With al the data collected and forecasts done, an organizational plan can be developed.

Such a plan can

be extremely sophisticated or rather rudimentary. Regardless of the degree of complexity, the
ultimately purpose of the plan is to enable managers in the organization to catch the available supply of
labor with the demand that is expected given the strategies of the organization. If the necessary skill
levels do not exit in the present workforce, the organization can train employees in the new skill or
undertake outside recruiting. If the plan reveals that the firm employs too many people for its needs, a
human resource surplus exits; if too few, an HR shortage.

MANAGING A HUMAN RESOURCES SURPLUS

HR planning is off little value if no subsequent action is taken .The action taken depends on the skill
hood of the human resources surplus or shortage. A surplus of the worker s can be managed with an HR
plan in a variety of ways. Regardless of the means, the actions are difficult because the workforce
reductions often are ultimately necessary.

Workforce reductions and the WARN Act: In the era of the managers, actuations and downsizing, many
workers have been laid off or had their jobs eliminated due to the closing of selected offices, plants and
operations. To provide employees with sufficient notice of such losses, a federal law was passed, the
worker adjustment and retaining notice (WARN) act. This law requires employers to give a 60-day notice
before implementing a lay off or facility closing that involves more than 50 people. However, part time
employees working fewer than 20 hours per week do not count toward the 50 employees. Also,
seasonal employees do not have to receive WARN notification. The WARN Act imposes stiff fines on
employees who do not follow the required process and give proper notice.

Workforce downsizing: It has been given many names, including downsizing, rightsizing and reduction in
force (RIF), but it almost always means cutting employees. Focusing on trimming underperforming units
or employees as part of the plan that is based on sound organizational strategies may make sense. After
a decade of many examples and studies, it is clear that downsizing has worked for some firms. However,
it is usually does not generate additional revenue and it only generates lower cost in the short term.
When companies cannibalized the human resource need to change, restructure or innovate, disruption
follows for sometime. Also downsizing can hurt productivity by leaving, “surviving “employees
overburdened and demoralized.

A common myth is that those who are still around after downsizing are so glad to have a job that they
pose no problems to the organization. However some observers draw an analogy between those who
survive downsizing and those survive wartime battle. Bitterness, anger, disbelief and shock all are
common reactions. For those who survive the workforce cuts, the culture and image of the firms as a
“lifetime” employer often are gone forever.
The need for downsizing has inspired various innovative ways of removing people from the payroll,
sometimes on a massive scale. Several different methods can be used when downsizing must occur:
attrition, early retirement buyouts and layoffs are the most common.

Attrition and Hiring Freezes: Attrition occurs when indivisuals quit, die or retire and are not replaced.

By use of attrition, no one is cut out of a job, but those who remain must handle the same workload
with fewer people. Unless turnover is high, attrition will eliminate only a relatively small number of
employees in the short run, but it can be a viable alternative over a longer period of time. Therefore,
employees may combine attrition with a freeze on hiring. Employees usually understand this
approach better than they do other downsizing methods.

Voluntary separation programs: Organizations can downsize while also reducing legal liabilities if
employees volunteers to leave. Often firms entice employees to volunteer by offering them additional
severance and benefit payments.

Early retirement buyouts are widely used to encourage more senior workers to leave organizations
early. As an incentive, employers make additional payments to employees so that they will not be
penalized as much economically until their pensions and social security benefits take effect. These
buyouts are widely viewed as ways to accomplish workforce reductions without resorting to layoffs and
individual firings. Some plans offer eligible employees expanded health coverage and pension benefits
to entice them to take early retirement.

Volunteer separation program’s appeals to employers because they can reduce payroll costs
significantly overtime. Although the organization faces some up-front cost, it does not incurred as many
continuing payroll costs. Using such pregame is also viewed as a more humane way to reduce staff than
terminating long service, loyal employees. In addition, as long as buyouts are truly voluntary, the
organization offering them is less expose to age discrimination suits. One drawback is that some
employees the company would like to see stay might take advantage of a buyout. Also, employers must
comply with WARN and other laws.

Layoffs: layoffs occur when employees are put on unpaid leaves of absence. If business improves for the
employers, then employees can be called back to work. Layoffs may be an appropriate downsizing
strategy during a temporary economic downturn in an industry. Nevertheless, careful planning of layoffs
is essential. Care must be taken to ensure that age and other types of EEO discrimination do not occur.

Companies have to legal obligation to provide a financial cushion to laid off employees; however, many
do. When firms do provide severance pay, the most common formula is one week of pay for every year
of employment. Larger companies tend to be more generous. Loss of medical benefits is a major
problem for laid off employees. However, under the federal Consolidated Omnibus Budget
Reconciliation Act (COBRA), displayed workers can retain their groups medical coverage for up to 18
months for themselves, and for up to 36 moths for their dependent, if they pay the premiums
themselves.

MANAGING A SHORTAGE OF EMPLOYEE S

Managing a shortage of employees seems simple enough- simply hire more people. Among the
occupations that currently are experiencing shortages are nurses, miners, truck drivers, and weldrs.
However, there are consequences to hiring full-time employees in terms of costs, benefits, and other
factors. Other options are available that should be considered before recruiting and hiring to fill a
shortage:
 Use overtime
 Add contingent workers
 Bring back recent retires
 Outsource work
 Reduce turnover

Where possible, the use of contingent workers or recent retirees is a possibility, although challenges
may be associated with option s. If that is not possible, two longer term possibilities are outsourcing
some of the work or trying to reduce turnover, which will reduce the shortage as well.