What are the pros and cons to requiring employees to reapply for their jobs during a company restructuring?

This  strategy is commonly used in restructuring scenarios such as mergers, acquisitions and downsizing. When these events occur, employers are often faced with duplicate positions and inefficient staffing configurations. Although this approach seems controversial, there are several reasons organizations may choose to ask employees to reapply for their positions during restructuring. Commonly cited benefits of this strategy include the following: 

• Clearly defines staffing needs. This strategy requires employers to determine staffing needs and decide if redundancies or inefficiencies exist. In a merger scenario, for example, the organization may find that it does not need to retain all call center staff and may have adequate coverage with only 75% of the staff. In a restructuring environment, a company may decide that it wishes to hire a receptionist who also has office manager responsibilities rather than employing one worker for each of these jobs.
• Helps employers find the most qualified workers. When the jobs have been defined, the organization will have a standard by which it can compare all applicants. Most likely, this will be in the form of a job description. The job description will be used as a basis for determining the most qualified candidate.
• Weeds out employees who do not wish to stay. It is common for employees who were not happy or were considering leaving the company to use this event as an opportunity to leave. Most commonly, employers provide these employees with severance packages depending upon length of service with the company.
• Can help alleviate discrimination concerns. Using a standard, such as education, skills, experience or performance, can help an employer demonstrate that staffing selections are based on requirements of the position. It is important that employers have clearly written job descriptions, and the requirements defined in the job description are used to select the employee.

Even with these benefits, there are downsides associated with the strategy of requiring employees to reapply for their jobs following company restructuring. Problems that organizations may face when they ask employees to reapply for their jobs can include the following: 

• Time investment. This strategy takes considerable time and effort. An employer faced with layoffs or restructuring may not have the time necessary to fully engage in this time-consuming process.
• An insecure workforce. An insecure workforce is a common adverse effect in any potential downsizing scenario. Employees faced with the prospect of competing for their job will likely feel insecure, and this fear can spread to other parts of the organization. Employee fear can also lead to additional uncontrolled turnover. Frequent and consistent communication with employees is essential in helping to ease employees' concerns.
• Challenges handling those not selected. When an employer uses this strategy, it would be remiss to not consider how it will handle employees who have not been selected. In most cases, these employees will be laid off. If that is the case, organizations should consider any relevant layoff laws such as WARN and whether severance and outplacement services will be provided. Employers should also consider the possibility of retraining employees who have not been selected. Exploring this option could help reduce layoff numbers even further.