Staff Restructuring in the New Economy

Abstract

In times of recession, survival for most businesses means to do more with fewer resources. It is necessary to encourage policies that will help a company to become more efficient, like staff restructuring. This policy encompasses many decisions, from laying people off to relocating employees to other positions as a consequence of the deployment of a more rational structure, which in turn answers to a change in strategy caused by the turn in the environment. This chapter explains the concept of staff restructuring in detail and offers several methods to carry it out. Afterwards, the potential problems that may arise from implementing this strategy are discussed, and, finally, some clues on how to avoid such problems, or, at least, mitigate their consequences, are presented. It is also made clear that a short-term approach in this regard will lead to a future lack of competitiveness, and therefore, endanger long-term survival.

Staff Restructuring

“…Two studies can be mentioned as illustrative of these different results being obtained in various situations (Fernández Sánchez, 2006;and Fernández and Manresa, 2012) which precisely confirmed that for firms located in Spain during the periods 2003-2005 and 2008-2010. Results improved with any of type of restructuring, regardless of whether they were measured subjectively (according to managers' opinions) or objectively (based on the economic data corresponding to organizations). Nevertheless, another study in the same field -though referring to the period 1995-2001-identified negative results (Muñoz-Bullon and Sánchez-Bueno, 2010).…”

“…Our study performed in 2005 (Fernández and Manresa, 2012) revealed that the most frequently used practice had been the non-renewal of temporary contracts, followed by preretirement and voluntary redundance with incentives, and by recruitment freeze. Moreover, this was precisely the combination or configuration of practices which had appeared the most repeatedly.…”

“…Before finishing this section with an explanation of the way in which restructuring is implemented, it seems important to us to establish a definition of the term that includes and summarizes all the authors' ideas. In the light of everything that has been analyzed, staff restructuring can thus be defined as "the process by which each employee is allocated to the most suitable position, so that the skills and capabilities of individuals can be jointly exploited to the full; this may or may not imply changes in the organizational structure and a reduction in staff size" (Fernández and Manresa, 2012).…”