ECONOMICS

THE HIGH COST OF DOWN-SIZING - A POLICY NEEDING REVIEW?

Introduced by speakers from the Institute of Management, Bath & Austin Knight plc on 13 November 1997

A new body established in June, The Employers' Forum of Age' has been critical of the craze' for
down-sizing - cutting staff - regarding the policy as counter-productive and expensive.
Two organisations linked for this campaign for reversal have been the British Institute of
Management and Austin Knight, a long-established employment and communications company.
There had been a major recent example where a company had shed staff and then been unable to
cope with an up-turn in orders. Could this fashion, often promoted by business consultants, be changed?
The visitors recognised that a new feature of recent recessions had been redundancies amongst middle
management and work now needed to be done to overcome the shortcomings of such a policy.
Austin Knight in their advisory role sought to promote new management skills to deal with low
staff morale and stressed to clients the need for good internal company communications.
Mr Bryant, Chairman of the Institute of Management, Bath, had seen many current problems in the
Health Service develop whilst he was Chief Executive at the Royal United Hospital for ten years. He had
developed a study of fear as an important factor in staff morale, and how this might be overcome.
A recent report by the Audit Commission on Local Government staff had high-lighted the high
number of officers taking early retirement on health grounds. This had come about through pressures
arising from down-sizing.
In general, the meeting saw no easy solution to these problems. Rapid technical change was a
major factor.

Rodney Tye