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Cutbacks and moral dilemmas

OS Magazine, Career Clinic, January 2009

Dear Richard

I’m the Office Manager, responsible for admin, in a medium-sized, successful business. Over the last few years I’ve built up a really good team of hard-working, committed people, but because of the economic downturn my Directors want to cut my team by a quarter, which is three people. Our sales have fallen a little, but we’re still profitable and everyone expects this to continue. This decision therefore makes no sense to me, but I’ve been told that it isn’t up for discussion. I don’t know what to say to my team, but nor can I afford to make a big fuss and risk losing my own job. What should I do?
 
Kirstin   (Full name and address withheld)
 

Dear Kirstin

You face a difficult situation and I really feel for you. 

You seem to think that your business doesn’t need to cut costs and that the redundancies are unnecessary. You could be right; it’s been known for cynical managers to use recession as a smokescreen to make unjustified cutbacks or changes.

However, there may be good reasons for this action. Businesses are currently facing enormous challenges with financing. Bank facilities that have been renewed for years are suddenly being withdrawn because of the credit crunch. Your firm may appear to be doing well, but if the Directors need to renegotiate banking facilities, they might be worried that the funds won’t be available. They could also be aware of financial difficulties amongst your key customers. All this leads to caution and it’s understandable that they may not wish to talk openly about their concerns.

Democratic discussion may not be appropriate in the current climate. I’m reminded of Elizabeth Moon, who ran a highly successful group of London secretarial agencies. Usually fiercely democratic, she would say: “If the building’s on fire, you don’t need to discuss it, you just need someone to say: “That’s the quickest way out – go!” 

In the circumstances, perhaps the most sensible option is to trust the judgement of those in charge. This will be easier if over the years you have come to respect their competence and integrity.

What can you do to help your team? The most practical step is to make sure that anyone who is made redundant is treated properly, with the correct consultation and within legal requirements. There’s a mountain of advice on redundancy procedure and a good place to start is www.businesslink.gov.uk. I imagine that your remaining team members will be grateful that they’re still in a job and will need little encouragement to rally round. 

As recruiters since 1947, we know all about recessions at Gordon Yates. In a downturn, I feel passionately that if a company doesn’t have to reduce staff to survive, then it should do the opposite because this is when amazingly talented people are found on the job market. Your influence over recruitment may be limited, but if an appropriate opportunity arises, you might want to sow the seeds of the idea that when everyone else is laying off staff, your company should do the opposite and upgrade the quality of the workforce. 

Anyone who needs convincing of the wisdom of this should read The Snowball, a biography of Warren Buffett, the world’s most successful investor. It’s a fantastic example of how to succeed by not following the crowd.

In times such as these there are no easy answers to your situation. Working life in 2009 is likely to be more challenging than ever. Ultimately, it is a time to be true to your own values and judgement. I wish you well.

Richard Grace
Joint MD, Gordon Yates

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