Headcount Reduction: A Necessary Evil Often Poorly Executed
It’s inevitable in difficult economic conditions that corporations shed jobs in order to survive. A business is like a ship, when facing trouble it has to discard everything that isn’t absolutely essential to it’s core operation and cast it “over-board’. No leader worth their salt enjoys laying people off, however, survival must be the priority in difficult times for the good of all stakeholders from investors to current and future employees.
Like everything in life, it isn’t so much about what you do but how you do it. Many corporations apply little intelligence or sensitivity to the process, it’s often conducted as a numbers game, with the inevitable loss of key talent. In the creative economy business ignores talent at a cost.
Sadly, when headcount reductions are poorly handled, talent walks. That creates medium to long-term pain in terms of increased cost and poor performance. Replacing talent with many years of experience and intellectual property is a number few organizations are willing to measure. It doesn’t take much to work out why. Then there is the inevitable impact on the performance of those surviving the process. Unfortunately, it’s a significant threat that few organizations appear to be taking seriously.
