- A company I used to work for had a program with 4000 people managing customer care for a telco. The last of its centers was recently shut down, as another service provider took over.
- Another large entity recently decided to shut shop since a section of the business they were running was not profitable. Two different companies bought the entity.
- A third company decides to outsource jobs to another country and in doing so has to deal with employee dissatisfaction and, to some extent, even an industrial IR issue. This further develops into a situation of employees not allowing knowledge transfer of the process and applications.
All of the above scenarios are factual and true to the way situations turn out in business today. The stake holder that really gets affected by such a situation is the employee.
Quite a few of the locations where most of the above mentioned cases happened are in non-metro towns, where the companies had setup shop, keeping in mind the language capability and attitude that people there would have. It took time building these centers from a people capability perspective and shutting them down has been faster than one would have expected!
For the employees, besides the financial impact of the job loss, there would be loss of confidence in oneself, loss of morale, emotional trauma etc. There is also the aspect of the employee being treated with dignity during the exit experience.
Further, in the case of a company deciding to outsource the jobs, employees, who have served for a period of time and are moved as employees of the outsourcing company, are bound to be disgruntled, angry and feeling terribly let down by their employer. This also needs to be managed deftly and maturely.
We are living in a volatile, uncertain, complex and ambiguous(VUCA) world and the business environment is obviously affected by this. Technological developments further force companies to rethink on what to invest into and what to let go of.
The choice is increasingly becoming more technology, less people.
As I write this, two large telecom companies in India have decided to shut shop and two others are in the process of a merger in the same industry, with thousands of employees losing their jobs in the process.
In this era of constant change, we cannot wish off the possibility of business failures. Both, large corporates and startups coming up in a wide range of areas, have a good chance of not making it eventually.
However, what is important, while handling business issues, is to ensure that the focus of any conscientious company is also on responsible employee management.
How it can prepare the employees for such situations and help them through difficult periods in their professional lives, for which they are not entirely responsible, will show the character and commitment of the company towards its employees.
Today the company may be in trouble; but it shouldn’t do things in a manner where tomorrow, when employees are needed again, capable people don’t come forward to join.
So how does an organization proactively enable an employee deal with such a difficult transition?
Some of the steps that businesses could take are
Employee Management – Consciousness and Accountability in business planning
While hiring employees, is adequate thought being given?
Business planning and forecasting go hand in hand; however, who is to be held accountable in this activity, for being mindful of the implications of wrongly hiring people in terms of numbers and costs ?
There is a case in point, wherein a company made a forecast for a sizeable number of people and with certain pre requisites for the job and went ahead and hired. These employees came with a certain cost which, the company realized a year later, was far too much. Hence they outsourced the jobs to a BPO whilst re-sizing their own team. Quite a few employees lost their jobs while few were transitioned at the same cost. Subsequently these employees were retrenched by the BPO too!
The planning process must involve business consciousness and responsibility on part of the leadership and planning team.It’s imperative for companies to seriously review their planning process and make a comprehensive assessment of what they really need before employing someone.
One of the effective ways of doing this is for the CEO to empower HR to question and validate the need for hiring; and make every functional manager conscious of and be accountable for the cost of hiring and attrition which impacts the business.
Business modeling with low manpower and high technology
- Technology : At the time of building the strategic plan or reviewing it, if companies spend time to research and plan the implementation of technology in their operating processes, they would then be able to correctly estimate the manpower size that will be sustained for a long period.This will avoid short sighted recruitments and subsequent retrenchments.
- One person, multiple roles :There are roles which do not have an 8 hour per day workload. Hire people to perform multiple roles, thereby ensuring productivity. This would also ensure the right expectations are set with employees. This could mean they need to be multi lingual, know multiple products, use multiple tools etc.
- Low on fixed, high on variable – Employing for some execution roles with a low fixed and high variable pay model linked to performance (these roles often take the largest number of employees and grow with the business)ensures that the truly efficient ones succeed and get compensated well, while the low performers’ cost to company is lower.
- Getting employees to be future ready – As technology enhances our lives, old skills become redundant. Hence it is also important for companies to focus on upskilling employees ahead of the curve. This would mean HR proactively understands what is the future course of the company and has an employee training strategy that enables employees to be ready. Its also important for employees to know that their jobs are transferable to other domains or locations. This prepares them mentally to be flexible when options come their way.
- Employee updates about the business: Keeping employees updated about the company’s performance and way forward helps employees plan their own paths. Many get the sense and start looking around, making it easy for both the business and the employees.
Adequate planning, being cautious in taking recruitment decisions and developing win-win strategies where both, the company and the employee, benefit and are able to move forward in a secure and dignified way, is the need of the hour.
Companies that fail to do so, will lose the confidence of employees and develop a poor market reputation, hampering future recruitments.