With turbulent economic times forcing employers to scrutinise people-related costs more closely than ever, PricewaterhouseCoopers LLP reminds businesses that flexibility is critical to sustaining business strategy and responding to market changes. The firm has identified 12 primary ‘people cost’ areas that companies should be assessing and taking decisive action on. These are: pensions; headcount; absence management; expenses; use of contractors; analytics and benchmarking; pay and productivity; incentives; employee benefits; secondments and mobility; flexible working; and HR and finance effectiveness.
Michael Rendell, partner and global head of human resource services, PricewaterhouseCoopers LLP, commented: “The manufacturing industry has taken the lead on offering reduced salaries to save jobs, but businesses in all sectors need to consider different ways to reward and deploy their staff to minimise redundancies.
“Options include opening out flexible working or job-share arrangements to staff who wouldn’t usually qualify. Introducing or revisiting polices on sabbaticals, international assignments and secondments would also benefit many industries. Some employees would welcome the opportunity to take a career break or experience working temporarily in an emerging market or a different organisation, perhaps a client or charity.
“If companies harness the flexibility and creativity needed to minimise redundancies and keep business strategy on track, the workforce at the other end of this downturn could look very different. Larger businesses tend to be slow to respond to market changes – this focus on working practices and policies could help bring the agility they should be striving for.”
The slowing economy is just one of the factors affecting long-term business health. Demographic changes, resource scarcity, climate change, health and wellbeing, globalisation and technology are impacting organisations’ potential to stay profitable and compete effectively. And having the right people in the right place at the right time is crucial to facing these challenges with confidence.
Rendell concluded: “Cash-strapped companies may be feeling the pressure to reduce headcount but this can be a costly exercise – both in terms of payments in lieu of notice and recruiting employees when the market picks up. Keeping staff, in whatever capacity, will make it easier, cheaper and quicker for companies to react when market opportunities and challenges present themselves.”
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