Redeployment is now a key issue

Sunday Business Post - Recruitment Page - Nov 30 2008

A creative approach to managing staff is needed to avoid job losses in an unsteady economy, writes Dermot Corrigan.

Companies under pressure are finding more creative ways to manage employees in order to stave off staff cuts and balance the books. Staff redeployment is top of the agenda for HR managers tasked with finding ways to boost revenues, according to a new report.

The SHL Ireland survey, released last week, found that redefining how staff operate was of “critical importance” to 59 per cent of the respondents it questioned.

HR practitioners in 100 organisations in Ireland responded to the SHL survey. 48 per cent identified the redeployment of existing staff between offices, divisions or roles as "an important strategy" in the current business climate.

"Companies are refocusing and looking to see what positions have the greatest possibility for revenue generation or for cutting costs," said Joe Ungemah, regional manager for Ireland, SHL. "They are looking across all the positions they have and saying which ones do we need to focus on if we have limited resources; which are the positions that have the greatest chance of bringing in money, sales people for example, and also research and development?"

In many cases, staff earmarked for redeployment are willing and qualified to move into more productive roles, Ungemah said.

“You have to think about what job families are closely related to each other,” he said. “When you are, for example, thinking of moving someone from an operations role into R&D, it comes down to whether someone has the right technical skills and experience. It may not be something they are using now, but they have learned it in the past."

52 per cent of the respondents surveyed by SHL said they had no plans to cut training budgets despite the downturn. Ungemah said that slower trading conditions were allowing some companies the space to train staff to fill different roles.

"The speed of economic growth over the last couple of years has meant that a lot of companies have not paid attention to keeping their internal HR processes up to date," he said. “Organisations realise that they just can not move people around without giving them the necessary support."

The SHL report found that 68 per cent of the companies surveyed were focusing on succession planning. Ungemah said that redeployment often had long-term career benefits for individual career progression, helping the succession planning process.

“A lot of specialists and managers may not have had the opportunity in recent years to gain experience outside their current job,” he said. “A mid-level manager who has always been pigeon-holed into a specific area might see a terrific opportunity to learn something new. It can be great for them in building their own CVs and getting to understand other parts of the business."

Internal restructuring is now a reality for a growing number of Irish employers, more than half of whom are operating with hiring freezes in place, said Janet Wallace, HR solutions consultant with Russell Brennan Keane.

"When people resign, retire or come to the end of their contract, they are just not being replaced,” Wallace said. “It is one of the easier options for companies to take when they see that things have to be tightened up. This is a way of reducing costs without having to make people redundant."


Pay cuts

Temporary and permanent pay cuts are now common practice in many Irish companies, according to Wallace.

"Davy Stockbrockers has announced that they were reducing their salaries across the board by ten per cent,” she said. “I know that many other companies in Ireland are doing that at the moment."

Wallace advised employers to apply pay-freezes or pay equally to all employees, or as part of a top-down initiative.

"Some companies introduce salary cuts on a phased basis," she said. "For example senior management are the first to take salary cuts. If the situation does not improve the fact that management took the pain first signals that they are leading the way. That can make it easier to implement cuts across all roles at a later stage."

Paula McGrath, managing director of Achievers Group, said that a bad reaction was not a given among staff facing a pay cut or pay freeze.

"Staff know a lot more about what is going on than most employers acknowledge, and they may be imagining the worst,” McGrath said. "It is more worrying to see a company not making commercial decisions. It is important to protect as many jobs as possible rather than burying heads in sand as this jeopardises the company and more jobs eventually.

Individuals who refuse to go along with suggested changes in their pay or conditions can cause problems for employers, McGrath said.

"By law, you have to honour somebody's contract of employment," she said. "If you are going to change any conditions, both parties have to agree. However, you can look to see if the person is delivering what is set down very clearly in their contract of employment and job specification. I know of organisations that start down that route if the person is not willing to play ball."

Creative solutions

McGrath said that organisations in financial difficulty were focusing on creative ways to reduce their payroll costs.

"Many companies are offering job share and modifying benefits such as reduced pay for increased holidays," she said. "Other individuals are being bought out of their trainee employment contracts. Bonuses are being acknowledged but deferred and overtime reduced by introducing flexible work practices.”

McGrath said that some roles were more suited to these steps than others.

"In sales related roles, in some organizations, we are seeing a reduction in basic salaries for existing staff and an increase in the potential to earn performance related pay and sales related commission," she said. “An employee who may relish the opportunity to establish himself independently and have more control over his work life balance can becomes self-employed with a contract arrangement.”

Managing change

Wallace said that it was important for organisations considering these steps to bear in mind their legal responsibilities.

"A change in the terms of employment needs to be put in writing and agreed with the employee before action is taken,” she said.

McGrath said that managers might be surprised at how open employees were to possible changes to their working arrangements.

"Small business owners are so engrossed in surviving that they might not realise that two staff have been talking and would be happy to job-share," she said. "I recently spoke with an individual in a large accountancy firm, who is willing to go down to four days a week, which will necessitate a drop in salary. She wants her job, and she wants to continue working for that company."

Wallace advised employers to ensure that very valuable and indispensable staff did not disengage from the company as a result of any changes introduced during the downturn.

"High performers will always find new roles and companies need to be working to identify the key roles that are critical for the future and the key staff they want to retain in those roles," she said. "While you may not be in a position to protect your key talent from some short term measures like bonus freeze or reduced working hours, you can provide reassurance to them that they are valued and viewed as critical to the future plans of the business and ask them to weather the storm with you."