These topics are of concern to senior HR executives and CEOs at the start of the year. Details have been changed to protect confidentiality.
Q. As People Director, I was told last month by the CEO that I had to take action by February to slash my department costs in an emergency action to help maintain the company's cash, as orders fall off. I am negotiating the exact targets, but since I reckon I run a lean department that is a tiny fraction of the company's operating cost, I am not sure where to start. All other so-called support departments are also affected.
A. Assuming that you have already used blunt instruments like a headcount freeze, are not still carrying any underperformers and want to hang on to your talent, then it may well be that you need to take some unconventional action. Firstly, review the training costs for your own function, and ban, for example, all one-day conference attendances for six months: you don't need people to be away for a day to learn anything new about employee engagement at a cost of £600. Reading the quality press and trade journals work just as well. Or you can invite individual lecturers to come to your office. Secondly, review all other training held centrally on your budget that is not HR related, and negotiate with your other directors for the costs to be removed. In parallel, form a small task group with members from across your department to seek their ideas on how costs can be temporarily or permanently saved: if you find that there is pressure on your service provision in one area, consult with recipients about how this can be modified. You should find surprising savings without too much difficulty, and you can set the example to your director colleagues of how to involve their staff.
Q. I feel like the classic beleaguered CEO that is featured in the Press. There is no doubt that my services business is under the cosh thanks to the current mayhem in the City financial sector that we support. I don't believe any government utterance about a 2009 recovery, though I reckon Obama's initiatives will help drive forward a slight recovery in 2010. I know that I need to carry the responsibility for the firm, and I feel tempted to massage the truth with the staff to keep them committed. Should I?
A. With all the current means of instant communications, and the extent of your firm's performance known to your finance staff anyway as a minimum, it would be dangerous not to be transparent. Your own credibility would suffer and your best people will leave at the first available opportunity. Think positively. While knocked back by current events, you and your team could well find opportunities for new or modified business if you consider the problems as challenges that need to be worked through. What are your marketing guys saying, for example, about specific public sector bodies as potential customers? And what about export markets? This a good time for a half day brainstorm in your boardroom, and don't forget to consult the workers to capture their ideas.
Q. We have been instructed by our American owned parent to shed 10% of our staff pretty rapidly with no compensation other than statutory redundancy pay. I reckon that if we do this, we will be faced with dismissal claims, not least because we may be cutting corners on the required notification and consultation process to speed things up. How can I persuade HQ to change their minds on the severance terms?
A. If you are letting 100 reasonably competent people go, ranging from the troublemaker to the brilliant, you could be faced with claims from perhaps 10 who feel they have nothing to lose. These will include a proportion of discrimination claims, real or spurious, that have the potential for unlimited awards at an employment tribunal. It would be useful to work out the costs of handling such claims right through to the tribunal stage, including the time taken for full investigations, and the true costs of management time given up in the whole process. You will find that there is a persuasive financial case to put to HQ to increase the severance package. You can also point out the reputational risk of adverse press coverage.
Q. I want to make sure that our best suppliers are not going under in 2009/10. How do I get closer to them without having to change our terms of business?
A. Some large corporations have found that monthly forums of suppliers have worked well in identifying possible problem areas. These meetings tend to be OK if the talk is general, but you may want to follow that up with a bilateral meeting with each supplier where hopes and concerns from both sides are openly expressed within the security of commercial sensitivity. If you treat all you suppliers in the same way, then nobody is going to feel threatened. But be prepared to have an open dialogue and consider suppliers as partners with a shared goal. If you are less likely to place orders in the following quarter, give as much notice as possible. If you find that a supplier is having temporary cash-flow problems, then think of ways to help. Keep suppliers informed of progress of projects after their specific role has finished: they are more likely to see you as a valued customer. Finally, stick to a 30 day payment schedule!
Q. How do I keep staff in my small firm of six if I can no longer really pay them a bonus or raise their salaries much during the recession?
A. Many in the private sector will still be glad to have a job over the next year, so despite murmurs, you could find that additional pay may not be at the top of the agenda. Again, be open with the staff, and listen to what their individual needs might be. Some might like to expand their responsibilities; others might prefer more flexibility and take the occasional half-day off, for example. Although there are notional costs of extra absence, there will be enhanced productivity and commitment while they are in the office. Some tweaks in practical terms and conditions like these can work wonders. Taking a longer term view, you can also indicate what levels of profitability are going to be needed in 2010 to restore the normal reward process.
Q. If I run a new lean company from now on because of the recession and do all the right things but still have a dispute, I am likely to be stuck if there is a grievance that needs to be investigated and resolved. Is independent external help still going to be the way ahead even after the ending of the statutory procedures?
A. Yes, even the new draft official guidance mentions external assistance if needed to resolve a grievance effectively. A growing number of organisations see this as appropriate in some circumstances when it is impossible to resource the problem internally or when there are conflicts. In my recent experience, even if employers are ultimately found after the dispute not to have been devious as might be alleged, there are usually learning points and procedural changes that can be put in place to reduce future risks.
Q. How do I keep up quality commitments to maintaining Investors in People for example? We no longer have a separate training department since employees have their own e-learning accounts now.
A. If you have had the Standard for some time, it is likely that many of the values will be built in and have become second nature. As an MD, though, you will need to carry out spot checks from time to time depending on the size of your business to ensure that new managers and staff, such as those being seconded from abroad, understand and are helped. Perhaps it's equally important to remember that if you have to modify your strategy earlier than expected, it is essential this is communicated and all the development implications understood.
Q. My bank is being stupid about our credit lines to help grow the business. I try to put forward a logical argument but nothing happens. Nobody listens. Any ideas?
A. It is just possible that your directive style is not one that works best in the current circumstances. Consider some modifications, and think about developing your influencing and negotiating skills. Have a word with your HR chief who should be able to advise!