Q: How many HR managers does it take to change a light bulb?
A: Four. One to assess the risk of the light bulb changing process, another to consult the light bulb and its stakeholders, yet another to ensure that the health and safety procedures are being adhered to while the bulb is being changed, and a fourth to actually change it.
‘Tis the season for redundancies. The question is whether Australia’s HR managers are up to the job.
In recent weeks, we have seen ANZ Bank announce it will cut 1000 jobs, while Westpac is slashing hundreds more, Qantas is axing 500 jobs and reviewing hundreds of maintenance positions after reporting a sharp fall in first-half profit, the Baillieu government is getting rid of 3600 public servants, Holden is cutting about 100 'casual and flexible' jobs at its Elizabeth plant in Adelaide, Toyota is slashing 350 jobs due to pressures caused by the high Australian dollar and hundreds of workers at Alcoa are now waiting for the pink slip.
This will continue. We are entering a boom time for Australia’s $3 billion outplacement industry, which assists people who are getting the chop to find new jobs. And if more companies are cutting instead of hiring, you can bet recruitment agencies will be hanging out their shingles as cheap outplacement agencies. Companies will be paying a lot of money for their service. The problem is that HR managers aren’t doing anything to ensure their companies are getting value for their money.
Let’s say for example that Alcoa sets aside $500,000 for the outplacement of 600 workers whose jobs are now in jeopardy. That’s a standard industry fee. You’d reckon the HR people would check to see how the outplacement agency worked to place people in jobs. That’s just to make sure the company isn’t wasting its money and to see there is a return on investment. Think again.
Research by outplacement agency Choice Career Services has found that fewer than 20 per cent of HR managers actually requested the outplacement agency to tell them how they had managed the process. That suggests that as far as they were concerned, they were just happy to get a problem off the books. It also tells us that the HR managers are not being financially accountable for an event that they are supposed to be managing. At the same time, HR managers all reported they had an excellent experience with the outplacement agency. Go figure.
Choice Career Services director Damien Menzies says that HR managers tend not to ask how the employees are coping and whether they have another job. Choice Career Services has 25 big listed clients. "I can count on the fingers of one hand the number of ones who have done any follow-up,’’ Menzies says.
Significantly, 54 per cent of HR managers reported no change in the performance of the company as a result of the redundancies. This is even more remarkable given that no company makes a decision to downsize without a strategic goal in mind, be it to cut costs, refocus the company on its core business or improve productivity. That must be news to the HR managers who, according to Menzies, need to become more commercially accountable.
Jannine Fraser, managing director of outplacement agency Directioneering, says HR managers do seek feedback from her firm but that only tends to happen on "deep” projects where there is a high fee of up to $30,000 per ex-employee. She compares it to the attitude you would have to a car that cost you $100,000 versus one that cost $20,000. You expect more from the $100,000 one. "It doesn’t tend to happen at the cheaper end,’’ she says.
Margaret Harrison, managing director of Our HR Company, says the lack of follow-up from HR is typical of the industry. "From my experience, it’s a case of I’ve washed my hands of you, I don’t want to have anything to do with you but to make us look better, we will give you some outplacement," Harrison says. "But there is no follow up, once you are out the door, you are out of the door."
"There is never a monitoring factor. It’s simply hand over the bucks and we feel really good and we can tell our shareholders that we have been good corporate citizens. There is never any follow-up, ever. The HR people are not financially accountable at all. All that money goes out for a feel-good purpose, but they don’t care a rats whether the person has a new job.
"There is also no assessment of how the outplacement service functioned, whether they did a good job and whether they got people into employment or not into employment.”
Hugh Davies, managing director of outplacement agency Macfarlan Lane, says HR managers only have to ask simple questions after three months: did the outplacement agency understand the company, its capabilities and values and what it was looking for; did people get good coaching for the transition; did the outplacement agency provide sufficient resources; was the service effective and would you recommend the firm? Curiously, these are questions HR managers never seem to ask. They don’t measure the quality of the service the company has paid big money for.
Davies says having no follow-up can damage the business. "Organisations that just tick the box and send people off to low-cost, unmeasured outplacement providers end up with a very poor employment brand,” Davies says.
"People, as you know, talk with each other on the social networking sites and apart from failing in their duty of care to someone who has lost a role, you’re actually trashing your own employment brand if you buy and don’t measure the service.”
All up, it suggests HR managers are not doing the job they’re paid to do. We can expect to see low-cost outplacement services setting themselves to take advantage of this wave of redundancies but there will be no follow-up. Unless HR managers get their act together, we will see more companies wasting money.