4 Reduction in Workforce Best Practices

What is one best practice for reducing your workforce?


To help you follow best practices when reducing your workforce, we asked CEOs and founders this question for their best insights. From reskilling and upskilling to being professional and respectful with layoffs, there are a number of approaches that may help you reduce your workforce when needed.


Here are four best practices for workforce reductions:

  • Reskill and Upskill
  • Minimize Expenses and Layoffs
  • Promote Existing Employees Instead of New Hirings
  • Be Professional and Respectful With Layoffs


Reskill and Upskill

59% of L&D professionals have found out that reskilling and upskilling are the leading priorities for reducing your workforce. This trend achieved maximum traction since the pandemic hit as a response to snowballing transformations in labor conditions and economics. Reskilling and upskilling are the best practices for layoffs, as you can retain your employees with learning and development initiatives by remaining towards business goals. Similar to rightsizing, this practice needs a long-term commitment. You can keep your business afloat and sustain the top talents by introducing them to new responsibilities when an unforeseen crisis hits.

Caroline Lee, CocoSign


Minimize Expenses and Layoffs

One best practice for reducing your workforce is to ensure that you are doing everything possible to minimize expenses and layoffs. This means looking for ways to cut costs without damaging the company’s ability to function or produce products or services. It also means being proactive in terms of downsizing. For example, if your company is expecting a slowdown in sales, you may want to begin planning layoffs and other cost-cutting measures to be ahead of the game rather than reacting afterward. Finally, it’s important to be compassionate and fair when implementing layoffs so that former employees feel like they were treated fairly and with respect.

Natalia Brzezinska, PhotoAiD


Promote Existing Employees Instead of New Hirings

Because your sole objective is to reduce the workforce, consider promoting existing employees rather than hiring new ones. Hiring new employees to fill new roles is costly, time-consuming, and frequently challenging. Good workforce planning enables you to predict roles and promote and train existing employees to fill those roles as they become available. Working to provide employees with opportunities for advancement and continuing education helps boost morale and company loyalty because they will know that if something is going on, you want them to be a part of it.

John Tian, Mobitrix


Be Professional and Respectful With Layoffs

The #1 Best Practice is to be professional and respectful in all aspects of reducing your workforce. Communicate in person when you can, both with the impacted employees as well as those that are remaining. Provide a generous transition package for those that are leaving including additional compensation, paid benefits continuation (COBRA), and transition assistance (e.g., resume writing, interview training). Depending on your business and the economy, you may want to re-recruit those same employees in the future if the business picks up again. The remaining employees are intently watching how you treat the exiting employees, and it will have a major impact on whether they decide to stay or leave.

Scott Baker, Stage 3 Leadership



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