Attracting and retaining talent key to company growth after downturn

Nairobi may not have been as badly hit as London or New York by the financial whirlwind of the last year, but the fundamentals of doing business are the same the world over. We can benefit by taking the best of what other parts of the globe are doing. When it comes to people, how are financial services organisations positioning themselves?

Many of such organisations are now moving on from immediate survival and associated cost reduction. We have the advantage that our institutions have come through relatively unscathed: now is the time to use that advantage by adapting strategy to the fundamentally different business, capital and regulatory environment that is emerging globally from the turmoil.

Seizing the opportunity of the downturn: As always, people are critical to seizing this opportunity. This requires a radically changed mindset and approach to this vital asset, aligning planning and managing the workforce with strategic objectives; this helps to ensure that the business is equipped to meet evolving customer expectations and capitalise on the opportunities in the upturn ahead.

Smart financial services organisations recognise that now is the time to examine how the business model needs to adjust and are already looking at what capacity and capabilities will be needed to compete in what, for many firms, will be an unfamiliar business environment. Indeed, the current situation offers unprecedented opportunities to do this — as Rahm Emanuel, White House Chief of Staff, has said: “Don’t waste a good crisis.”

Leading companies, of course, are looking at how to reduce overheads and realise potential synergies through the greater use of centralised service centres and other sourcing options. We believe that further savings could be achieved through a more aggressive approach to product rationalisation, reducing needless management layers and identifying opportunities for integration and consolidation in areas such as reconciliation.

Reassuring the workforce through re-engagement: The corollary of redundancy and re-assignment, however necessary for the survival and long-term success of the business, is the creation of what, in many cases, is an anxious and disillusioned workforce. Experience invariably shows that productivity dips in the aftermath of such upheaval and uncertainty. Staff may be unclear about their roles, especially if they are being asked to take on responsibilities from laid-off former colleagues. People tend to act more defensively, for example by holding on to information, jealously guarding client contacts or telling superiors what they think they want to know.

Define the strategy for growth: Experience indicates that the first and most important step towards re-engagement by your people is defining a clear strategy for survival and growth and mapping out what talents and capabilities are required to deliver it. Where companies have been successful in re-connecting with staff and galvanising them for the journey ahead, one of the most important factors has been the willingness of senior management to come out onto the “shop floor” and explain the strategy for the business and how retained staff fit into the changes ahead.

Experience also suggests that executives should seek to clarify the behaviour, responsibility and accountability expected within what is likely to be a culturally and organisationally changed company. The ability to re-inspire the workforce is critical in sustaining productivity now and ensuring that the company is ready to respond swiftly and decisively when the eventual upturn arrives. Moreover, if morale is still low when business in the financial services sector picks up, good people will, as always, take this as their cue to jump ship.

Plan for the upturn now: The upturn could be as rapid as the slide into recession, so organisations do not want to be caught off guard. A number of companies are looking at how to use the analysis of when the upturn is coming and what will drive growth to help form the basis of a strategic workforce plan. This includes ensuring that any short-term staff reductions do not impede their capacity to meet long-term customer expectations and business objectives. They are also seeking to ensure they have the right people for a very different environment.

Cultures: As we all adjust to the more competitive financial services environment, smart firms recognise that they need people who can identify fresh sources of business and build these up over the long-term.

Having the right people for the new world order: As a number of financial services organisations move away from high risk-reward strategies towards a simpler and more sustainable “back to basics” approach, the people with the skills to make this work may not have been the leading performers of the past. Companies may therefore need to look deeper into the organisation to identify, nurture and reward the potential stars of tomorrow.

While recruitment freezes have been a common response to the financial crisis and related uncertainty, now may be the time to consider where and how to resume selective recruitment. New people also offer fresh ideas and motivation. Innovative financial engineering will continue to be at the heart of capital markets business and as business begins to pick up companies are looking at how to ensure they have the right people in the right place to realise emerging opportunities in areas such as debt restructuring.

Despite the setbacks of recent years, attracting and retaining the innovators and other high flyers that are in the competitive vanguard of any successful business will continue to be critical.

Those who want to maximise the opportunities for success must remember: the people asset, retaining it, attracting more and nurturing it is key to surviving and flourishing long term.

Mr Maughling is the leader of PricewaterhouseCoopers Advisory Consulting business in East Africa.guy.maughfling@ke.pwc.com