Just when we thought the true role of people management was making a long
overdue comeback, look at the privatised utilities. The recent spate of
competitive sackings does not suggest cool strategic planning of the people
Someone somewhere has had lunch in the City and the word is this sector had
better beware. Utilities’ share prices are under threat, so we must do
something. The regulator has decided prices in these near-monopolies are too
high, so the utilities must cut costs to meet the new lower prices. The City is
not happy about levels of "shareholder reward", and multinational
predators are presumed to be in lying in wait. And, of course, the only known
source of cost is people’s jobs. So 1,000 must go here, and we can let 1,500 go
Several thoughts strike the modern trade union official about all this. If
it’s so easy to let these people go, why were they not thrown out long ago?
What sort of managers were they that let their company carry such extra burdens
of cost in the first place?
Why is the quality of service in the company not going to be undermined when
these people go? If we have electric power lines down, if sewage repairs in
cities are an obvious cause for concern, will enough skilled people be on call?
Can we rely on the safety issues in all these utilities getting the complete
attention of management?
Or are these announcements nothing more than showing off to impress the
luncheon companions of the chief executive in the City? When push comes to
shove, will it all be sorted out through an early retirement here and a
generous "hamper" for managerial grades there?
Several other more substantial thoughts spring to mind. First, despite all
the consultation and "people are our greatest asset" bombast, the
announcements come as a shock to most of those affected. Companies still do not
spend enough time explaining what the global economy might do to us at a whim.
Few people who produce the goods or services under review have the faintest
idea what criteria banks and City institutions apply. Only the Bank of England
has tried to educate trade union officials as to the financial criteria that
affect company set-up or survival decision-making in the financial world.
There is clearly so far to go in being confident that everyone understands
these key influences in company fortunes. It’s the same old story. Only when
employees know the truth before the storm breaks will they trust the managers
who bring them the news.
Without trust, employees will fall back on attempts to protect their security
with informal restrictive practices. And that’s the biggest threat to
shareholder value, employment security, high share prices and everything else
that makes it fun to go to work.
By John Lloyd, National Officer, Amalgamated Engineering and Electrical