People

What is the issue?

After years of uninterrupted growth, companies can no longer rely on the key success factors that have stood them in good stead in recent years. To survive and succeed through this uncertainty, boardrooms need to identify what their business and employees should to be doing differently to ensure they are in a strong and agile position for the future.

A critical first step for businesses is to identify the talent that cannot be lost. Ensuring the right reward structures are in place for employees will keep you ahead of your competitors. To support this, regularly communicating with your employees will reinforce their commitment to your business and increase your chances of retaining them both now and when the upturn begins.

Companies that manage people costs effectively, whilst motivating their employees to flex their output according to business needs, will survive where others fail. Costs such as share schemes, sickness pay, benefits and car schemes are often over-looked and represent opportunities for quick wins to ease the hit to your balance sheet.

The pension scheme can also be a significant financial burden, however, there are a number of ways to justify reducing your cash commitment. You do not need to wait until the next valuation is due to review this. During turbulent times, it is important to make decisions quickly.

When times were buoyant, you may not have paid so much attention to your financial housekeeping. Now, more than ever, you need to be confident, that you have robust policies in place and that your employees adhere to them.

When there is no alternative to redundancy, planning is essential. Identifying ways to keep the employees who are vital to the business and drafting communications to engage staff effectively during the process is critical. To keep the process as painless as possible, managing the legal complexities, using tax efficiencies and making tough decisions quickly will minimise the time, cost and risk involved.

What questions should I ask myself?

• How is the current economic environment affecting my people needs?
• How am I using my workforce differently to reflect my changing revenue streams?
• Have I quantified all my direct and indirect people costs and what am I planning to do to reduce those costs?
• What impact has the market volatility had on my pension scheme? Have I reviewed my cash commitment to the scheme and reviewed alternative ways to secure the pension?
• How am I motivating and rewarding my workforce?
• How am I using performance ratings to prepare in the event of a headcount reduction?
• If redundancies are being considered, how am I planning to manage the process?
• How will I minimise the impact of redundancies on maintaining productivity and ensuring I retain key talent?
• When did I last communicate with my employees?
• Are I aware of the legal and tax changes on redundancies since the last downturn?
• What is the ratio of my contractor bill versus my full time employee costs?
• Have I looked at ways to make my incentives more financially efficient?
• What is my rate of absence and how much is it costing me?
• How robust is my expenses policy and how rigorously is it being applied?
• How is overtime being monitored?