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Benjamin McBrown

Cutting Headcount – Don’t Do It For ‘The Sake of It’.


In the space of a few hours last week, two announcements hit the media from organisations planning to cut headcount; one is easily one of the UK’s most recognised with outlets on almost every high street, the second, the business behind some of Britain’s most loved consumer brands.


Between them, the 2,200 combined jobs that Royal Mail and Unilever are planning to cut may not actually be that significant, Unilever’s 1,500 equates to about 1% of their total global headcount while the 700 planned by Royal Mail is an even smaller percentage of their workforce; the fact that all cuts are planned at management level points to the decisions being driven by costs primarily with the hope that there will be little knock-on harm to productivity.


Decisions like this are unlikely to have been taken quickly; the chances are that this will have originated perhaps in the form of a cost reduction objective from board level, and following this will have been the involvement of consultants (not us in either case) who will not only have had to achieve the targeted cost savings but also ensure that their fees were covered too, again hence the focus on management-level jobs where a conservative estimate would see savings of around £150,000,000 for Unilever.


For consultants, the focus of any engagement should be on delivering what the client needs, not just what they think they want; one advantage we as consultants hold over a firm’s internal talent such as the leadership or own project management/transformation specialists is fresh eyes, (while another is that we are free from internal politics).


Being able to bring both together means that often external consultants will see where both the challenges and opportunities really exist, it is concerning how often business leaders do not have a true understanding of their organisation, and even when they do, there is no guarantee of a picture of how to solve any issues, consultants are better positioned to recognise what the business really needs in order to improve.


At intelliHub we start every project with two primary objectives; one, to do the right thing for our client, and two to deliver the highest possible ROI, ROI being a broader measure giving opportunity to change many things to deliver results, not just reduced costs.


If Its Good Enough For Unilever…

This isn’t to say that removing this headcount from Unilever and The Post Office wasn’t the right thing to do based on the parameters/objectives the organisations set out, and it isn’t to say that it won’t be the right thing to do for any of our clients, however, being brutally frank, it is something we see as a last resort.


Perhaps it comes from the background of our founders, who although coming from very different careers, share one particular view in common, a belief in the value of great talent. Our MD Noel Castillo has worked with teams across a wide range of disciplines and having observed how much value they contribute to firms, sought to find innovative ways to reduce the costs associated with people rather than the people themselves, this was the foundation of one of our specialisms, the design of hybrid workplaces. Ben however, spent a large part of his career working in talent acquisition, building teams for organisations of all shapes and sizes globally, and he knows, perhaps better than most how difficult it is to find great talent in the first place and how important it is to keep it when you have it.




Employer of Choice

Unilever are renowned in the FMCG industry for hiring and developing fantastic professionals; across every department and in every country the business operates in the business is known to be an employer of choice, this is an extremely enviable position to be in. For this reason, it is safe to assume that these leadership-level heads that are due to be cut from the business will have made significant contributions to the firm through their careers there and will go on to do so for the next organisation they join (of course this is great news for other businesses as there will be some top talent coming to the market).


It is fair to presume that Unilever will enter into a consultation offering the opportunity for people to decide whether they take a package to leave, or stay in a new structure; while a popular strategy as it allows people to decide for themselves and avoids the clichéd ‘last-in, first-out’, consultation is not without risks; top of list and observed on many occasions is the loss of a business’ brightest talent; many is the business that has seen great people leave as soon as the door is ajar, and secondly is the cost of redundancy – something which could push a possible ROI from the redundancy program further down the road.


The other danger that a strategy focused on headcount reduction can bring is the knock-on harm to culture; there is no need to repeat here any of the countless surveys which underline the impact job uncertainty has on employees, contributing to lower productivity, poor decision making and increased churn, and it is something which should be just as concerning for businesses today as it ever has been; it is something which in a business which thrives on creative/innovative thinking such as Unilever, could be particularly harmful.


A few years ago, Unilever was one of the first ‘big names’ to announce its marketing was switching to zero-base budgeting. Despite the name, this wasn’t simply a move to slash marketing budgets, as the principle is actually about starting every year with a blank sheet of paper. Removing the focus on what went before, and requiring the justification of any activity anew, means that the business was promoting creativity amongst its marketers, and even risk taking as there wasn’t the same weight towards the ‘status-quo’ as in the normal approach.


If employees fear future rounds of job cuts in the future, doesn’t it just incentivise people to work? I guess this could come down to the ‘fight or flight’ argument and it is pretty accurate, but what it often promotes in the workplace is people focusing heavily on their core objectives (doing what they need to) and not wanting to take any risks; this in itself can then see people switch from ‘fight’ to ‘flight’ as they start to see opportunities elsewhere as more appealing.


The bottom line is that for businesses looking to cut costs, there are alternatives; those which retain talent, maintain or boost productivity and ultimately leave organisations in a much stronger position than those which see a business reliant on a smaller pool of expertise, knowledge, and innovative thinking; with Hybrid Working just one of the strategies that an organisation could explore.


Transformation comes with risks although these can be significantly mitigated by engaging experts; not only will they have the knowledge to design and implement a solution with speed that will see your firm achieve its objectives, but should it not be on-track to achieve what it sets out to do, a specialist will recognise this earlier and have the know-how to correct this. intelliHub goes even further than this, with every transformation we undertake supported by a series of subsequent ‘health-checks’ guaranteeing that our clients continue to see results from their transformation in the long-term.


If you are keen to understand how intelliHub can transform your business for the better, built around great talent and optimised for maximum productivity and profitability visit www.intellihub.co.uk

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