CCID Consulting: Overcoming the Baffling Dilemma of Staff Cuts

2007-07-18 15:40 841

BEIJING, July 18 /Xinhua-PRNewswire/ -- CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (HKSE: HK08235), gives its thoughts on how to overcome the baffling dilemma of staff cuts.

In the past 6 months, staff cuts made by enterprises have detonated one by one like a time bomb throughout different fields and industries. CCID Consulting's data shows that from the large-scale staff cuts by Lenovo, at the beginning of the year, to the recent much-talked about staff cuts by LG, an accumulated total of almost 100,000 employees had been involved in staff cuts worldwide by June 2007. The downsizing moves, whether due to change of strategies or the need to reduce losses, have not only harmed employees' loyalty to their enterprises but also presented a huge challenge to enterprises' human resources management work; particularly for those enterprises which advocate "people-centered" thinking and "co-existence with enterprise" in their corporate culture and who pay attention to

long-term development. The psychological harm to employees and the damage to corporate cultures caused by staff cuts can hardly be remedied. All corporate cultures are built upon a basis of mutual trust. Staff cuts greatly damage this foundation. Then, what can enterprises count on to maintain their sustainable development? Even for the employees who remain, their enthusiasm for work is also greatly harmed. A sense of insecurity will follow. They will not only feel bewildered about their future at the company but also lack confidence in their corporate management. Just imagine, can high work efficiency be maintained in an enterprise at crisis? If enterprises cannot handle staff cuts properly, "endless hidden defects" will be caused.

There is no denial that enterprises have to make staff cuts at times and get strategic benefits from it. But, staff cuts can never become a sustainable strategic act. No corporate decision makers will see making staff cuts as a pleasant measure. To those employees who have made contributions to the development of their enterprise, economic compensations and expiration of contract are no sound excuses for laying them down. Enterprises cannot pursue sustainable development amidst the harm done to its work force.

The only way for enterprises to effectively solve the staff cut dilemma is to let their employees have the ability to flexibly adapt to changes in the organization and its internal and external environment. In this process, enterprises' human resources management department should not blindly stick to the old rules, passively wait for the eventual arrival of staff cuts and then announce decisions to employees according to the executive's intentions. Instead, it should actively make the following four changes:

Change the tactic role of human resources management to a strategic one

Research has found that despite the continuous enrichment and development of human resources management contents, human resources management in many enterprises still remains at the tactic level rather than the strategic level. More and more enterprises now realize that the object of human resources management is the most important resource in an organization. Through the managed persons, it interacts with other management functions. In the operation process, enterprises need to continuously improve their employees' various skills according to the business development needs so that the employees can grow along with their organization's ability while achieving the overall goals of the organization. Human resources managers should gradually get them freed from operational and administrative affairs, and change their former role of administration, services and obedience to one of caring about organizational development and managers' abilities. Such change will keep enterprises' employees always at a level needed by organizational development, thus avoiding enterprises taking the "heavy dose" of staff cuts to solve the problem of exiting talents.

Change from stressing availability to paying attention to growth potentials

As technology develops fast and the knowledge of employees expands, CCID Consulting thinks that to improve their ability, organizations must change the focus of their human resources management from an emphasis on availability to growth potentials and to establish a human resources management system which centers around nurturing enterprises' core competencies. CCID Consulting's surveys about the current status of human resources management in enterprises in China show that more and more enterprises have realized that learning organizations are a major way for human resources to make continuous improvement and continuously maintain an environmental adaptability. They have started to commit to building learning organizations and strengthen knowledge management. The effectiveness of learning and the ratio of contributions from knowledge have become important criteria for measuring the performance of human resources work in an organization. Focusing human resources management on caring about employee development is the only way to make employees better adapt to the enterprises' current and future development needs and allow enterprises to use stable "metabolism" to replace the huge challenge which business adjustment and transformation bring to their personnel.

Change from human resources management workers to strategic business partners

To improve the core ability of an organization, human resources management must become the center of corporate management work. This also puts forward higher ability requirements for human resources managers themselves. To truly play their role, human resources management personnel in modern enterprises must possess the following conditions. Firstly, they need to be familiar with enterprises' businesses. Secondly, they need to be able to grasp and apply modern human resources management means. Thirdly, they need to enjoy a good personal reputation among the enterprises. Finally, they should understand how to push forward and lead enterprise change and restructuring. In other words, a competent human resources management worker must be able to concurrently serve functional and strategic roles. They need to possess strategic thinking and comprehensive services abilities. Only when human resources management workers closely follow the fast development needs of their enterprise can they avoid the generation of large numbers of employees who do not meet the enterprises' business development needs.

Module-based human resources management building to systematic building

To improve their ability, organizations must integrate their various scattered abilities, including the ability to respond, produce, market, service and innovate. The integration of these abilities depends on the status and development of human resources. Optimizing and innovating human resources mechanisms and improving the ability of systematic integration of human resources management are the guarantee for enterprises to gain competitive advantages. Now, many enterprises are still in a stage of doing human resources management by different modules. They have yet to form a system of "personnel selection, personnel use, personnel nurturing and personnel retention". The result is that their human resources management work is not closely linked with their business development and strategic needs. This is also a key factor that causes a lot of staff cuts in enterprises. Without systematic human resources management work, it will be difficult to integrate the various abilities above into an overall ability of the organization. Improving the ability of organizations involves the whole problem of human resources management mechanism and system building. There is a need to change the past situation of taking stopgap measures. There is a need to optimize human resources management mechanisms and systems and establish a comprehensive human resources management system. This is the only way for enterprises to form a benign circulation system of "selection, nurturing, use, assessment, retention and exit."

The only way to cut the fuse to this time bomb and to prevent defects in the bud is for enterprises to actively change their human resources management functions, improve their ability in the operation process and to make sure their organizations have an ability that exceeds the requirements of environmental changes. Meanwhile, we should also realize that enterprises take pursuing maximum returns as their mission. To achieve sustainable development, enterprises must maintain a strong vitality. It is therefore necessary to maintain suitable personnel mobility. Only by keeping an exit mechanism in human resources management is it possible to guarantee the vitality of human resources in an enterprise. Human resources management with an exit mechanism is not a sound management system. But, such an exit mechanism cannot be fully covered by "staff cuts" alone. This is a need to dismiss, through a performance assessment system, those employees who refuse change and do not accord with enterprises' development strategies, culture and values. As for posts with personnel redundancy and insufficient work, there is a need to streamline personnel through post structure adjustments and competition for positions. Reasonable means should be adopted to dismiss those who are not competent for their post or are unwilling to be transferred to new posts. In a word, personnel which can be "streamlined" include employees at posts which are not the core competencies of an enterprise or posts for which service outsourcing may be selected.

It follows that if enterprises' human resources managers can stand at the strategic height of corporate development, fully tap the potentials of every one of its employees and work with a scientific and systematic management system, it will be very easy for enterprises to come out of the "entangling" dilemma of staff cuts.

About CCID Consulting

CCID Consulting Co., Ltd. (also known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is a direct affiliate of the China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen and Harbin, with over 300 professional consultants and industry experts. The Company's business scope has covered over 200 large- and medium-sized cities in China. Apart from home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.

Based on four major competitive areas of powerful data channels, industrial resources, intense knowledge and deep understanding of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategy planning, IT application, marketing strategy, human resources and information technology outsourcing. Our customers range from industrial users in IT, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks.

CCID Consulting is committed to becoming the No. 1 brand for strategy consulting, the No. 1 consultant for enterprise management and the No. 1 expert in market research. For more information, please visit our website at .

For more information, please contact:

Cynthia Liu

Coordinating Manager

CCID Consulting Co., Ltd.

Tel: +86-10-8855-9080


Source: CCID Consulting Co., Ltd.
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