The dilemma: I am the new HR director of the European division
of a US-owned specialist technology training consultancy. Globally, the
business has grown by 70 per cent per annum in the last three years, but growth
in the European division has been static. I have been recruited to help turn
the business around.
The parent company hopes to float the company on the Nasdaq next year, but
cannot do so until the European division, the second largest in the group, has
been restored to rapid, profitable growth. There are a number of barriers to
success. While the quality of our delivery is exceptional and customers always
recommend us, we have no organised sales processes or capability within the
business. There is no dedicated sales organisation, and sales efforts are typically
reactive, with operational project managers following up leads as and when they
As a result, the organisation struggles to drive sales growth in a
consistent pipeline, and finds it difficult to forecast accurately. Although we
offer interesting work and good opportunities for global travel, staff turnover
among fee-earning consultants is at about 40 per cent. They are being
consistently poached by bigger, generalist consultancies. These organisations
see technology training as a small but profitable sideline that can be bolted
on to their core business of enterprise-wide systems implementation. They are
perceived as higher status employers, offering opportunities for training
consultants to move into lucrative programming work.
Recruitment is an ongoing problem. It is fully devolved to line managers,
and recruitment costs are spiralling out of control as we try to backfill
resignations on time-critical projects. We are struggling to maintain promised
staffing levels on existing projects, and I am worried that as we move into a
growth situation we will not be able to staff new projects. What strategic
steps should I be considering?
Solution 1 by Neil Roden, HR director, Royal Bank of Scotland
The European operation has some key strategic HR issues to address to meet
its business goals. Particularly the effectiveness of the sales team, retention
of good staff, cost control and possibly morale.
Step 1 Board buy-in: Review the business case with the European board
to ensure a common understanding of and buy-in to the business goals,
priorities and issues for the European operation. Agree the need to quickly
develop a transformational people strategy that supports these business goals
by addressing key issues such as sales structure, resourcing, retention and
employee attraction costs.
Step 2 Address key strategic HR issues: Review the organisational
structure in the sales team – consider appointing a head of sales to drive the
team forward. There is a need to introduce better sales processes, embed a
sales culture and recruit a proactive, qualified team. This is crucial to
delivering rapid growth.
Step 3 The organisation is losing significant numbers of staff. Review
your internal resourcing and development strategy to address 40 per cent
turnover, retain good employees and ensure the appropriate staffing of roles.
Establish an attraction strategy that communicates your employee proposition
and is underpinned by revised recruitment processes. Consider training managers
in conducting structured interviews. Address
the spiralling recruitment costs through key supplier relationships and
negotiated rates. With 40 per cent
turnover and low profitability, there may be a morale dip that needs to be
understood and addressed.
Step 4 Agree an implementation plan: Once you have identified the key
issues and your proposed actions, you need to review them with the board and
agree on how you plan to implement them. It is essential your strategy
translates into business performance measures, such as increased income or
reduced cost, and not just intangibles.
Step 5 Communicate and mobilise: This is something you need to do
with the board’s agreement. To succeed, staff will need to be engaged in the
transformation of the business. They need to know what it is, have clear goals
to strive for, and understand what they need to do to deliver it. Maximise the
available communication channels and ensure there is opportunity for two-way
Solution 2 by Louise Allen, director, LA Partners
Step 1 Differentiate between short- and long-term priorities: Because
the performance of the European business is an essential part of a wider
strategy to float on Nasdaq, there will be tremendous pressure on the HR
director and European managing director to make changes very quickly.
Therefore, a short-term strategy will be essential. This must be balanced by
developing a longer-term strategic response in tandem.
Step 2 Short-term – refocus on sales: This should be your immediate
priority. The business has a reputation for good work, so this could become the
unique selling point for winning future business. Work with the sales director
and sales team to review where and how they have been successful in the past
(and where not). Harness this information to create a revitalised sales
process. Start with the core client base, targeting the sales force to take
advantage of repeat business, expanding from there.
Step 3 Short-term – performance management: Examine the performance
management system – how are targets set; are accountabilities clear; who are
the good performers; are they recognised and rewarded as such? Overhaul the
system to ensure clarity of business goals/sales targets and ensure regular
high quality reviews take place. Identify and single out the high achievers for
special recognition and reward. Celebrate success.
Step 4 Short-term – leadership issues: The shortage of good
consultants is seriously inhibiting business performance. Revisit why so many
are leaving. What key issues can be reversed quickly, for example, pay,
benefits, bonuses, and so on? Make a strategic decision to invest in those
practices that are essential to stem the losses. If there is a lack of morale
or motivation, consider the quality of management among the sales team. Is
there a leadership issue to be addressed?
Step 5 Longer term – develop strategies for recruiting and growing a
talent base: For example, can candidates be sourced and groomed once they
have graduated? Other issues appear to centre on the quality of leadership,
direction, focus and structure. It will take more time and effort to resolve
these issues. It is essential to ensure that these issues are are prioritised
in line with business growth targets, so that appropriate investment is made available.
It is a people business after all.