance the budget so that vital equipment and infrastructure requirements can be met. The request for new computer equipment, for example, has been denied, and the department is obliged to work with second-hand and/or outdated equipment. This, in turn, affects the way in which the department is able to function, which is not effective or acceptable in the long run. Several positions have been identified for elimination in the new financial year. However, my policy for restructuring human resources budgets is to match the skills and enthusiasm for each job description with the potential elimination of the position. Hence, my policy will be to change the description and statuses of some positions to maintain employees who have shown themselves to be worthy of their positions while either negotiating with or eliminating the positions of those employees who have not.
Many jobs recently are requiring people to have at least a bachelor’s degree to even consider someone for a position. Now jobs are beginning to want people who have a master’s degree instead; for example “between 1973 and 2008, the share of jobs in the U.S. economy which required postsecondary education increased from 28 percent to 59 percent. According to our projections, the future promises more of the same. The share of postsecondary jobs will increase from 59 to 63 percent over the next decade” (Carnevale, pg 1). With that being said it seems more important know than ever for people to have a college
In today’s society, employers look for workers with college degrees because they know what college students are capable of doing. Employers now hold their employees to a different standard compared to the 1900s. Back then, employers did not mind the level of education a person had because being educated was not as common. However, now that society has progressed, more and more people have the same level of education: a high school diploma. Today, employers want to hire someone that
He mentioned that most of the entry-level jobs require at least high school credentials. Especially due to today’s current economic conditions, many individuals are forced to take employment that, at one time, was given to people without a high school diploma. In addition, Tyler & Lofstrom (2009) expressed that recent graduates have lower unemployment rates and higher employment rates.
Have you or someone you know ever been replaced or laid-off from a job due to a downsizing? With technology becoming ever popular in today’s world chances are your answer to that question is YES. If you, yourself, have not been replaced there is a very high possibility that someone you have become acquainted with over the years has been. In this age of rapidly advancing technology, humans just simply are not needed to complete certain jobs as they have been in the past. Of course, there are still jobs available that a machine just simply cannot do but most jobs have since succumbed to modern technology and
Downsizing is never easy on the Human Resource department. In fact, if not handled properly, it could be detrimental to the overall organization. Here are some challenges that come along with downsizing: Addressing the shifting morale and needs of the surviving employees, maintaining the productivity and profitability of the organization, and retaining skilled, and qualified employees.
A corporation needs to have a strategic plan in place in order for them to be able to implement a downsizing. There are many pros and cons to downsizing and it has a ripple effect on everyone in the corporation. Depending on the planning of the downsizing, one of the big issues to decide on is how to choose who will be terminated. For example, do you go by seniority, a percentage from all departments, an entire department, or by job level or position? These are major options that need to be addressed before anything happens. Most corporations today exist less for the well being of employees than they
Downsizing has become a commonplace strategy for organizations to adopt in an effort to cut costs, eliminate redundancies, and streamline organizational systems. Over the last 15 years, many organizations have engaged in downsizing more than once. Most companies have learned from the mistakes of the past, but some companies are still trying to use the same tactics today that were used in the mid 1980s, that leave employees reeling.
|companies adopt practices that eliminate or reduce potential problems, including open communications, fair severance |