Sales Team Restructuring: Alternatives to Layoffs and When to Consider Them

Every business can come face to face with the challenging task of sales team restructuring. This can prove to be a great alternative to layoffs which is the route usually taken by organizations when they may face inflation, budget issues among others.

The impact of layoffs are usually negative and may reduce employee morale, result in loss of productivity and also tarnish the reputation of a company. In such cases, sales team restructuring is a strategic alternative that can eliminate the negative impact on employees as well as your business.

Join us as we discuss the various options available instead of layoffs and how to determine the right approach for your sales team restructuring.

What are layoffs? Are they beneficial?

Most businesses opt for layoffs when faced with various issues like mergers or financial struggles. In layoffs, a certain number of employees are terminated resulting in the reduction of workforce. This is done in order to save costs so that the company is able to continue its functioning.

This process can provide immediate benefit to companies in respect to cost savings. However, they can leave a negative mark on the organization and also its employees. From financial stress, to loss of job security and motivation, employees face various problems. That’s why, in the long run, layoffs may not seem like a beneficial strategy for a company.

When should layoffs be considered?

Knowing when to consider layoffs is crucial for any organization to maintain financial stability and viability in the long run. Here are the reasons why you can consider layoffs:

1. Staff redundancies

Staff redundancies can be necessary when a company needs to reduce its workforce to cut costs or restructure its operations. Layoffs can be an option in this scenario as it allows the company to reduce its workforce quickly and efficiently. While it may be difficult, layoffs can help ensure the company's long-term viability.

2. Relocation & higher cost burn

When you are changing your place of business and moving from one location to another, layoffs can be a necessary requirement. This is because relocation requires a huge capital since there would be significant changes in operating costs. To manage these aspects and reduce the impact on the organization, layoffs can be considered.

3. Poor funding

Poor funding can be a major reason for organizations to consider layoffs. Lack of funding can lead to inefficient management and impact the overall growth of the organization. To ensure financial stability, companies may opt for layoffs to improve their revenue stream and bring back business stability.

4. Merger or buyout

If a company undergoes mergers or buyouts, layoffs can be a necessary process to eliminate duplication of roles or to eliminate staff redundancies. By carefully evaluating employee roles and their performance, companies take this route to maintain a stable growth.

Alternatives to layoffs

Exploring alternatives to layoffs can help organizations retain talent, maintain employee morale, and avoid negative publicity. Implement the following methods can help you do so:

1. Pay cuts

Pay cuts can be an alternative to layoffs and help companies reduce costs. However, it's essential to communicate any pay cuts clearly and transparently and ensure they are reasonable and equitable.

2. Job sharing

An effective alternative to layoffs can be stated as job sharing where two employees share the responsibility for a single role and are paid according to the number of days they work. This strategy helps an organization in retaining skilled workers, and at the same time, reduces cost.

3. Hiring freeze

When a company temporarily puts a stop to their recruitment process, it is known as hiring freeze. By doing so, organizations can evaluate the existing roles of the company and balance the books without the need for layoffs.

4. WFH programs

Work-from-home (WFH) programs are an alternative to layoffs, where employees work from home instead of a central office. This option can help businesses cut costs on office space but may also require additional resources and infrastructure to support remote work.

What is sales team restructuring?

Sales team restructuring involves changing a company's sales force, often as a response to shifts in the market or business strategies. The restructuring may include changes in roles, responsibilities, and reporting lines to improve efficiency, increase sales, or reduce costs.

While layoffs may be a traditional method for cutting costs, sales team restructuring offers a great alternative to achieve the same objectives while minimizing the negative impact on employees.

This process helps in maintaining productivity as well as employee morale and is beneficial to the overall health of a company. So, with sales team restructuring, a company can experience numerous benefits including its steady growth and development.

Methods to restructure the sales team

To improve sales performance, boost team morale, and increase revenue, exploring effective methods to restructure the sales team can be crucial for any organization. Here's how you can do it:

1. Improvise team

Sales team restructuring involves identifying the skill gaps within the team and implementing training programs, coaching, and mentorship initiatives to upskill and reskill the employees. This leads to a more productive and efficient team, driving higher sales revenue.

2. Adapt new strategies

To remain competitive, sales team restructuring requires adapting to new sales strategies, technologies, and processes. This includes adopting new sales automation tools, implementing a customer-centric approach, and aligning sales processes with industry trends and consumer behaviors.

3. Match employees with suited job profiles

By assessing employees' skills and competencies, businesses can realign employees with job profiles that match their strengths. This can result in improved job satisfaction, reduced employee turnover, and increased efficiency in the sales team.

4. Downsize workforce

Sales team restructuring may require downsizing the workforce to reduce costs, particularly when the team is overstaffed or underperforming employees. You can create a leaner, more cost-effective sales team by retaining high-performing employees and terminating redundant or underperforming staff.

Benefits of sales team restructuring

Restructuring a sales team can bring numerous benefits that help your organization elevate growth and functioning. Some of the key benefits of this process are:

1. Greater efficiency

With sales team restructuring, a company can improve its efficiency in business functioning. The restructuring process can include realigning the sales process, modifying resource allocation as well as managing the complete operations.

2. Aligned sales target

Businesses can align sales targets with overall business objectives through sales team restructuring. This helps to ensure that sales efforts are focused on driving growth and increasing revenue, leading to greater success in achieving business goals.

3. Increased productivity

Sales team restructuring can increase productivity by realigning employee roles, responsibilities, and skill sets with business needs. This can lead to better job satisfaction, increased motivation, and higher productivity levels among the sales team.

4. Higher profit margins

Sales team restructuring can lead to higher profit margins by streamlining sales processes, improving operational efficiency, and driving revenue growth. By identifying areas for improvement, restructuring can help businesses reduce costs, increase sales revenue, and improve overall profitability.

5. Improved decision-making

Restructuring the sales team can provide businesses with better data analysis and insights, enabling more informed decision-making. By streamlining operations and improving efficiency, businesses can identify trends and make strategic decisions that drive growth and improve sales performance.

Things to consider while restructuring teams

If you are thinking your business needs sales team restructuring, you need to consider several things before you make the decision:

1. Needs

You need to carefully evaluate all the areas of your sales team before proceeding with the restructuring process. By doing so, you can understand the areas they are facing problems and need help with improvement. You can incorporate various methods like analyze sales data, evaluate customer sales processes to identify how much their process is aligned with your business objectives.

2. Management structure

The management structure of your business can be directly impacted when you decide to go ahead with sales team restructuring. So, before taking this step, carefully evaluate and understand the roles and responsibilities of your sales team members and how they impact the organizational functioning.

3. Timelines

Sales team restructuring can be complex and take time to implement. Businesses must establish realistic timelines for restructuring and communicate them to all team members. Timelines should be flexible enough to accommodate unforeseen challenges or delays.

4. Alignment

Alignment between the sales team and the overall business strategy is essential. That’s why, during the restructuring process, you need to make sure that the team’s capabilities and goals are in sync with the company objectives which can lead to the desired success of an organization.

Conclusion

Sales team restructuring is a complex process that requires careful consideration and planning. While layoffs may be an attractive solution to cut costs, it is not always the most effective or ethical approach.

Companies can retain their valued employees and maintain productivity by exploring alternative strategies such as pay cuts, job sharing, hiring freezes, and WFH programs. Sales team restructuring offers numerous benefits, including increased efficiency, aligned sales targets, improved decision-making, and higher profit margins.