The precarious nature of the current economic climate means more and more organisations are going through a period of unprecedented change. The Northern Rock crisis, significant fall in house prices (expected to drop by up to 10% this year), and reports of up to 20,000 job losses in the City all indicate a bleak outlook for the employment market.
Restructuring and redundancy programmes are set to become increasingly common as the credit crunch takes hold. But what does this mean for organisations’ HR requirements, and what does the future hold for change management specialists?
Rick Freeman, vice-president and head of employee transformation at Capgemini Consulting UK, says change management specialists are really in demand at this time.
“Lots of organisations are on the lookout for ‘dirty-fingernailed’ change managers, who can drive cost reduction programmes and remove headcounts,” he says.
“Companies aren’t looking for people to provide something light and fluffy. They’re looking for people who can make a tangible difference and cut costs.”
Change managers who specialise in TUPE are set to become hot property, Freeman says.
HR professionals with outplacement skills and experience in downsizing will also have a very important role to play at this time, he adds.
With trends such as these buoying-up demand, the struggling economy is not having a major impact on the HR employment market, according to Matt Brooks, group manager at Frazer Jones, an HR recruitment company.
“We’ve been monitoring HR recruitment activity pretty closely and it’s no lower than it was 12 months ago across all sectors, including financial services,” he says.
“We’re expecting more HR interims will be required to deliver results, but so far it’s not been as dramatic as we expected.”
Brooks says the term ‘change management’ can be something of a misnomer and that there is some confusion as to what it actually means.
“HR practitioners with experience in change management are undoubtedly in demand, but often organisations are looking for an HR generalist with change management skills,” he says.
And knowing how to handle internal communications is the most vital skill a change management specialist can have, Brooks says.
“When employees are reading negative reports in the press about profits dropping, it’s really important to have someone taking a strategic lead and giving the right message to staff,” he explains.
It is part of a change manager’s job to reassure staff during times of uncertainty and keep them abreast of developments, Brooks says.
Anthony Pierce, associate director at recruitment firm Hudson, says change managers also need a number of other skills to be effective.
“They need to be resilient, have a good grasp of current employment law, have a suitably commercial outlook with a sound understanding of profit and loss, and a good strategic understanding of the business,” he says.
Richard Brown, managing partner at Cognosis Consulting, believes it’s essential to involve and consult managers during a change management programme.
“If you involve middle managers in the change strategy, you get a much higher level of buy-in from the company as a whole. But you’ve got to engage with them emotionally and listen to what they have to say.”
Brown says that, surprisingly, HR professionals can often overlook the human element during a change management programme.
“You’d expect HR to realise that people are at the heart of change and the importance of collaboration, but more often than not, they don’t.”
He says it’s important to include an element of creativity and teambuilding in any change programme, rather than just focus on the analytical, process-driven side.
“Companies need to take a more whole-minded approach based on collaboration and alignment. Why tackle change with half a brain when you can put your whole mind to it?” he asks.
So although we might all be starting to feel the bite of the credit crunch, change management specialists could reap the benefits. The watchword is communication.
Case study: ITN
When one of the world’s leading news and multimedia companies, ITN, decided it wanted to align the business and focus more on content management across different media platforms, it realised it had quite a challenge on its hands.
ITN, or Independent Television News to give it its full name, consists of five different businesses, including ITV news, Channel 4 News, London Tonight, More4 News and ITN Archive Ltd. In January 2007, the company embarked on a massive change programme to alter the perception of the brand.
Hazel Mitchell, HR director at ITN, explains: “The organisation was established 55 years ago, and obviously the media market has changed considerably during that time. But there was still a perception that ITN was just about TV news production.”
While ITN wanted to maintain its brand as a major news network, it also wanted to embrace multimedia channels, such as Web 2.0 and mobile phones.
Under the previous organisational structure there was little interaction between the different businesses and not much in the way of common objectives.
Sean McKnight, of creative consultancy Dave, helped manage the programme. He says: “We spoke to people across the business and realised the views of what the brand stood for were completely polarised. We asked them: what do the businesses have in common? What are the benefits of belonging to the same, larger organisation?”
Mitchell and McKnight began the change programme by organising a two-day workshop for senior managers to help relay a very clear new message.
“We told them we were not a news business, we were a content business. And we gave them some tangible examples of how being a content business and working together benefited them.”
One such example was that of a Basra cameraman shooting footage of the Iraq war from a foxhole. The footage of the war could be packaged across the network through all the different multimedia channels if everyone worked together.
“We wanted to get them to become more conscious of what they could do with different types of information,” McKnight says.
ITN also held a number of open days for people across the business to see how the different departments worked, and provided an extensive training programme for all aspects of news production, from editorial to technical.
Mitchell and McKnight then held a much larger workshop for 600 employees, who were encouraged to come up with different ideas for the business. One of the slogans the workshop generated to sum up the nature of the business was: ‘From Britney to Basra’.
But perhaps the bravest step was to launch a live Q&A event for ITN journalists and senior managers. One senior manager made the mistake of trying to brief Channel 4 News presenter Jon Snow on what he should and shouldn’t ask him, and was swiftly put in his place. Managers were grilled in front of their teams about the change management programme.
McKnight explains: “We wanted to get everyone involved with the change process and make them feel their opinion counted. The company has all these great journalists so we thought we’d make the most of them.”
The change management programme has generated a number of new contracts, including the purchase of Setanta Sports News and a new online news service with the Daily Telegraph.
McKnight says: “The most visible sign of our success is that ITN was a business that was about to fragment, but it’s now fully integrated.”
And what does Mitchell believe to be the main factor in its success?
“If we hadn’t included everyone across the business and got them involved, it wouldn’t have worked. We had to convince them it was worth doing and get their buy-in. It’s an ongoing project but the main bit of donkey work is done.”
What the recruiters say
Nigel Hawkins, director,Ashley Kate Associates Group
“Let’s not kid ourselves, economic decline is here and we have to deal with some tough decisions before the effects of this downturn affect our businesses irreparably. Interim professionals who have enjoyed challenging but positive change agendas over recent years may well be able to ‘make hay’ while the sun doesn’t shine on their paying clients over the coming year.”
Gail Bell, managing director,Chamberlain Beaumont London and Interim Alliance
“There has been an increase in the need for HR practitioners with change management skills for some time, and this is set to continue as the one constant is change. Change management has probably never been as important or as complex as it is today.”
Peter Burgess, managing director, Retail HR
“There is no doubt some pain to come. However, we must remember that recessions and downturns do at least have some positives. They are like pit stops for the economy. A downturn forces companies to reconsider their structures to make them more efficient. An effective change management practitioner can make a huge impact on the company’s survival chances through turbulent times. However, some companies see the appointment of such people as a luxury they cannot afford. This, I fear, could cancel an increase in demand.”
Martyn Wright, director, Oakleaf Partnership
“It’s hard to tell how badly the future of change management specialists will be affected. It depends on the longevity and severity of the credit crunch.”
Nigel Murray, joint managing director, Consult HR
“Having been through four recessions before, I’m much more optimistic about HR now and the need for good HR people during a struggling economy. The profession has become much more robust, and companies recognise its importance as a function. I’m cautiously optimistic.”
Sarah Chatterley, associate director,Search Consultancy Limited
“HR works collaboratively with senior management to develop commercially aligned people plans, which truly affect the delivery of results in a demanding economic climate. The current economy can only drive this demand.”