From: "Saved by Windows Internet Explorer 7"
Subject: STAYING UP THERE - The Irish Times - Mon, Dec 01, 2008
Date: Mon, 1 Dec 2008 18:42:49 -0700
MIME-Version: 1.0
Content-Type: multipart/related;
type="text/html";
boundary="----=_NextPart_000_0000_01C953E4.9C470A00"
X-MimeOLE: Produced By Microsoft MimeOLE V6.0.6000.16669
This is a multi-part message in MIME format.
------=_NextPart_000_0000_01C953E4.9C470A00
Content-Type: text/html;
charset="Windows-1252"
Content-Transfer-Encoding: quoted-printable
Content-Location: http://www.irishtimes.com/newspaper/innovation/2008/1201/1227910397120.html
STAYING UP THERE - The Irish Times - Mon, Dec 01, =
2008
Firms can achieve a flexible workforce through staff incentives and=20
outsourcing initiatives, as alternatives to a redundancy approach, says=20
FRANK DILLON
IN THE midst of the gloom of a recent spate of job loss =
announcements, one=20
organisation's approach last month suggested that there was an =
alternative way=20
to reduce costs and headcount. Permanent tsb's initiative in =
incentivising staff=20
to take career breaks of up to three years (see panel), provided a novel =
approach to right-sizing an organisation for a period of economic =
slowdown.
Achieving flexibility over different stages of the economic cycle is =
a tricky=20
task for organisations. During periods of boom, organisations compete to =
get the=20
best staff in a process McKinsey consultants famously described as 'the =
war for=20
talent'. Ironically, in a downturn, many of these highly paid staff are =
then=20
made redundant.
Prof Jeffrey Pfeffer of Stanford University, one of the world's =
leading=20
management thinkers, is a huge critic of this boom and bust approach to =
human=20
resources. He cites the semiconductor industry as one of the worst =
proponents of=20
this cycle.
It lays off staff as soon as there is a downturn and =
then=20
pays large signing bonuses to get similar, or in some cases, even the =
same staff=20
back when market conditions improve. "It's a classic case of buying high =
and=20
selling low," he says, adding that such an approach also disrupts the=20
intellectual capital of the organisation at a time when, if anything, it =
needs=20
to strengthen it.
The inability of organisations to manage cycles is a worldwide =
problem.
"Redundancy should really be the last resort for an organisation," =
says=20
Michael McDonnell of CIPD. "There are a range of other options to reduce =
payroll=20
costs, including recruitment freezes combined with natural wastage, =
reducing=20
overtime and offering early retirement packages."
McDonnell agrees that a boom and bust approach does organisations no =
favour=20
and can be counter productive. "Where you announce a redundancy =
programme, you=20
run the risk that the most talented people - the ones who can more =
easily secure=20
alternative employment - are the first to leave."
Another issue McDonnell says organisations need to worry about is =
so-called=20
'survivor syndrome', where those left in the organisation are =
psychologically=20
damaged by seeing their colleagues leave, often leading to poor morale =
and=20
consequent loss of productivity. "The redundancy programme will have =
been=20
implemented with the desire to increasing competitiveness and =
productivity. In=20
some cases, it may have the opposite effect," he says.
One approach to having a more flexible and scalable workforce is =
through the=20
use of outsourcing. "If an organisation can plan its workforce around =
its=20
production or market demand cycles, that can be a huge advantage," =
McDonnell=20
says. "This means that when you have a downturn, you don't have to cut =
into the=20
fabric of the organisation."
Outsourcing, however, has a bad name in this country, McDonnell says. =
"The=20
debate about outsourcing has been led by the trade unions. They have =
presented=20
it in the context of the so-called 'race to the bottom'. They have a =
vested=20
interest in doing this as it represents a threat to their membership =
base."
Accenture has been one of the main drivers of outsourcing in Ireland. =
"Outsourcing gives Irish businesses access to highly skilled, lower-cost =
resources in a flexible manner, that can ramp up and ramp down with =
business=20
cycles rather than representing an ongoing fixed cost," argues the =
firm's head=20
of outsourcing here, John Staunton. "It enables an organisation's own =
employees=20
to focus more on its customers, on driving innovation in its products =
and=20
services and on taking market share in the current downturn," he =
adds.
Outsourcing initiatives provide an effective way of taking headcount =
out of=20
an organisation while still preserving employment for staff. =
Alternatively, many=20
activities can now be performed as managed services by an outsource =
service=20
provider, Staunton says. McDonnell says that organisations should also =
examine=20
other possibilities to redundancy.
These could include flexible =
or=20
reduced working hours which may suit certain employees' circumstances =
and which=20
have the benefit of keeping skilled and knowledgeable workers within the =
organisation. International experts agree that the best time to optimise =
headcount is during relatively good economic times and that organisation =
should=20
neither rush to fill position when they become vacant in good times or =
slash=20
them when there is a downturn.
Pamela Harper, consultant and =
author of=20
Preventing Strategic Gridlock offers the following advice. "From my =
experience,=20
working with companies experiencing gut-wrenching growth and/or change, =
breaking=20
the cycle of excessive right-sizing and layoffs can be avoided by =
thinking=20
strategically about positions before jumping to fill them. Uncovering=20
assumptions about what, who, where, when, and how jobs need to be =
accomplished,=20
often leads to more creative options and greater flexibility in =
achieving=20
company objectives."
Before deciding on redundancies, management need to tread carefully =
and not=20
avoid making hasty assumptions about who does what in organisations, she =
explains.
"I've often seen redundancies in jobs because of assumptions that =
were made=20
about who was performing which roles and responsibilities. For example, =
in one=20
company, I observed that two executives who thought they had different =
roles and=20
responsibilities, actually significantly overlapped in what they were =
doing.=20
Rather than laying off anyone, the two executives realised that there =
were=20
additional responsibilities that were not being addressed by anyone. The =
best=20
way to avoid excessive layoffs and right-sizing from redundancies is to =
not only=20
interview people about what they do, but to observe them in action."
Mark Salisbury, author of iLearning: How to Create an Innovative =
Learning=20
Organization agrees. "To get to the right size in terms of people,=20
organisations need to focus on the knowledge behind the work and uncover =
the=20
drivers of work - the performance objectives that need to be met by the=20
work."
This is the key to improving the efficiency of organisations and =
having the=20
right staffing levels in both good and bad times, he adds. Where =
redundancies=20
are necessary, many organisations are trying to take a more humanitarian =
approach to dealing with the personal devastation involved for employees =
forced=20
to leave.
Keith O'Malley of Career Consultants provides outplacement service =
for Irish=20
companies. He says that there has been a significant increase in =
inquiries in=20
recent weeks with many organisations planning redundancy programmes for=20
2009.
O'Malley says that organisations are trying to be as generous as =
possible in=20
their severance terms at the moment, but that these redundancies are =
being=20
forced by short-term financial pressures rather than more strategic =
initiatives=20
to exit markets.
O'Malley says that the challenges for those who lose their jobs will =
be=20
greater now than those faced in the 1980s.
"Back then, the gap between social welfare benefits and pay rates was =
far=20
less than it is now because of better social welfare entitlements for =
the=20
unemployed and higher rates of tax for those who were employed," says =
O'Malley.=20
"Those who are facing redundancy now will find it much harder. They =
really need=20
to get back into employment very quickly," he says.
Those who are facing redundancy now will find it much harder. They =
really=20
need to get back into employment very quickly
ROUGH TIMES: HOW TO DEAL WITH A DIFFICULT =
SITUATION
REDUNDANCY CAN have a devastating impact on those who suffer it, but =
experts=20
say there are many immediate positive steps employees can take to =
survive this=20
trauma and rebuild their careers.
"First of all, do not to take it personally, although it may feel =
like it. It=20
is something that is experienced by many of us and now has no impact on =
your CV=20
as it would have done 20 years ago," says Dr Ann Parkinson, subject area =
leader=20
for managing people and performance at Henley Business School. =
"Redundancy can=20
be a good opportunity to take stock of what you really want to do and =
for many=20
it can be a wake-up call," she adds.
She advises taking some time out, on a holiday, for example, to help =
get some=20
perspective. "But treat it as you would a holiday from work and come =
back=20
refreshed and ready to approach your job hunting as you would a project. =
It's=20
always a good idea to pay attention to your health and fitness at this =
time as=20
well. Walking is a good time to reflect and think about what you want to =
do."
Job seekers should be assessing the transferable skills that they =
have or=20
other skills they need to acquire to position themselves for new career=20
opportunities. "Keep in touch with your networks especially if you are a =
member=20
of a professional body as you will often find opportunities arising from =
networking, even if it is just being able to keep up with what is going =
on in=20
you area," she advises.
Cary Cooper, professor of organisational psychology at Lancaster =
University=20
Management School, agrees that this is a time to take stock of life and =
career.=20
"Reflect for a few days on what you really want to do. Don't rush into =
the same=20
job in the same sector.
The chances are that the sectors which =
are=20
making redundancies are not employing people," he says. "Look at your =
skills=20
base, what you are good at, and how this can be applied to other sectors =
that=20
are reasonably buoyant - then look for a job or consider opportunities =
to become=20
self-employed, using your skills and contacts."
Isolation and negative feelings need to be tackled to avoid getting=20
depressed. Cooper suggests getting support from your social and =
professional=20
network. "If you know somebody within business or industry who can help =
you look=20
at your other options, then seek them out. Government support is =
available to=20
re-train to gain particular skills that you feel you are missing, and =
this will=20
be free, but you have to take control and act on things yourself. Also, =
don't=20
worry if you are rejected for jobs along the way, as you will be."
STAFF INCENTIVES: NOT SO PERMANENT DEPARTURES
IT WAS an idea born in a management brainstorming session. Permanent =
tsb's=20
initiative to incentivise staff to take career breaks was devised as an=20
innovative approach to the organisation's need to trim short-term =
headcount. As=20
the deadline for applications to the scheme approached last week, the=20
indications were that the initiative had proved successful, according to =
the=20
organisation's HR manager, Laura Phelan.
"There has been a good cross-section in the applications so far =
between male=20
and female, and younger and more mature members of staff," she added. =
Phelan=20
said that it would take a couple of weeks to process the applications =
and to=20
arrive at a final figure for the uptake of the scheme.
At face value, the "incentivised career break" certainly appears =
attractive.=20
The scheme offers a paid career break where staff can receive up to 50 =
per cent=20
of their salary up to a maximum of =8020,000 for a two-year break - =
equating to=20
=8010,000 a year - while for those willing to leave the organisation for =
three=20
years, the incentive is 75 per cent of salary up to a maximum total =
payment of=20
=8035,000. The scheme is open to all employees who have two years =
service at the=20
bank.
When employees return after the career break, they are guaranteed a =
role at a=20
similar level in the bank in the same geographical area. The initiative =
is an=20
attempt to provide a 'win-win' for both organisation and employees. The=20
organisation saves payroll costs such as salary and pension at a time of =
shrinking business and market uncertainty, while employees get the =
opportunity=20
to study, travel or pursue other personal interests.
"We see it =
as a=20
better solution to trimming our cost base than offering a redundancy =
deal and a=20
good example of a partnership approach to an issue," Phelan says. "The =
reaction=20
we have got internally is that it is a novel approach and the voluntary =
nature=20
is seen as very positive aspect."
Restrictions in the scheme include not working for competitor =
financial=20
institutions during the duration of the career break. Employees are =
taxed on the=20
package, but most will find themselves paying only marginal amounts of =
tax.
A possible downside of the scheme includes the potential to lose out =
on=20
promotion or career advancement during the period of leave.
This article appears in the print edition =
of the=20
Irish Times
ADVERTISEMENT
Latest =BB
21:58Wasteful=20
Liverpool fail to take full advantage
21:30Hanafin=20
seeks to reassure pension holders
21:10Road=20
crash in Egypt kills 14, injures 11
20:32Obama=20
appoints Clinton and keeps Gates
20:23India=20
demands Pakistan act decisively on Mumbai attack
20:20US=20
House to push $500 billion stimulus bill
19:38Nigerian=20
town emerges from days of clashes
A catholic approach to=20
learningAs keeper of the Catholic flame, Bishop Leo =
O'Reilly=20
is keen to ensure that matters of faith are still given robust =
consideration=20
in a new educational landscape which reflects the diversity of a new=20
Ireland
Learning to box clever for=20
lunchBringing your own food to work - whether it is a =
sandwich=20
or something more exotic - is a surefire way to trim the fat from your =
expenditure as these financially challenging times begin to=20
bite
Fruit of their own=20
endeavoursWhen children grow and pick their own fruit =
and veg,=20
they will eat it - some schools have found
Tackling the poetry=20
patriarchyIrish poetry operates in something of a=20
male-dominated culture, but is being a female poet a raison d'etre or =
a clunky=20
categorisation? Fional McCann canvasses five well-versed =
women
Trainee teachers face unsure=20
futureThere was no talk of recession or education cuts =
when=20
the current cohort of trainees signed up to become secondary school =
teachers.=20
But things have changed and, uncertain of getting a job, some are even =
thinking of emigrating
![](3D"http://www.irishtimes.com/homepage/images/lhstopfeatures/121391728=)
Email @ireland.com![](3D"http://www.irishtimes.com/homepage/images/lhstopfeatures/121987527=)
Find your ancestors![3Dirishtimes.com=20](3D"http://www.irishtimes.com/images/v3/generic/irishtimes-logo.gif"){kind=logo}
<=
/A>
![3DSHOWERS=20](3D"http://www.irishtimes.com/weather/icons/small/showers.gif"){kind=icon}
![3DRAIN=20](3D"http://www.irishtimes.com/weather/icons/small/rain.gif"){kind=icon}