Imagine this. 'To plan our headcount reduction, we are going to write all employees' names on the wall. Then I'll close my eyes and throw darts. The ones who get hit leave the company. The process will be just about random, but we'll tweak it slightly by writing the better employees' names larger so that they're more likely to be taken out.'
Yes, it sounds demented. But it goes on all the time. It's called a recruitment freeze. Here's why waiting for people to leave and not replacing them is a very bad way of cutting costs.
It ignores strategic priorities. You may have decided to do more marketing and less sales, but if a first-class marketing person quits and a mediocre salesperson doesn't, that's a cut in marketing.
It lowers the quality of your workforce. In a recruitment freeze, the best leave first. Your good employees are the ones who will find it easiest to get a new job. They know this and they will be first to start looking. Especially when they realise the depth of desperation and foolishness you have sunk to by adopting this policy in the first place. So you're left with the deadwood while the live wires end up working for your competitors.
It's random. Some of your activities and employees are more valuable than others. So why would you let the hand of fate decide who stays and who goes?
Like Count Dracula, this horrible idea keeps rising from the tomb. It's popular, because it's a soft option. The alternative, making tough decisions about specific redundancies, takes clarity of intention and strength of character. It's also the right thing to do.
- Alastair Dryburgh is chief contrarian at Akenhurst Consultants. Read more at www.dontyoubelieveitblog.com