Downsizing Human Resource
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Human Resource Management (HRM)
Due to the recent world financial crisis, many business firms and corporations closed becase they cannot sustain anymore the high inflation of high prices through low income and high expenses such as in labor expense, ect. because of the stiff competition of many companies. The only solution found out by the management of different firms is to have a recession and decrease their manpower so that the company can sustain and survive.
There are companies were affected last 2008 global financial crisis and one of these companies is the FedEx Corporation (Global). FedEx is well known because of its global services such as the FedEx Express in which it delivers cargoes and baggages of customers throughout the world. Here is an online magazine (ProcurementAsia Mag) which covers about the huge loss of FedEx,
There are companies were affected last 2008 global financial crisis and one of these companies is the FedEx Corporation (Global). FedEx is well known because of its global services such as the FedEx Express in which it delivers cargoes and baggages of customers throughout the world. Here is an online magazine (ProcurementAsia Mag) which covers about the huge loss of FedEx,
| Quote: |
FedEx Post Huge Loss, Outlook Gloomy By: Jerrel Yun, Singapore Global - FedEx announced a huge loss in the previous quarter, as consumers and businesses downsized shipments and the company took over approximately US$1.2 billion in one-time charges. FedEx lost US$876 million, in the three month period ending in May, compared to a US$241 million loss a year ago. The company took a US$900 million write-down for its 2004 purchase of Kinko's Inc - now known as FedEx Office - and US$90 million in charges for the acquisition of Watkins Motor Lines in September 2006. It also took charges for employee severance and facility cutbacks. In addition, FedEx's operating performance continued to be restrained by the global recession, which resulted in lower shipment volumes at FedEx Express and FedEx Freight, the company said. Revenue for the fourth-quarter fell 20% year-on-year from US$9.87 billion to US$7.85 billion. The company foresees difficult operating conditions in the near future. "The operating environment for our first two quarters in fiscal 2010 is expected to be extremely difficult," Alan Graf, executive VP and CFO of FedEx said. The company said Q408 revenue at the company's Express arm fell 25% due to a contraction in freight volumes and a rise in fuel prices. In the freight segment, revenue dropped 28%. However the company's ground segment did comparably well, with revenue dipping approximately 1% year-on-year. FedEx said that international package volumes improved in the fourth-quarter compared to the quarter before, which could signal that the financial slowdown is levelling off. "There are signs that the worst of the recession is behind us and we remain optimistic that we will see quarter-over-quarter economic improvement later this calendar year," said Frederick W. Smith, chairman, president and CEO, FedEx Corp. In a conference call with analysts, Graf said the company hasn't yet decided whether it will have to layoff more workers or make further cut backs because of economic conditions, reported AP. "That is a question that's going to play out during the year," Graf said. "We have hiring and wage freezes, basically across the board. We have suspended our 401(k) contributions. If the economy turns up and we start to see the growth that we think we will get, we will start to repair those reductions," said Graf. |
And because of this huge loss happened to the FedEx Corporation, at first they downsize their human resource but time came the CEO of the FedEx decided to close their company. Last year, the FedEx-Philippines had their last cargo flight to China and had their farewell party.
There are many reasons why an organization may need to lay off employees in the current business environment that includes mergers and acquisitions, outsourcing key operations, and eliminating less-than-optimal business lines are just a few. However, at the heart of any layoff decision is the need to remain financially viable and competitive both now and in the future. It can therefore be tempting to continue the cost-saving measures as you select an outplacement services provider for your downsized employees. However, the choices you make can seriously impact your company’s reputation and profitability in the future, warns Sharon Winston, regional senior vice president and general manager of leading career services company Lee Hecht Harrison’s San Jose office.
Winston notes that in outplacement, there are no real shortcuts. "There are many paths, but they are each a climb, and anyone who tries to convey something different is misleading you."
Winston recommends that human resources professionals and senior management teams develop a system for evaluating potential outplacement providers that takes into consideration the quality of the program and the overall capabilities of the provider company. "Management teams need to realize that every former employee will likely talk to at least six people about the experience," says Winston. "That’s a lot of exposure. And if just one of those former employees feels badly enough to sue you, it will be a costly event. Taking the time up front to select the right outplacement provider can save money in the long run."
With that in mind, the experts at Lee Hecht Harrison suggest five criteria to consider when choosing an outplacement services provider:
BUSINESS BACKGROUND
Look for a firm with solid business experience and a proven track record. Be sure that the people who will service your account have experience working in the business world. If you are looking at a boutique firm or a company that focuses only on the local market, consider whether or not they have the depth and breadth of experience to handle candidates who may need to pursue a national job search.
CONTINUITY
Your employees are all business people; therefore, it makes sense that the outplacement package you purchase should be based on project management principles, like milestones, team meetings and individual accountability. This will allow each employee to jump into the job search quickly, without having to take the time to learn how the program itself works. It’s also important to ensure that each employee will be assigned a job search counselor who will remain with him or her throughout the process. Be cautious of the "bait and switch." The team you meet during the selection process should be comprised of the people who will actually provide services to your employees.
NOTIFICATION TRAINING
A good outplacement provider can help managers craft both the specific message and the tone in which news of the layoff should be delivered. Notification training ensures that all managers follow the same process and have the opportunity to ask questions before, rather than during, the event. This can help reduce the company¹s legal exposure. Don¹t assume that your managers know how to conduct themselves during a layoff. Managing a downsizing isn¹t a repetitive task, and your leadership team may not have extensive experience delivering the news.
ONSITE ORIENTATION
Your outplacement provider must be able to provide initial onsite services to downsized employees immediately after the notification. These employees need an opportunity to vent and assistance in formulating their next steps, including how to notify their families. A good outplacement provider can offer a highly facilitated opportunity for employees to express their feelings and give options to deal with the situation in a positive way. Without this guidance, it’s impossible to gauge how individuals will handle the time between the notification and leaving the property.
LEADERSHIP DEVELOPMENT
After a layoff, business doesn’t slow down to accommodate the smaller workforce. Instead, organizations must quickly regroup, re-identify themselves, shift key management roles and find new ways to move forward. An outplacement provider should be able to work with individuals and management teams within an organization to help them assimilate into the new corporate structure and develop key leadership competencies. This kind of coaching can have a tremendous impact on the company’s ability to remain productive after a downsizing.
Winston notes that in outplacement, there are no real shortcuts. "There are many paths, but they are each a climb, and anyone who tries to convey something different is misleading you."
Winston recommends that human resources professionals and senior management teams develop a system for evaluating potential outplacement providers that takes into consideration the quality of the program and the overall capabilities of the provider company. "Management teams need to realize that every former employee will likely talk to at least six people about the experience," says Winston. "That’s a lot of exposure. And if just one of those former employees feels badly enough to sue you, it will be a costly event. Taking the time up front to select the right outplacement provider can save money in the long run."
With that in mind, the experts at Lee Hecht Harrison suggest five criteria to consider when choosing an outplacement services provider:
BUSINESS BACKGROUND
Look for a firm with solid business experience and a proven track record. Be sure that the people who will service your account have experience working in the business world. If you are looking at a boutique firm or a company that focuses only on the local market, consider whether or not they have the depth and breadth of experience to handle candidates who may need to pursue a national job search.
CONTINUITY
Your employees are all business people; therefore, it makes sense that the outplacement package you purchase should be based on project management principles, like milestones, team meetings and individual accountability. This will allow each employee to jump into the job search quickly, without having to take the time to learn how the program itself works. It’s also important to ensure that each employee will be assigned a job search counselor who will remain with him or her throughout the process. Be cautious of the "bait and switch." The team you meet during the selection process should be comprised of the people who will actually provide services to your employees.
NOTIFICATION TRAINING
A good outplacement provider can help managers craft both the specific message and the tone in which news of the layoff should be delivered. Notification training ensures that all managers follow the same process and have the opportunity to ask questions before, rather than during, the event. This can help reduce the company¹s legal exposure. Don¹t assume that your managers know how to conduct themselves during a layoff. Managing a downsizing isn¹t a repetitive task, and your leadership team may not have extensive experience delivering the news.
ONSITE ORIENTATION
Your outplacement provider must be able to provide initial onsite services to downsized employees immediately after the notification. These employees need an opportunity to vent and assistance in formulating their next steps, including how to notify their families. A good outplacement provider can offer a highly facilitated opportunity for employees to express their feelings and give options to deal with the situation in a positive way. Without this guidance, it’s impossible to gauge how individuals will handle the time between the notification and leaving the property.
LEADERSHIP DEVELOPMENT
After a layoff, business doesn’t slow down to accommodate the smaller workforce. Instead, organizations must quickly regroup, re-identify themselves, shift key management roles and find new ways to move forward. An outplacement provider should be able to work with individuals and management teams within an organization to help them assimilate into the new corporate structure and develop key leadership competencies. This kind of coaching can have a tremendous impact on the company’s ability to remain productive after a downsizing.
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