Who should stay and who should go
The recent developments around German holiday airline Condor shed some light on one of the most difficult questions in crisis management, its aftermath, and organisational transformation in general: Which employees are critical to keep and which employees are easy to replace.
Although scientists proclaim human resources are the most important resource for any business activity, a crisis or change scenario puts financial limitations on the possibility to keep employees on board. Therefore, it is crucial to optimize the workforce structure in all types of scenarios.
During a crisis, employees increasingly become attracted to seek out for better opportunities and leaving their company because they believe it might not be able to survive or provide long-term opportunities to employees. Unfortunately, in most cases it is the best people that decide to leave first. Retaining them can become a question of survival. In contrast, during a merger or any other company transition, organisations may either have redundant job roles or duplicate job holders, which leads to the question: Who should stay and who should go?
Both scenarios clearly demonstrate the need for a solid understanding of the capabilities within the workforce, as well as the successful management of the retention of human resources. Hence let’s take a look at the options.
Workforce capabilities knowledge
Traditional organisations rely on job descriptions to describe job duties and to define critical roles within a company. Though this might be a more or less accurate approach when hiring new people, typically those descriptions are rarely revised once the job holder is hired. Additionally, each individual tends to transform the role he or she was initially hired for based on competencies brought into the role. As a result, comparing job descriptions in defining redundancies or comparing possible duplicate jobs during a merger process does not necessarily lead to optimal results.
We propose using job portfolios that will be defined on a regular basis which further incorporate both, a management and an employee perspective. A job portfolio is partly defined by management’s expectations and completed by the actual activities of the job holder. By nature, both sides tend to be influenced by various biases based on the interest of the employee and the corresponding supervisor. To address this, each job portfolio should be created or reviewed by an external expert knowledgeable of the respective topic. Furthermore, this ensures neutrality especially in cases of redundancy decisions. Obviously, the external expert needs to understand the roles from a commercial or operational perspective and not from an HR–only perspective.
Four layers of employee retention
Employees tend to stay with organisations based on one of the four reasons of employee retention, or a combination of them:
- Legal retention
- Behavioural retention
- Sense of duty retention
- Emotional retention
The most obvious way to ensure employee retention is through legal or contractual measures, which can either be based on compensation structures or by applying long-duration notice periods. However, it must be noted that this method of retention promotes opportunistic behaviour and inherits the risk that an employee is overcompensated or enjoys a notice period that reduces required flexibility. Using expert information and market insights does assist in defining an appropriate retention scheme.
This layer of retention can be described as retention by stability. Within a stable environment, employees are more likely to stay as they are used to their surroundings. In times of organizational change this becomes particularly important. By nature, change is removing stability and creates an atmosphere of uncertainty, which motivates people to leave . Proper change management executed with the help of industry experts can remove portions of the uncertainty and therefore draw a clear picture of a stable future.
Sense of duty retention
Employees feel a sense of duty if their employing organisation invests in their careers and personal development. Using this as a retention opportunity is considered successful if the investment of the organisation is meeting its own needs and the needs of the employee. This task is best achieved in customized trainings geared towards challenges of the industry and organisation alike.
Emotions are the most powerful way of keeping people committed, let it be goals or organisations. To light the emotional fire, organisations have to possess and communicate a clear vision and purpose that is drilled down to all levels of the organisation. This drill down requires a great sense of purpose and the confidence in all levels of the organisation that a crisis or transformation is leading to a more successful and hence better future, again assisted by a clear picture of the future.
In summary, dealing with employee decisions is important for any organisational transition. Given the importance, an HR view alone is not going to be a sufficient response and should be expanded by an unbiased expert view with an understanding of market dynamics and the business in general.