Valpeo Blog

How to prepare for a round of redudancies?

War, energy costs, inflation: companies are facing many rising costs and uncertainty today. Cuts, layoffs and redundancies will unfortunately become a reality according to Stefan Peetroons in this third installment of Valpeo Partner Talks. At American companies like Meta and Amazon, it's already happening. So how do we handle it, and more importantly, how can we turn a crisis into an opportunity as well?

It may seem a bit strange: a lot of companies are bemoaning that fact that they cannot find suitable staff, and here we are talking about redundancies. Have you noticed in the market that something is afoot?
Stefan Peetroons: "That is what you are hearing, anyway. Both individuals and companies are confronted today with a cost reality. How are you going to keep paying for all of that? So, it could well be that companies will decide to let people go in order to finance the indexing of the other employees."

"Long-term thinking is essential. Who do you want to be as an organization, both today and in the future."

How should you prepare for such a round of redundancies?
"First, look at alternatives in order to do your utmost to avoid redundancies. Be creative, and think about temporary solutions that can contribute to long-term job security. And if that fails finally, you have to make choices.

"Long-term thinking is essential here. You have to look beyond just the period we are facing. That can easily be four, five years or longer. Then take in the strategic exercises that have already happened and see where you are going with your organization. Who do you want to be as an organization, for your customers, your employees, all stakeholders, both today and in the future?

"Then the issue is to look at how different that future will be. What scenarios should you take into account, what trends do you see, and what will that mean for the organizational structure? What is going to become more relevant, and what less so? What skills will you need more, and what less? Some skills will become obsolete."

Look at potential

What factors do you need to take into account in such an exercise?
"Making choices between who gets to stay and who has to leave can be heartbreaking. In the interests of the organization, you certainly need to show objectivity in doing so. Don't just look at today's performance level; look at potential. Can someone evolve into more complex roles? In addition, think about who are the carriers of your desired culture. All those factors can be mapped out, thanks to Valpeo, and in a fairly short period of time."

And what about those who don't have that potential?
"Then you have to ask the question: What horizontal growth can that person achieve? Then it makes sense to know what someone's learning ability, agility and flexibility is."

"To anticipate the future, it is important to keep a view of who will be our best experts and managers tomorrow."

Experts of tomorrow

How do I ensure that this process is objective?
"Gaining insight into the performance level and potential of your employees is essential to making an objective judgment. Sustainable organizational development first and foremost requires that you have a picture of the talent than you have in-house and how far this talent can grow over the next 5 to 10 years. This goes beyond succession planning for the next role.

"To anticipate the future, it is important to keep a view of who will be our best experts and managers tomorrow. Look at who can contribute to product and market development and business model transformation to meet increasing sustainability demands."

May I add a critical note to that? At a time when you need to cut costs, does a company still have the budget and time to put its workforce through an assessment?
"Compare it to planting a tree. If you want to enjoy a tree today, the best time to have planted it would have been 20 years ago. The second best time to plant that tree is now.

"Thanks to Valpeo, companies are constantly very conscious about the structure of the organization and the development of their people. Either they are already doing that today. And those who have yet to start doing it can, of course, say 'now is a difficult time and we need to look at our resources’. But when things get better again, they have to work, work, work and then it's not the right time either. So that tree never gets planted that way. You just have to get planting at some point."

Also looking for more insight into your employees' potential? Contact us today.