Putting people at the heart of your restructure

Effec­tive tal­ent man­age­ment has nev­er been more impor­tant than in such tur­bu­lent times when busi­ness restruc­tur­ing has accel­er­at­ed.

The coro­n­avirus pan­dem­ic has not only brought about a deep, glob­al eco­nom­ic reces­sion, it has also forced sig­nif­i­cant num­bers of organ­i­sa­tions to shift their busi­ness mod­els, work­ing prac­tices and routes to mar­ket almost overnight. Com­pa­nies have embraced remote work­ing, dig­i­tal and online activ­i­ty at unprece­dent­ed lev­els.

But this sce­nario is also hav­ing an impact in two oth­er key tal­ent man­age­ment-relat­ed areas: on the one hand, it is lead­ing some employ­ers to make more or few­er redun­dan­cies depend­ing on their cir­cum­stances; on the oth­er, it is accel­er­at­ing reskilling efforts often already begun in response to automa­tion.

How to handle redundancies well

Con­cern­ing redun­dan­cies, while some play­ers, main­ly in the tech and dig­i­tal, have remained rel­a­tive­ly unscathed and even ben­e­fit­ed from the cur­rent tumul­tuous cir­cum­stances, oth­er sec­tors, such as hos­pi­tal­i­ty and leisure, have leaned heav­i­ly on fur­lough schemes. Such schemes are thought, in many instances, to be mask­ing the true extent of like­ly future lay-offs.

But of those indus­tries in which job loss­es are already tak­ing place, employ­ers gen­er­al­ly fall into one of three camps, says Jeanne “JC” Tow­nend, chief exec­u­tive for the UK and Ire­land at out­place­ment provider LHH.

“We’re see­ing redun­dan­cies as a result of com­pa­nies going bust, cost-cut­ting or a lack of the right skills,” she explains. “But the biggest short-term impact will come from those in the mid­dle group which, in many instances, are cost-cut­ting to sur­vive.”

Getting the process right

A fourth cat­e­go­ry, says Andy Brown, chief exec­u­tive of lead­er­ship and engage­ment con­sul­tan­cy ENGAGE, is that of employ­ers tak­ing the pan­dem­ic as an oppor­tu­ni­ty to “revis­it their strat­e­gy and what they want the com­pa­ny to be, which for some is lead­ing to quite sig­nif­i­cant busi­ness restruc­tur­ing”.

What­ev­er the moti­va­tion, what is evi­dent is just how impor­tant it is to get the process right, not least because fail­ing to do so can be extreme­ly dam­ag­ing for the com­pa­ny brand in both the short and long term. Accord­ing to research by LHH, han­dling redun­dan­cies bad­ly can lead to a 30 per cent drop in morale and a 20 per cent fall in pro­duc­tiv­i­ty among those employ­ees who remain.

As a result, one of the most impor­tant tal­ent man­age­ment con­sid­er­a­tions for lead­ers is tak­ing a cru­el-to-be-kind approach. As a start­ing point, this means the lead­er­ship team must be clear in its own mind about what is right for the organ­i­sa­tion and its stake­hold­ers, says Simon Bon­ney, man­ag­ing direc­tor of busi­ness advi­so­ry firm Quan­tu­ma.

If you’re try­ing to be too nice or kind or opti­mistic, rather than ensur­ing the cuts are deep enough to sus­tain the busi­ness, you’ll sim­ply desta­bilise it

Man­age­ment must also know what it is try­ing to achieve and what it wants the com­pa­ny to look like fol­low­ing the busi­ness restruc­ture. Hav­ing a sound strat­e­gy and plan to achieve these aims is just as vital.

“If you don’t take the hard deci­sions ear­ly enough with the right degree of force, as you’re try­ing to be too nice or kind or opti­mistic rather than ensure the cuts are deep enough to sus­tain the busi­ness, you’ll sim­ply desta­bilise it, espe­cial­ly if you have to keep revis­it­ing the restruc­tur­ing plan because the right deci­sions haven’t been made at the right time,” Bon­ney warns.

Restructuring with compassion

But tak­ing such an approach does not imply redun­dan­cies should be made with­out com­pas­sion or with­out acknowl­edg­ing the human cost. In fact, says Brown at ENGAGE, there are five key fac­tors that deter­mine whether such an exer­cise will end up being a brand-bur­nish­ing suc­cess or a brand-tar­nish­ing fail­ure.

The first is the impor­tance of swift and effec­tive inter­nal and exter­nal com­mu­ni­ca­tion. This involves lead­ers being trans­par­ent and hon­est about their deci­sions and the ratio­nale behind them, to help employ­ees under­stand and put the sit­u­a­tion into con­text.

Not only does this approach pre­vent dam­ag­ing rumours from tak­ing hold, but it also engen­ders trust that the man­age­ment team knows what it is doing and instils con­fi­dence the busi­ness is in safe hands.

The sec­ond fac­tor is about act­ing in a humane way and show­ing empa­thy to employ­ees, not just in their capac­i­ty as work­ers, but also as peo­ple. Brown cites the exam­ple of a food com­pa­ny in Ire­land that laid off 30 staff mem­bers.

The chief exec­u­tive spoke to each indi­vid­ual con­cerned. He also wrote a let­ter thank­ing them for their efforts and say­ing how sor­ry he was to let them go, while offer­ing an expla­na­tion of the rea­sons behind the deci­sion and acknowl­edg­ing the impact on them and their fam­i­lies.

“His empa­thy put the employ­ees in a com­plete­ly dif­fer­ent frame of mind,” says Brown. “They still spoke high­ly of his lead­er­ship and the brand and, with­out excep­tion, said they’d like to come back when things picked up.”

Creating brand advocates or brand detractors

A third con­sid­er­a­tion involves tak­ing the blame out of the sit­u­a­tion. “Peo­ple need to know it’s not their fault and there’s a big­ger pic­ture they couldn’t change,” Brown explains. “If they do feel at fault, it has a neg­a­tive impact and can psy­cho­log­i­cal­ly scar them for a long time.”

Next on the list is the impor­tance of lead­ers show­ing some humil­i­ty and not pre­tend­ing to have all the answers, par­tic­u­lar­ly in a fast-mov­ing envi­ron­ment when more than like­ly they do not.

“It’s about set­ting expec­ta­tions upfront, so say­ing ‘we may not have all the answers, but we’ll do the best job we can and pro­vide you with as much sta­bil­i­ty as we can in the near term’,” says Brown.

A final imper­a­tive is for employ­ers to pro­vide help and sup­port for those leav­ing the com­pa­ny. Such sup­port can range from offer­ing ser­vices, such as career coach­ing and men­tor­ing, to help­ing them net­work and find new jobs. Oth­er options include allow­ing peo­ple to keep their lap­tops or pri­vate health insur­ance for a peri­od of six months or so to smooth the tran­si­tion. As LHH’s Tow­nend points out: “It may be a low upfront cost for employ­ers, but it makes a big dif­fer­ence to for­mer employ­ees. And treat­ing peo­ple as human beings makes all the dif­fer­ence between whether they become a brand advo­cate or a brand detrac­tor.”

Secret of reskilling success

Mean­while, for those employ­ers that find them­selves in the hap­py posi­tion of not hav­ing to make redun­dan­cies, or are keen to change the com­po­si­tion of their work­force as they reori­ent the busi­ness to exploit new oppor­tu­ni­ties, there is a sec­ond impor­tant tal­ent man­age­ment strand: upskilling or reskilling the work­force, or at least sec­tions of it.

Josh Bersin, glob­al human resources ana­lyst and dean of the Josh Bersin Acad­e­my, says the restruc­tur­ing going on now as a result of the pan­dem­ic is sim­ply an accel­er­a­tion, in many instances, of the busi­ness and dig­i­tal trans­for­ma­tion that has been hap­pen­ing for some time.

Future-of-work trends brought about by increas­ing lev­els of automa­tion and the intro­duc­tion of arti­fi­cial intel­li­gence (AI) tech­nol­o­gy is already lead­ing to some man­u­al, repet­i­tive tasks being replaced by soft­ware. While this may lead to the elim­i­na­tion of some jobs, fre­quent­ly they sim­ply morph into some­thing else, par­tic­u­lar­ly if it is pos­si­ble to aug­ment human activ­i­ties by sup­port­ing them with input from machines.

By way of illus­tra­tion of the lev­el of change tak­ing place, mar­ket research firm Gart­ner says the aver­age job role has changed by 40 per cent in the last three years. More­over, it adds, a third of the skills employ­ers were hir­ing for before the pan­dem­ic will be out of date by the end of it, while as few as 16 per cent of new hires are equipped with the dig­i­tal and data analy­sis skills required in the future.

Although Bersin con­tests these fig­ures, he acknowl­edges a grow­ing inter­est over recent years among large com­pa­nies at least in hir­ing can­di­dates who can demon­strate learn­ing agili­ty or the abil­i­ty to learn and adapt quick­ly.

He adds: “The key to hir­ing great peo­ple these days is under­stand­ing their ‘adja­cent’ skills and expe­ri­ence, and whether they’ll be trans­fer­able. It’s gen­er­al­ly a much bet­ter indi­ca­tor of suc­cess than qual­i­fi­ca­tions and cer­tifi­cates, although they’re still impor­tant, of course.”

Introducing reskilling pathways

The prob­lem for many HR pro­fes­sion­als in tack­ling skills issues at the moment, how­ev­er, is they are often sim­ply too bogged down in trou­bleshoot­ing key issues, such as employ­ee health and well­be­ing or how to reward and incen­tivise staff when whole chunks of the busi­ness have changed.

Nonethe­less, a num­ber of large, more pro­gres­sive employ­ers are already start­ing to put reskilling path­ways in place to help staff tran­si­tion to the new world, with sig­nif­i­cant­ly more expect­ed to fol­low suit over the next 24 months, says Nick South, glob­al leader of man­age­ment con­sul­tan­cy Boston Con­sult­ing Group’s peo­ple and organ­i­sa­tion­al prac­tice.

Com­pa­nies, such as Schnei­der Elec­tric and Unilever, for exam­ple, are already using inter­nal tal­ent mar­ket­places to match staff with work assign­ments, projects or job rota­tions right across the busi­ness. Doing so offers two key ben­e­fits. Not only is it pos­si­ble to opti­mise the use of exist­ing tal­ent and smooth out uneven inter­nal demand, but employ­ees can also take advan­tage of skills and career devel­op­ment oppor­tu­ni­ties to which they might not oth­er­wise have had access, includ­ing men­tor­ing.

One US bank, upon shut­ting down 80 per cent of its branch­es as a result of the pan­dem­ic, used an AI sys­tem to analyse the skills and expe­ri­ence of the 35,000 staff affect­ed. The aim, accord­ing to Bersin, was to under­stand who would be the fastest and eas­i­est to retrain for call cen­tre posi­tions and who should be placed on fur­lough. Some 78 per cent of its per­son­nel were suc­cess­ful­ly rede­ployed.

What such exam­ples illus­trate is that the secret of suc­cess in tal­ent man­age­ment, at a time when there is so lit­tle clar­i­ty about what the future holds, is no longer to be found in fol­low­ing tra­di­tion­al, often rather inflex­i­ble, work­force plan­ning and tal­ent acqui­si­tion approach­es.

Instead, says Sari Wilde, man­ag­ing vice pres­i­dent at Gart­ner, it is about adopt­ing what she calls a “dynam­ic skills strat­e­gy”, which involves fill­ing any gaps by means of a judi­cious mix of inter­nal reskilling, exter­nal hir­ing and use of con­tin­gent labour.

Getting more creative with talent management

“A dynam­ic skills approach is focused on cre­at­ing a ‘skills-sens­ing net­work’, apply­ing ‘skills accel­er­a­tors’ and cre­at­ing trans­paren­cy around exist­ing skills, with a view to both enhanc­ing those capa­bil­i­ties and using them to solve dif­fer­ent busi­ness chal­lenges,” Wilde explains.

As an exam­ple of a skills-accel­er­a­tor approach, she refers to a chem­i­cal firm that was keen to improve the data sci­ence exper­tise of mem­bers of its work­force. After iden­ti­fy­ing peo­ple with only basic data-sourc­ing and report­ing skills, it hired in a num­ber of more expe­ri­enced staff to assist in devel­op­ing them fur­ther.

But to get the skills mix right, it is also vital employ­ers cre­ate two-way skills trans­paren­cy, says Wilde. To explain the ratio­nale, she cites the exam­ple of an oil and gas com­pa­ny that requires its entire work­force to main­tain on an inter­nal sys­tem up-to-date, so-called career “back­packs” based on their skills, expe­ri­ences and achieve­ments. The infor­ma­tion in these back­packs is then used to help fill inter­nal vacan­cies, sup­port devel­op­ment con­ver­sa­tions and advise on career moves.

Some organ­i­sa­tions are even start­ing to decon­struct hard-to-fill roles into their con­stituent skills and tasks to help them become more cre­ative in how they ful­fil their require­ments. This means rather than waste time try­ing to find the per­fect per­son for the job, they could instead fill it using mem­bers of a part-time project team, for instance, says Wilde.

Boston Con­sult­ing Group’s South says it is this kind of cre­ativ­i­ty and abil­i­ty to think more broad­ly that is going to become increas­ing­ly impor­tant if employ­ers are to avoid wide­spread and repeat­ed busi­ness restruc­tur­ing into the future.

“It’s not going to be just about ‘do we recruit or lay peo­ple off?’ We have to ask our­selves where are the skills we could bor­row, rent or rede­ploy, what skills do we need to build and where do we need to be cre­ative on reskilling? The secret will be in think­ing more imag­i­na­tive­ly,” he con­cludes. 

---

Case study 1: Aldi and McDonald’s

The tem­po­rary staff-shar­ing alliance between Aldi and McDonald’s, which was rolled out in Ger­many this March, has been greet­ed with uni­ver­sal acclaim as an inno­v­a­tive approach to pre­vent­ing lay-offs.

The coro­n­avirus pan­dem­ic has meant many of the fast food giant’s 1,500 restau­rants in the coun­try have been peri­od­i­cal­ly forced to close or lim­it their open­ing hours. But the dis­count super­mar­ket chain, which con­sists of 4,100 stores, has at times strug­gled to keep its shelves stocked due to high lev­els of demand for food from shop­pers.

The new ini­tia­tive means Aldi can take on any McDonald’s employ­ees who make the choice to work for it rather than stay at home. As a result, the retail­er now has access to addi­tion­al per­son­nel to staff its sales and logis­tics depart­ments as it requires, under its own terms and con­di­tions and at short notice.

Once restric­tions are lift­ed, employ­ees “quick­ly and unbu­reau­crat­i­cal­ly” sim­ply return to their for­mer employ­er, as the two com­pa­nies put it.

Andy Brown, chief exec­u­tive of lead­er­ship and engage­ment con­sul­tan­cy ENGAGE, points out that not only are such ini­tia­tives “imag­i­na­tive and flex­i­ble”, but they are also a win-win for every­one con­cerned.

Case study 2: Honest Burgers

In a bid to save as many jobs as pos­si­ble dur­ing the pan­dem­ic, the UK’s Hon­est Burg­ers restau­rant chain intro­duced ini­tia­tives to both reskill its work­force and ensure trans­fer­able skills were put to good use.

As with many food out­lets, says peo­ple direc­tor Chan­tal Wil­son, “COVID sped up the impact of Brex­it”, which meant that fol­low­ing the first lock­down, it lost about 150 of its chefs due to an exo­dus from Lon­don.

There­fore, in a nod to the company’s roots, it imple­ment­ed an ini­tia­tive called Back to Brix­ton, in which it asked for front-of-house vol­un­teers to retrain as chefs. The suc­cess of the move meant it was able to retain all front­line staff and make only sev­en peo­ple at head office redun­dant out of a total orig­i­nal head­count of 730.

Anoth­er even more imag­i­na­tive scheme was the intro­duc­tion of a Craft Exchange. Dur­ing fur­lough, the deci­sion was tak­en to stop using third-par­ty sup­pli­ers and to post any craft-based jobs, such as graph­ic design, sign paint­ing or gar­den­ing, to a new­ly cre­at­ed inter­nal skills mar­ket­place.

Staff with skills beyond those employed in their day job were assessed inter­nal­ly and then accred­it­ed via bot tech­nol­o­gy on the company’s Work­place from Face­book plat­form. “It’s about tak­ing a peo­ple-first approach,” says Wil­son. “The focus has always been on treat­ing cus­tomers as indi­vid­u­als and so we chal­lenged our­selves to do the same with our inter­nal cus­tomers, that is our employ­ees, too.”

---