Workforce Series – Tip #1: Reorganize vs. Restructure

Over the past 18 or so months, a constant drumbeat among professionals related to the state of the workforce has featured a consistent theme: Things are in flux! With so much uncertainty, it is difficult for leaders to navigate the murky waters of a weakening economy, a stubbornly tight labor market, persistent inflation, banking instability, war, and a new cultural dynamic created by globally dispersed workforces. More than ever, the job of managing modern workforces is exceptionally trying and turbulent. To get through, companies will need to reevaluate their talent strategies to meet the demands of a vocal and particular talent pool.

For guidance, I turned to career and human resources expert, Jesse Meschuk, Senior Advisor with Exequity, a full-service executive compensation consultancy. With Jesse’s keen insight, today’s article is the first in a five-part series through which you will learn five highly practical HR-related management tips.

To get us started, Jesse first recommends that companies reorganize vs. restructure, which allows for other solutions to then be deployed to address headcount cost structure.

First, some background:  As weakening demand began to emerge in 2022 and signs of a recession grew, many companies responded by cutting staff. Signs suggest this trend may continue. Layoffs that began in 2022, when it was estimated that tech companies alone laid off 150,000 people, have continued into 2023 and are spreading to a much broader set of industries. Disney began cutting 7,000 jobs, Dow 2,000 jobs, Goldman Sachs 6.5 percent of its workforce. Even Blackrock, the traditionally high-performing investment fund, is cutting 3 percent of its global workforce.

That being the case, while layoffs are sometimes necessary, according to Jesse, a host of other solutions may help you optimize your organization for the future. Consider these options:

1. Take advantage of existing and emerging lower cost hubs. Areas like India, Mexico, Spain, and Southeast Asia (Vietnam, Cambodia, etc.) are all investing significantly in building infrastructure to support global business. Many are offering attractive tax incentives to lure potential employers. A number of these areas possess talent hubs that have been building for a number of decades, where knowledge companies can find quality staff able to complete a number of roles that were previously not viewed as easy to do outside their traditional headquarters. The move to diversify global talent and supply chains outside of China are also accelerating these plans.  Determine what work can be placed into these hubs, redirect hiring efforts to focus there, and capture savings to either lower costs or redeploy to ensure you can be competitive in main talent markets. 
   
   
2. Re-embrace the flexibility of remote work, part-time workers, returning retirees, and contractors. Recent reports suggest many CEOs are trying to mandate people back into the office out of a concern for productivity and culture. While having some time face-to-face is important for core staff, reducing your overall office footprint can save significant costs. Those companies with flexible work are more likely to attract talent, keep talent and mitigate accelerating salary inflation. Additionally, embracing part-time workers, retirees or contractors can help address needs that may not require a 100 percent full-time head, but can be done quite effectively by these types of workers. These workers can often also help identify other areas of efficiency as they bring additional reference points from other companies, and can be a way to “test out” talent you may want to bring on full-time when needs grow or recover.
   
   
3. Regularly re-evaluate your hiring and workforce plan. Many companies determine their hiring plan at the beginning of the year and then execute for 12 months, only to re-evaluate when they plan for the next fiscal year. During a turbulent time like this, review headcount plans every quarter, and add additional processes to ensure each hire is in line with current needs. The last thing companies want to do is bring on talent only to discover they aren’t needed a few months later.

(Side note: There’s a cool new startup that is empowering people to work remotely called Worksploring.com. Check out their resources that help companies to understand employee needs and optimize remote work policies.)

By considering Jesse’s tips for reorganization vs. restructuring, you may be able to establish a more flexible, more modern approach to staffing that allows your company to thrive – despite the uncertainty of our times. 

Next week: Jesse’s tips to plan for the organization you will need in the future – not the one you have now. Until then… happy staffing and Happy Networking!

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