People Focus Spring 04 NA - CIPD

FeatureProfit Building Teams First,Downsize LastIrish HR Execs May Needto Take The LeadThe last 18 months have seen a profoundchange in the Irish economy. Where once itseemed unstoppable, the global downturnhas hit Irish businesses hard with manymultinationals, particularly in the ICT andmanufacturing sectors, sufferingdreadfully. Whilst the future will be nothinglike those dark days of the 1980s, theoutlook is sober.Recently the Organisation for Economic Co-Operation and Development (OECD)predicted that Irish unemployment rate wouldrise to 5% by the end of 2003. Elsewhere, theIDA has estimated that job losses in themultinational sector will be as high as15,000 by the end of this year. Althoughthere are 28,000 more people at work now inIreland than at the same time in 2002, jobinsecurities and worries about the future ofthe economy are rife.These worries have been fuelled by a number ofjob loss announcements. September alone sawthe closure of the computer hardwaremanufacturer 3Com in Dublin, and the electricsgroup Schneider in Celbridge, Co Kildare,resulting in combined job losses for 955 people.As Ireland’s reputation as an expensive locationto do business grows, multinationals increasinglyhave to find ways to lower their costs, with lay-offsseeming the most obvious solution.However, job cuts are a short-term solution.Sustaining economic recovery for the long termrequires a strategy that involves and considerspeople first and makes downsizing a last resort.Who better to lead this type of strategy thanHuman Resources professionals?HR is astutely aware of the downside todownsizing; that layoffs cause the quality of workto suffer, customer satisfaction decreases, jobperformance slumps, and morale dissipates. Yet,companies continue to layoff large numbers ofpeople at the first sign of a shortfall.Rather than leading a downsizing strategy, HRcan instead help organisations implement aprocess that turns to employees for feedback onprofit improvement and cost reduction. Profitbuilding in any organisation needs to be anongoing stand-alone process and HRprofessionals can effectively help companiespg36 Autumn 2004