1. Employment Practices 03/05/2009
Conducting Business with Less Staff
Paula Santonocito
Many companies are operating with significantly fewer employees than they had at this
time last year. How does a pared-down workforce impact the organization? How does it
impact HR?
A look at the numbers
There's no doubt that staff reductions have been widespread. In January alone,
employers eliminated nearly 600,000 U.S. jobs. What's more, companies in nearly every
industry have cut jobs.
Consider some of the numbers from the first two months of this year. Department store
chain Macy's announced it will cut 7,000 jobs. Caterpillar, the leading maker of earth-
moving equipment, will remove 12,000 full-time jobs and 8,000 contractor positions from
its payroll. Health insurer WellPoint will lay off 600 workers and eliminate 900 open
positions. Wireless service provider Sprint Nextel will cut 8,000 jobs companywide.
And these four companies from four different business sectors represent only a fraction
of what's happening throughout the country and much of the world.
Indeed, Michelle Lewis-Blossman, principal and southwest regional leader for Mercer's
HR Effectiveness consulting practice, says so many organizations are experiencing
workforce reductions today, indicating that sometimes the numbers seem to be arbitrary.
Companies decide on a round number or a set percentage and reduce staff accordingly.
Weighing the impact
Instead, what Lewis-Blossman advocates is attention to the Alfred Chandler model of
structure follows strategy.
When an organization anticipates and then follows through on these kinds of changes,
they should consider whether their strategy has changed, she says.
Lewis-Blossman tells HRWire that an organization should start with a comprehensive
understanding of its budget and make reductions in a detailed way. This involves looking

2. at where cuts will have the least impact. Wherever staff is providing the greatest value
should be areas where the organization is less likely to cut.
If an employer takes this approach, if it makes a surgical decision, it is starting in a much
better position, she says.
Broad cuts, on the other hand, put the employer in the position that someone has to
assume the remaining duties. As a result, the company must re-examine the roles and
responsibilities of the retained workforce on a departmental basis.
Changing responsibilities
As an example, Lewis-Blossman cites the HR department, indicating that less hiring may
result in a need for fewer recruiters. If this is the case, perhaps recruiters can be utilized
in sales or marketing, areas where there is still demand for the skills and expertise these
employees possess.
However, these kinds of shifts require training. quot;Typically people think training is out the
door in a challenging economy,quot; says Lewis-Blossman, acknowledging that soft-skills
training usually does get cut.
However, she says that hard training, how-to training, becomes essential during periods
of restructuring.
Lewis-Blossman tells HRWire she works with companies that have been restructured in
an effort to try and avoid bankruptcy and that they have people who walk them through,
on a function by function basis, how the business will change.
She recommends a similar approach for organizations that lay off large numbers of
workers. At the same time, Lewis-Blossman recognizes it's not easy.
quot;It's challenging because everyone thinks what they do is core because that's human
nature,quot; she says.
Nevertheless, in every organization there are ways to differentiate between what is core
vs. non-core. Using education as an example, Lewis-Blossman points to how most
organizations say, quot;never touch the classroom,quot; which might mean services provided by
the central office get reduced.
For HR and other members of the management team, such analysis may be new. quot;A lot
of people just haven't had to operate in an environment like this,quot; Lewis-Blossman says.
Primary focus
Once job cuts have been made, it's not only about reassigning tasks and providing the
necessary training.
HR and management should also focus on how to re-engage staff and how to get the
most out of retained employees, Lewis-Blossman tells HRWire.

3. Here, too, attention to core vs. non-core becomes important. quot;I think it's about
delineating roles and responsibilities,quot; Lewis-Blossman says.
And she indicates HR can play an important role in helping managers conduct this kind
of analysis.
For many managers, assistance is necessary. As Lewis-Blossman explains, for the last
15 years or so, at most organizations, things have been going along great, with additions
to staff, set positions, and clear expectations. Now, however, retrenching and
realignment must occur.
HR and others regroup
Although HR can and should provide assistance, HR professionals also need to
recognize their limitations.
In many organizations, HR has become an on-demand customer service function, and
anyone who walks in the door thinks HR is there to listen to them, Lewis-Blossman says.
This may have been okay in the past, but today HR isn't in a position to field every
inquiry because it too faces changes.
Therefore, Lewis-Blossman recommends that organizations train managers to deal with
front-line issues.
In a similar vein, to the extent that roles and responsibilities change, there may be more
opportunity to rely on systems and technologies.
quot;What's interesting is that at the same time organizations are cutting costs it's almost the
same time to be reinvesting,quot; says Lewis-Blossman.
This may or may not require capital investments. quot;It may be time to teach people to get
up to speed on a new system,quot; Lewis-Blossman says.
Sooner rather than later
Still, even though analysis can be conducted and adjustments can be made after staff
reductions, proper planning can make it easier to conduct business with less staff.
According to Lewis-Blossman, a detailed understanding of the budget and an
understanding of what is core and what is not core allows for more responsible
structuring, for an approach that is more surgical.
To go back afterwards and then move the pieces is more difficult, she says.
In the current environment HR may find it especially challenging to address staff
reductions after the fact. Lewis-Blossman points out that in addition to a pared-down
workforce HR is experiencing a variety of elements, including an increased workload as
it tries to manage internal as well as external changes.

4. Contact: Michelle Lewis-Blossman, principal and southwest regional leader, Mercer's
HR Effectiveness consulting practice, michelle.lewis-blossman@mercer.com.
© 2009 Thomson/West