Managing headcount when the Iceberg is melting

“We believe strongly that the world needs much more action from a broader range of people—action that is informed, committed, and inspired—to help us all in an era of increasing change.” John Kotter and Holger Rathgeber had shared this in the book ‘Our iceberg is melting’.

Change impacts responses in every individual. In an organization, it creates in a multi-level impact. Managing headcount is mainstay to HR Strategy. It is annually planned along with the business workflow. Yet there are unexpected situations where an organization may need to re-strategise workforce to meet the sudden change. These situations can come up due to alteration in business scenario. There are revamping and retrenchment planned to manage the variation in the volume of work.

The increasing work volume in an organization may require it to double its headcount. This percolates to increase in recruitment. But if due to an economic depression or sudden loss of business the new positions created, may no longer exist. This puts the organization in a tricky situation where, they may not be able to hire the talents, to whom the offer letter have been issued. If the offers are reverted, it would impact the future hiring programs of the organization. It would send very hostile sentiments to the talent base. Simultaneously, if they are inducted it would add on to the headcount which may damage the situation more. As the work volume gets reduced justifying the existing headcount may stand a challenge on the top managing additional employees would completely shove off the balance. The point to ponder is what needs to be done at this stage. Either consider withdrawing offer from the new employees or put poor performer in Performance Improvement Plan.

The challenges stand equidistant from both the options. If offers are withdrawn, it would affect future hires. If existing employees are put on PIP, it would create a fear factor in everyone, hence might drive the top performers away. It would affect the trust consequently create disgruntled and stressed employees within the organization.  Even though this would be incremental individually, it would affect the productivity collectively.

The solutions discussed here would depend on the state of the organization. Incase it is flexible enough to commiserate, it might differ in implementation. Whereas if there is no scope for any consideration due to a business halt or other dire situation within the organization, it would require adopting a completely different approach:

Re-deployment: New position can be created from clubbing few tasks which may have been shared by many resources and is weighing on them. Its important to track such tasks out and create measures to accommodate these talents. But the challenge will remain if the system has become static, it may not allow any additional headcount. It would then require a different approach.

Planned out-placement: The retrenchment will send a strong message across the existing employee strength. Hence it needs to be handled with complete confidence and trust. The employees indentified needs to be out-placed within the three months duration by the organization. This will build confidence among the existing employees and the ones who stay back in the organization.

Strategise talent management for the long-term: Few proactive measures including demand forecasting with not just the hiring target but optimum utilization of the existing talentbase. This would entail accurate inventory analysis and auditing the HR processes and detecting probable attrition. Finally reconcile the skill-gap through three leaf employee management structure, including permanent, temporary and part-time employees.

Every initiative would require thorough communication and transparency to preserve employee morale. The employees need to know the organization’s reason. Fears of the employees need to be addressed with accurate information along with the reconciliation strategies. The retention does not depend primarily on the compensation. Trust contributes to the major share on employee engagement.  As guided by John Kotter, an inclusive culture encourages a “Win-Win” outcome based on mutual respect, even for “dissidents”. It follows that all types of resistance to change must be treated as feedback and discussed accordingly. This objective approach helps eliminate angst and animosity whilst promoting honest dialogue and active participation.

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  • Sitthinath Sanpanich

    1.Effective Manpower planning should be classified to White Collar Workers and Blue Collar Workers or definition of employees.
    2.Real Top Performer of ” a learning organization” will not afraid of PIP which different from Personnel Department Training. Top Performer is afraid of learning without thinking of his/her innovative and contribution in the organization.
    3.Outsourcing might be the four leaf of employee(blue collar) especially in the operation as well.

  • prashant dhargawe

    At the given drastic situation, the organisation should prefere to respect the LOYALITY and trustworthiness of its own workforce, instead of going for sourcing the foreign working culture adding to its detoriating financial condition. This shall help the organisation to maintain quality workforce, with increased enthusiasm, enabling increased productivity and simultaneously improved finance of the organisation and the esteemed workforce, too.

  • Thankyou Prashant and Sittinath,

    Agreed on the loyalty. In a situation where such a tough call needs to be taken, it needs to deal with utmost humanity and responsibility. No matter whoever leaves the organization, there should be enough effort made by the org to ensure minimum loss to that employee. Anything that’s done to them , will affect the morale of the ones who stays back. No initiatives will work in future, if the employees are now dealt with hostility.
    Best performers may not worry about a PIP. At the same time, using PIP to manage headcount is incorrect. Employees would easily figure out that. The focus on performance will shift to understanding the business environment and moderating oneself with that. The moment they will see no new business coming in, they would start moving out even without any PIP. It would defeat the process as a whole. PIP needs to be development focus and not a machinery used for elimination.


  • Data entry india

    Thanks for this blog, I liked it.