They face the problem of having to investigate the new KSAs required to find re-employment." What firms could have down was to lend support for acquiring new skills. They could provide employees with appropriate training from time to allow them to gain new skills that would have helped after termination. Or they could simply help them understand that they would need new KSAs and help them acquire them during the downsizing process. Even worse can be impact on the families of terminated employees. When firms fail to invest into human resource support and building, this results in serious shock not only for the terminated employee but also his family. Citing a research, the author argue that wives of such employees suffer too but are often neglected. The research finds that they are often "ignored as a victim of the job loss experience. They contend that a wife progressively experiences shock, anger, shame and embarrassment, anxiety and fear, depression, stress, betrayal, and, finally, guilt at feeling all of these. These are only some of the effects that wives actually experience along with their husbands and family after a husband's job loss."

The authors have also focused on the effects of downsizing on surviving employees. They contend that when human resources are not properly developed and not much is done to make the criteria or the downsizing process clear, it can result in damage to surviving employees as well. This we must not forget later affects organizational goals and objectives. Citing literature available on the subjects, the authors explain that "survivors are usually not informed or are misinformed about many issues, such as their place in the newly structured organization,...

These are further compounded by financial and job insecurities."
The authors feel that when companies fail to invest in resource building, they are only hurting their own cause. This happens when the employees find themselves in a tricky situation. They do not have a clear idea why they survived the downsizing process and constant job insecurity may actually rob them of any feelings of loyalty of commitment they might have had towards the organization.

Some steps that a firm can take should include "re-defining and rewarding success, changing the meaning of job security, encouraging career self-management, and engendering a new kind of loyalty and commitment to the organization." Other important steps would be making the criteria fair and clear since "a major factor influencing the effects of terminations on survivors is their perceptions of how fairly the decisions on terminations were made and how these were handled." Any human resource manager would know that downsizing is a negative process but it need not turn into a huge failure both for the employees and the organization. If important measures are taken towards human resource building, then the firm can go ahead with organizational restructuring without worrying about complete organizational collapse.

Reference

Steven H. Appelbaum and Nadia Labib. Strategic Downsizing: A Human Resources Perspective. Human Resource Planning. Volume: 16. Issue: 4. 1993. 69+.