Retaining critical skills and talented employees during and after organisational downsizing

Abstract

Downsizing has become a common business practice as organisations attempt to maintain competitiveness and productivity especially with globalisation. Downsizing has negative effects on both affected employees and survivors and if not well managed could lead to survivor syndrome. Survivor syndrome creates negativity among survivors which results in low morale, motivation and lack of trust. These feelings increase the likelihood of survivors seeking alternative employment and subsequently leaving the organisation. The loss of staff especially critical skills and talented employees has direct impact on the organisation’s bottom line given the knowledge that is lost with the employee’s departure. Downsizing results in leaner structures which makes the organisation vulnerable when it losses critical skills and talented employees. This research report investigates how an organisation can retain their critical skills and talented employees during and after organisational downsizing. The research is a case study based on the downsizing process implemented in De Beers Consolidated Mines in 2005. The findings of the research indicate evidence of survivor syndrome in the organisation after the downsizing which led to the high employee turnover in 2006/7 years. The report makes recommendations based on a model which the organisation could implement to retain their critical skills and talented employees during and after downsizing.