If You’re Cutting Staff Do It Properly
March 6th, 2009
Many bosses admit the current economic crisis is giving them a chance to restructure their firms in ways they should have done before, but found a hard sell when things were going well. As a rule of thumb, a careful cull of the 10% of lowest performers can make a firm leaner by removing fat without damaging muscle. It is going beyond the 10%, as many firms are now starting to do, which poses the real risks to a firm’s competitiveness.
This crisis is revealing how few firms have really thought through their talent strategies. But firms which have thought seriously about their talent needs have the opportunity to get ahead, not just by shedding poor performers but also hiring scarce talent from outside, in what is now a buyer’s market.
Other tips include avoiding voluntary redundancy programmes, which encourage the most employable people to quit, and not firing newest recruits on a crude “last in, first out” basis, as this cuts off the supply of future talent. Instead, firms should identify which workers they need to keep, and do what they must to retain them.
Law firm Bell Gully has produced a paper outlining some aspects of staff cost cutting for local employers. To download the paper, go to http://www.bellgully.com/resources/resource.02085.asp
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