Down-sizing Proposal for Artemis Sportswear Company
Introduction
In order for any company to have high productivity and greater profit margins it has to cut its operational costs. One of the main operational costs in any company is labor. The reduction of labor’s operational costs in order to realize profits and productivity is referred to as down-sizing. Down-sizing is a permanent down-scaling of the work force with no intentions of re-hiring in the future.
Artemis down-sizing proposal
Artemis sportswear profit margin has a lot of pressure arising from the cost of goods sold. The anomalies in the cost of goods sold originate from high labor costs. Therefore, for Artemis to realize a higher profit margin it has to cut down its labor costs. As a business Artemis labor costs can be down-scaled by down-sizing the labor force so that the company can compete with other sportswear companies. There are two options when considering down-sizing, these options include down-scaling the direct domestic labor costs or relocations to cheaper labor zones or countries. The most appropriate strategy for Artemis would be to cut down its direct domestic labor costs. hus termination may ultimately affect production which will in turn reduce the profit margin.
Thus to avoid such a scenario Artemis should consider other alternative methods of down-sizing that will cut labor costs and use termination only in cases where it cannot avoid the situation (Manson, 2000). The most befitting alternative techniques for down-sizing in Artemis may include, providing incentives that will encourage employees to take early retirements. This will include send off packages with high amounts of money that can encourage employees to go off into business after their early retirement.Artemis could also use natural attrition (organic downsizing) as a means to down size. This method involves letting go employees that leave for other jobs or die without hiring employees to fill the positions. Thus, naturally the company’s work force will reduce naturally. Therefore, in effecting natural attrition Artemis should freeze any employee replacements (Allen, 2009).Alternatively, the company can contract labor cheaply and avoid having a large employee number. Contracting is a cheaper option because it avoids expenses incurred in providing employee benefits such as vacations and health insurance.
The company could also use voluntary redundancy as a means to downsize. In this method Artemis will have to offer attractive financial incentives that will allow volunteers to leave the company at their own will.Redeployment can also be applied by Artemis as a means of downsizing. In the use of this process employees are reassigned to work in other new or expanding branches so as to reduce the number of employees in established branches (Wolfe, 2010).Another option would be to introduce job sharing. Artemis can survey for multi-skilled employees who can take up positions that require the combined skills. Thus the combination of the skills of two employees into one can allow the company to eliminate one job position. This combination will cut down on unnecessary posts within the company and reduce the number of laborers. The use of these methods will be best for Artemis because they will have less negative effect on the remaining workforce. Thus, the use of these milder means of downsizing will ensure the workforce remains productive (Manson, 2000).
References
Allen, J. (2009). Natural Attrition: The organic way to downsize a company. The online Houston Business Journal. Retrieved on 15th May 2010 from, http://www.bizjournals.com/houston/stories/2009/02/16/smallb4.html
Manson, J. B. (2000). Downsizing issues: the impact on employee morale and productivity. London, UK: Taylor & Francis Publishers.
Wolfe, L. (2010). Alternatives to consider when Downsizing. Retrieved on 15th may 2010 from, http://womeninbusiness.about.com/od/managingemployees/a/layingoffalts.html
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