1Strategic HR challenges

Intelligent RightsizingShaping businesses into better competitors:

The strategic HR Management challenge

Imran Ahmad Head – HR

REDTAG Group

2Strategic HR challenges

Provide balanced practices for work force rightsizing which limits

Business risks and optimize strengths

Session Objective:

3Strategic HR Challenges

MR. BOSS

Be Agile and

Market responsive

Maximise ROI and

sustain profitability

Reduce

operational cost

4Strategic HR Challenges

Shar

ehol

der E

xpec

tatio

n Show me the Money !

P&L Elements MM

Currency %

Sales Turnover 100 100%

Cost of Sales 65 65%

Gross Profit 35 35%

People Cost 15 15%

Other Expenses 5 5%Net Profit 15 15%

5Strategic HR challenges

•Facing the Market Realities •What is Rightsizing •The available options•Balancing rightsizing•Right Leadership•Practices & Behaviour•Critical success Factors•Wrap Up

Let’s see how to help:

6Strategic HR Challenges

Survival Strategy : Competitive

repositioning

MR. BOSS

7Strategic HR challenges

Crea

ting

Busin

ess V

alue

Mr. Boss & the Market realities

Strategic People Capability

Efficient Organisation Structures

Focus on Core Competence

Operational Effectiveness

Organisational Culture

Survival Kit for

Business

8Strategic HR challenges

Ratio

nale

for r

ight

sizin

g

‘Too large shoes rub blisters , too small shoes cause corns ‘

-Unknown

Mr. Boss’s Strategy: Rightsizing

9Strategic HR challenges

Righ

tsiz

ing

optio

nsWhat is Rightsizing ?

Focus on Core Competence

Business Portfolio Analysis

Internal Structure revamp

Internal Process Re-Examination

Evaluation of operational Effectiveness

Headcount & Role Rationalisation

10Strategic HR challenges

Choo

sing

the

chan

ge The usual options

Internal Structure revamp

Headcount & Role Rationalisation

MR. BOSS

11Strategic HR challenges

Bala

ncin

g rig

htsiz

ing Don’t yank the wheels off !

Revenue Functions

Support Services

Structural Functions

Reduce Non Performers

Adopt considered Hiring

Re-Align workforce Competence

Reduce unnecessary hierarchy

Redesign compensation

Outsource / Reduce Non-core activities

Re-engineer inefficient processes

Freeze Hiring

Consolidate operations/ locations

Consider voluntary redundancy/ retirement

Leverage Technology

Implement multi-tasking & job sharing

Reduce dispensable . Retain valuable

Consolidate Services , Reduce Roles

Right-size the Expense structure

Competitive Capability

Organisational Agility

Structural Competence

12Strategic HR Challenges

Company Leadership( Led & facilitated by HR )

Identify Vision , Plan and expected Goals

Identify the suitable rightsizing choices

Determine scope of the implementation

Communicate to and Align people

Evaluate potential costs

Prepare communication plans

Prepare survivor plans

Man

agin

g Ch

ange

The Right Leadership

13Strategic HR Challenges

Provide reasonable severance package

Choose Right timing during the year

Treat people with dignity

Plan well & provide notification period

Complete detailed Documentation

Communicate facts honestly

Respectful Departure Pr

actic

es &

Beh

avio

urs

14Strategic HR Challenges

Monitor and track the deployment of

future plans

Create engagement Events and ensure a

culture of Zeal

Develop a culture of Accountability &

rewards

Make leaders visible and supportive

during rightsizing

Introduce efforts to enhance competence

& skills

Reemphasize the company vision &

goals

Ensure RetentionPr

actic

es &

Beh

avio

urs

Training

15Strategic HR challenges

Avoi

ding

pitf

alls

Critical Success Factors

Action Planning

Cost-benefit Analysis

Strong HR Leadership

Honest Communication

Proper investments

16Strategic HR Challenges

A live Example

17Strategic HR Challenges

KSA :2010-2011 Automotive industry

Righ

tsiz

ing

exam

ple

Background

Strategy Better balance sheet mngmt, Build capability , Create accountability , strengthen market leadership

Rightsizing driven by Sustained losses

Rightsizing Initiatives

Drive Sales VolumeKey drivers : new Skills , incentives

Focus on Credit & Collections

Renegotiated Loans & interest

Introduced Optmised Org. structure

Made Roles Redundant

New Talent New Comp & Ben structure

Trackers Unit Volume Inventory CSI

scores Service KPIs

Functional KPIs

Outcomes Higher unit Volume Profits Satisfied

customers

A new business unit

18Strategic HR Challenges

Limiting RisksOptimising Strengths

A Quick Summary

19Strategic HR challenges

Qui

ck S

umm

ary

Wrap Up

Emotional costs

Process disruption

Organisational Stress

Re-tooling Costs

Potential Risk

Process Efficiencies

Optimised Structures

Higher Cash flows

Capability bandwidth

Likely Strengths

There are several areas for rightsizing-choose most appropriate

Ensure proper due diligence for short-& long term associated costs .

Best practice behaviour will ensure talent retention and performance Culture

Strong Leadership is key to achieving desired rightsizing benefits

WinningStrategies

20Strategic HR Challenges