During an economic downturn, companies looking to stay afloat cut costs by downsizing. This is usually because the biggest cost on the expense account often times, is salary; hence it is usually the first expense to watch in a bid to return the company to profitability.
However, a human resources expert, Wikus van Vuuren, managing director, HR Advisory Services, African Management Services Company (AMSO), said companies run into murky waters when they downsize without a strategy to innovate and equip the staff with skills for the future.
“The moment you start to reduce your staff component and restructure your organisation, you do require people to become more innovative in the way they think about the business and in the way they think about their work and the contributions they are making to the organisation,” said Vuuren in a presentation at the May 2017 breakfast meeting of the Franco-Nigerian Chamber of Commerce and Industry, held in Lagos on May 30.
Vuuren said that downsizing though a practical necessity; companies need to complement it with innovation by thinking around what skills the company will need for the future and how to attract them.
“One of the traps companies fall into during recession is that they stop thinking about the future because they get so concerned about what is happening this year. What is our balance sheet going to look like this year? What is our profitability going to look like and we stop thinking about the fact that there is going to be a future.
“What policy and procedure do we need to make to streamline our business and make our business more user friendly, more customer centric to change the way we look at some opportunities in the market and those we can attract, that is what innovation demands,” said Vuuren.
Nigeria’s economy slipped into a recession last year and the resultant effect on companies have been traumatic. A poor exchange rate policy by the Central Bank of Nigeria which seeks to artificially prop up the weak naira scared off foreign capital, when investors cannot take away their capital. This squeezed markets and companies cut large swaths of the nation’s workforce.
Yet many of these companies have not returned to profitability, as low morale following job cuts and loss of top talent have been the consequent of many downsizing actions. The economy is only just seeing marginal growth.
A panel discussion that ensued, which included Eno Obong Edet, of AMSCO, Wikus van Vuuren, Kim Miller training and development manager at AMSCO, and Moses Umoru, general manager of CCI France, identified strategies human resources of various companies can use to achieve optimum performance from their people.
It was stated that optimising manpower strength by giving people access to skill and technology, will empower them to take good decisions. Companies were urged to take strategic initiative to increase productivity and efficiency after cancelling several benefit schemes.
“Training and development becomes even more critical then,” said Kim Miller.
Employers were urged to use slack time to engage employees on their profession, promote divisional and cross functional collaborations as well as redefine and expand their spheres of influence.
Laurent Polanceaux, consul general, French Consulate, in his welcome address called for strengthening Nigeria’s democratic culture in order to provide investors comfort and help the country out of recession.
On his part, Moses Umoru explained that the France Chamber of Commerce picked AMSCO as partner because it is a special purpose company established by the United Nations Development Programme (UNDP), the International Finance Corporation (IFC) and the African Development Bank (AfDB) to provide management training support to organisations to become globally competitive, profitable and sustainable.
ISAAC ANYAOGU
