Redundancy a last resort
What a difference a year makes. A whole new set of challenges have appeared for industry practitioners in the 12 months from last year’s Cayman Islands Society of Human Resources Professionals conference to this. The sixth annual conference, held at the Marriott Beach Resort and titled ‘If the bubble bursts…how will you manage and motivate your talent’, therefore brought together a range of local and overseas experts in the field to speak with delegates to prepare them for the worst case scenario. Business Editor Lindsey Turnbull was in attendance and reports.
The downturn in business due to the global recession was inevitably going to affect the Cayman Islands at some point, as former Education, Training, Employment Youth, Sports and Culture Minister Alden McLaughlin said in his opening remarks at the CISHP conference: “When the US sneezes we all catch a cold.” In the last few months the recession has begun to hit Cayman hard with shock news of redundancies beginning to creep into the headlines. How to deal with the consequences of a downturn in business was therefore a central theme for speakers.
Although delegates heard from a wide range of HR professionals who all attacked the issue of dealing with staffing during an economic recession from their own individual angle, the message gleaned from each presentation was continuous and clear: redundancy should only be contemplated as an extreme last resort cost cutting measure and only when every other cost cutting measure had been contemplated and implemented. The reason for this was made crystal clear by all presenters: redundancy causes severe unrest and upset within a company’s staff, which is, according to the HR experts, the very worst possible outcome, at a time when companies need staff to all pull together and rally round, working for the good of the organisation as a whole.
McLaughlin said that he believed that the bubble had already burst and it was therefore up to organisations to manage and motivate talent right now. He said that government understood that redundancy was not conducive to a happy workforce and therefore, although government had implemented a hiring freeze (except for exceptional circumstances) they did not intend to lay off any civil servants.
“Laying off civil servants could cause more problems for government,” he said. “It is a difficult decision but we believe it is critical to our success that civil servants do not have to live with job cutting concerns.”
He continued: “Redundancy has such a demoralising effect on staff, living in constant fear of who’s next. In my role as Training and Employment Minister, people naturally seek me out on this issue and so it is a highly appropriate topic for discussion as it is a huge challenge that we face.”
John Harvey, CEO of Mike’s Group of Companies in the Cayman Islands gave a fascinating presentation on the importance of implementing performance management into an organisation. To highlight the importance of motivating staff through sound staffing policies, rather than demoralising them through threat of redundancy, Harvey said: “People do extraordinary things for each other, when they care.”
Continuing on this theme, the next presenter, Douglas Soares, partner with Bermudan firm Expertise, gave a riveting presentation on cutting labour costs without cutting labour.
Soares said that businesses during this recession risked “being impaled on the horns of a dilemma: they must provide extraordinary value just to keep current business but must simultaneously look at squeezing costs down just to preserve the current margin.”
Redundancy, however, had to be viewed as the ultimate last resort, once a company had gone through a succession of measures to achieve lower costs beforehand.
“People have to be a company’s main focus, because economies such as Bermuda’s and Cayman’s have no other way to make a business apart from the selling of expertise and services of our people,” Soares stated. “The contribution of every ounce of intellectual capital needs to increase in tough economic times. And if the Cayman Islands doesn’t do it, then Bermuda certainly will!”
Dorothy Hill, from the Society of Resource Management said that executives often think they understand the concept of motivating staff without installing proper policies to ensure this actually takes place. “Executives can often be heard stating that ‘People are our most important asset’, yet statistics indicate that 83 per cent of staff are just waiting for the economy to get better before they quit their jobs.”
Hill said the concept was slowly sinking in, however, as she continued: “More and more CEOs and Boards are beginning to understand that people give the company its competitive edge. Ten years ago they only understood the bottom line. Now, perhaps as a result of litigation in the US at least, they are beginning to realise that people are a company’s means for success.”
Read a synopsis of presentations from the CISHRP conference in future editions of The Journal. It’s a topic no company in the Cayman Islands can afford to miss.