Managing Shortages and Surpluses in HR strategies

“Discuss the implications and pros and cons for managing surpluses and shortages using the various strategies Strategies for Managing Shortages Recruit new permanent employees Attempt to reduce turnover Work current staff overtime Strategies for Managing Surpluses Hiring Freeze Layoffs Employee Training If a surplus of employees is anticipated, a critical strategic issue that must be addressed is whether this surplus is expected to be temporary or permanent. The most extreme action to reduce a surplus is to lay off employees. Layoffs should usually be conducted only as a last resort, given the effects they can have on the morale of remaining employees as well as the significant economic costs that often result from large-scale layoffs. Surpluses can also be addressed through early retirement programs, transfer, and retraining of existing employees, and/or an across-the-board reduction in salaries or working hours. Exhibit 5.3 summarizes some strategies for managing employee shortages and surpluses. Shortages are discussed in more depth and detail in Chapter 8, while surpluses are discussed in Chapter 13.