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Staff Cutbacks Can Impact Your Business Processes & Increase Your Risks

We have all read about the ongoing cutbacks over the past months; with the most notable cutback being staffing levels.  These volatile situations put pressure on organisations and their management to perform more profitably.

Many organisations have cut back on contractors and staff levels by up to 10% or even more.  The biggest impact of this being on the unlucky individuals made redundant, however, there are a number of other impacts that may be overlooked in the drive to reduce headcount and the bottom line of payroll. I want to you to consider some questions and look at some of these impacts and what their effects could be.

Have the right people been made redundant?

In many cases the simple answer to this may be no.  Shareholders and accountants often decide to reduce staff across the board by 10%; without considering if they are the right people to be made redundant.

What happened to skills and knowledge of those that have been made redundant?

This is easy to answer and the fact is that the skills and knowledge are lost. When making staff redundant organisations want them to leave as quickly as possible with as little fuss.  The downside of this approach is that there is little in the way of a handover and the knowledge they have leaves the company with them so remaining personnel may not be knowledgeable or competent.

Did the organisation manage the changes correctly?

This a fairly critical one and in a lot of cases the answer is no they did not.  Organisations and people fear change; and with that fear comes the outcome that many organisations don’t manage their organisational changes correctly and in doing so increase risk.

Are our operations now at higher risk?

If organisation doesn’t carry out a detailed Management of Change prior to redundancy then there is the concern that the wrong people are made redundant and with that there could be an increase of the risks associated to health & safety, quality, operations and ultimately increased financial risk.

Where does their workload go?

This is an interesting one and many people I have spoken to have said, that the remaining staff are expected to ‘take up the slack’.  Are we to assume that the people made redundant were not busy doing any work? Were they sitting around surfing the web or playing golf?  No they weren’t; they were no doubt busy doing their jobs using their skills and knowledge.  So you now have 90% of the workforce doing 100% of work. Do they have skills to do the work? Did they get trained for this additional work? Did they get a handover from the previous people doing the work?  The answer to these three questions is probably NO; so we are back to increased risk.  We also now have potentially overworked; stressed staff working extra hours with low moral and with those ingredients come increased risk of accidents and mistakes.

When the industry and order books pick up again, are we ready for it?

We have all been here before over the years and the result is that a lot of the talent, skills and knowledge will be gone and won’t be coming back.  So we will employ new personnel that don’t have the necessary skills, training, knowledge and competency and we will need to get them up to speed; but that takes time.  During that time, they are not fully productive, they are green and they won’t work efficiently, correctly or safely and again we have increased risk.

Are there smarter ways to deal with these issues?

Reducing staffing levels can be a sensible and logical thing to do; but the changes need to be properly reviewed and managed to ensure that risk to the business is not increased. Further cost and risk reductions can achieved from the development of effective and efficient business processes which are vital for sustainable operation and will enable organisations to better manage their operations in a future market where profit margins are lower than we have been used to.

There is some common focus areas mentioned so far:

  • Management of Change
  • Process Management and Improvement
  • Risk Management
  • Training, Awareness and Competency

Each of these aspects are important requirements of the new QHSE standards coming soon with ISO 9001: 2015; ISO 14001: 2015 and ISO 45001: 2016, so is your organisation managing them correctly? If the answer is no or even if you don’t know the answer; then Agility Systems can help your organisation better manage these requirements and problems using our powerful and successful software solution which can assist you:

  1. With capturing and controlling all the elements of a proposed change (such as where can we reduce headcount?) and focus you on the potential impacts and ensure that the change is managed and can be done in such a way to minimise the risks to the organisation.
  2. Taking your existing Management System procedures and convert them to process maps that will enable your organisation to review and improve the efficiency of your operations.
  3. Recognising and manage all types of risks within the operation and integrate the risks and controls directly into your Management System processes so that they are clear and easy to follow for personnel.
  4. Enabling you to better manage your documents and ensure that personnel can find them quickly and they are the correct up to date revisions.
  5. Define competencies, linking them to roles and people and ensuring that you have captured and managed the knowledge that people have.

We can also help you with understanding the new versions of ISO 9001: 2015; ISO 14001: 2015 and ISO 45001: 2016 as we regularly run awareness sessions.

And if you think that Agility is expensive, complex and needs additional IT equipment; think again as Agility is now available in the Cloud and you can even pay for it monthly rather than taking a big financial hit at the start.

So if you want to: better manage change; improve process efficiency; control your documents; identify competencies and meet the new QHSE Standards then call Agility Systems today!

Alan McInnes, CMIOSH, MIIRSM, ACIQA

 

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