06-05-09 Cust-cutting: more complex than originally thought
The stated problem is relatively simple: (for the time being,) means are insufficient to continue functioning at the level the company is used to and so, cutbacks have to be made. In practice, CEO’s and HR managers are facing more questions than they can provide an answer to. These were the main conclusions the HR Gallery participants came to march 30th in Mechelen.
How temporary is temporary?
To warm up, Dirk Wijns, director of Legal Consult and Compensation & Benefits, provided an overview of the different possibilities HR managers and CEO’s currently have to cut back on costs. The key question the presentation put forth concerned the temporality of the crisis: how temporary is the economic situation we are currently faced with? This is important because many of the decisions companies make today depend on how long they can sustain turnover reductions. For the time being, it appears that mainly contractors and temporary employees are being shown the door. Another trend is that organisations want to hang to their talent so as to recuperate from the crisis quickly and strongly. The question, however, is how long this strategy is a viable and profitable one. Moreover, a simple calculation showed the Gallery participants that letting talent go is perhaps cheaper than hanging on to it. For example, assuming that the crisis will last another six months and that an employee earns a gross salary of 3000 Euro, that employee will cost the employer 28 200 Euro (RSZ, 13th month and vacation money included.) Dismissing the same employee after 3 months would cost the employer 14 100 Euro. Wijns: ‘As an employer, the second scenario leaves me 14 100 Euro to better compensate future talent.’
HRM is a necessity
Just how long the crisis will last was also the main issue in the debate that followed with Alex Joos, CEO of Groep Joos, Dirk Wijns and Flor Boeckx, Country HR Manager België & Nederland DuPont de Nemours. “We have indeed opted to take measures at the start of the year that would last throughout the year,” says Flor Boeckx, “but if the crisis continues much longer we might have to consider taking other steps.” In response to the question whether the crisis undermines the relationship between the HR manager and the CEO, Alex Joos had the efficient response; “We are actually currently looking for an HR director because we find that it is in times of crisis that we expect added value from our HR management. Today, more than ever, HR has the capability of providing vital information on functions, distribution of working hours….” Boeckx also supports the idea that HR has great added value during economic crisis: “Our CEO recently took it on herself to publish a piece in our online newsletter with the provocative title ‘never waste a good crisis.’ In de piece she encourages employees to think about the companies activities and HR definitely also needs to do this: think about which strategic steps need to be taken with the available human capital.”
Labourer – office worker
The difference in statute of labourers and office workers, came up both in Wijns’s presentation and the debate. All speakers agreed that labourers are to some extent paying for the crisis in consequence of the measure for economic unemployment. On the other hand, everyone also agreed that now is not the time to equalize the two statutes. However, they remarked that today does perhaps provide a temporary opening both with labour unions to discuss adjusting CAO’s and with office workers who are prepared to temporarily hand in working hours and wage.
