Adjusting workforces for the new reality

The largest cost in many industries is personnel. And in many industries, personnel challenges arise along two disparate dimensions: on one hand, there is a need for cost reduction through less staff; on the other hand, skills and capacity gaps require hiring new people and managing talent, claim consultants from the Boston Consulting Group.

The management and maintenance of these divergent needs is a challenge, say the consultants. The existing workforces of many companies are often under-managed; the tendency to view the workforce as one homogeneous group has resulted in an upward pressure on numbers and pay rates. Most companies also suffer from limited HR instruments and, more importantly, from the lack of a clear overall HR strategy, the absence of which allows fragmented historical practices and processes to persist.
Companies must at the same time retain critical know-how as well as find and develop new talents and skills—a particular challenge for those in countries with aging societies. This is what BCG advises:

Managing the effort from start to finish must be a priority for senior executives. Any personnel adaptation initiative must be given a clear priority. Furthermore, all responsible senior executives of the company must support a chosen approach and keep their focus on it throughout the implementation phase.
Ensure “one-stop” competence. One central office should be established and charged with full ownership in terms of conception, development, communication, and process steering, including provision of guidelines and binding rules that must be followed by all individuals involved.
Focus on the underlying issues, not just on symptoms. An organization should build processes and incentives that both address the root causes of its personnel imbalances and allow sufficient flexibility for problem solving along the way, using state-of-the-art tools to ensure transparency on all key issues.
Involve the organization’s employee representatives. An organization should prioritize transparency and enter into target-focused and cooperative negotiations with employee representatives.
Make it happen. The start-to-finish project plan should include a rigorous approach to communication and implementation and establish clear lines of responsibility.
Review your success. State-of-the-art processes and analytical tools should be used to capture detailed, real-time data. The project plan should also allow for regular reviews in which potential issues are considered.  

(03|2013) Source: Bcgperspectives.com