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Blog: The Business of Management - Communication
 

April 30th, 2008

Merger Challenge: Getting the Workforce to Buy In

I don’t fly on Delta or Northwest much these days, so I don’t really have any personal insight into whether the proposed merger of the two airlines makes much business sense. One thing I do know, however, is that making one strong and profitable company out of two struggling ones is near impossible if you don’t get the workforce to buy in.

And, that’s where this one may have a struggle. A story in The Detroit News headlined “Wary workers cloud Delta-Northwest merger” talks about the challenge of merging the workforces of union-dominated Northwest (with about 22,500 union employees out of 32,000 total) with primarily nonunion Delta (where 6,300 pilots and a small number of dispatchers out of 47,000 employees are represented).

The struggle to merge these two old-school airlines into a unified and productive workforce isn’t just about collective bargaining and work rules, but more about the history and culture that is embedded deep in their corporate DNA.

“Delta’s an interesting company in that it’s been able to maintain a decidedly nonunion culture while staying on relatively good terms with its employees,” said Michael Boyd, president of the Boyd Group, an Evergreen, Colorado-based consulting firm. “Even through bankruptcy, management has succeeded in convincing employees that their best representative is themselves.”

But, The Detroit News points out, “selling that culture to Northwest’s entrenched unions won’t be easy. Even before merger talk began, the Association of Flight Attendants got enough signatures on a petition requesting a unionization vote of 12,000 Delta flight attendants. Neither Delta nor the union has speculated on the outcome of the current election.”

If they can make this merger work, the combined airline would be the largest in the world. “The new Delta,” says The Detroit News, “is expected to employ about 75,000 people after the two companies are fully integrated. [But] employees worry: Will management follow through on promises not to cut jobs or close hubs? If the companies are in such dire financial straits because of fuel prices, will they be looking to cut wages next?”

Those are all good questions, because those are all reasonable worries for workers to have. Delta has promised that no frontline workers will lose their jobs in the merger, but is that realistic given the huge and unrelenting rise in fuel prices?

I question that promise, and so does Joe Tiberi, spokesman for the union that represents 9,500 Northwest baggage handlers. “There’s no way they can combine without massive losses of jobs,” Tiberi told The Detroit News. “We’re also worried about merging our unionized workforce with Delta’s nonunionized workers. We have pensions, but they don’t. We have no guarantee Delta wouldn’t want to get rid of our union.”

It’s hard enough to make one good airline out of two struggling ones when everyone is on board. But it is damn near impossible if you have union squabbling and critical workforce issues to hurdle. The only saving grace here is that Delta’s management seems to be driving this deal, and frankly, Delta’s management seems a lot more sensitive to worker issues than Northwest’s does . That raises the odds of success, but not enough for me gamble my next trip on Delta. I’d be surprised if a lot of other frequent travelers don’t feel the same way.


April 8th, 2008

Better Late than Never: Why, Finally, I’m a Convert to RPO

If confession is good for the soul, as I was always told in Catholic school, then I have a big confession to make: I just don’t get recruitment process outsourcing.

We’ve written about RPO before, including this story, but I am one of those guys who wonder why, if people and talent are considered the lifeblood of any organization, a smart business would outsource the recruiting of that lifeblood to somebody else. It just never made much sense to me.

Well, I have finally had someone explain RPO in terms that even I could understand.

That someone is Paul Maxim, the global resourcing director at Unilever, the $90 billion global giant with more than 400 brands and 179,000 employees in more than 100 countries worldwide. Maxim put on a breakout session on “Recruiting & Retaining Talent Globally” in Orlando during Vurv Revolution 2008, the annual user group conference for Vurv, the Jacksonville, Florida-based technology company that specializes in talent management software.

Maxim made a compelling case for why outsourcing much of the recruitment process can really help. He talked about the benefits it creates for a company like Unilever that is hiring people in many different markets and particularly, in challenging talent environments like India and China.

Here’s what sold me: Maxim says that in the company’s revamped HR operating framework, despite outsourced recruiting, Unilever retains:

• Management of its “career brand,” resourcing strategy, and talent planning;
• The candidate assessment approach and the hiring decision; and,
• End-to-end responsibility for countries with low, permanent recruitment volume.

Accenture , Unilever’s RPO partner, handles the following:

• End-to-end resourcing services;
• Recruiting technology, deployment and management;
• Suppliers and vendors services management; and,
• All recruitment for jobs below “permanent” positions.

Accenture also centralizes the sourcing of candidates, schedules interviews, does pre-employment checks, facilitates pre-hiring paperwork and handles any other administrative processes. It also manages any other outside vendors to achieve both the best value and agreed-upon service levels while reducing the administrative burden.

The benefits to Unilever, according to Maxim, are a cost-effective, globally consistent service; detailed global reporting; and access to technology—in this case, the Vurv 7.1 recruitment system. In addition, Unilever employees get access to all internal job opportunities, a streamlined online application process and, for hiring managers and HR, regular communications to internal applicants on the hiring process.

More important, it allows Unilever’s HR business partners to be “free to provide strategic services to their management team” at the country level.
If that is what is truly gained with RPO–a greater focus on high-level strategy and the most critical components of the recruiting and hiring process—then I think I finally get RPO.


April 4th, 2008

Wanted: the ‘Best Corporate BS of the Year’

What would you think was going on if you heard that a company was launching a “productivity transformation program”?

This term was a new one for me, and that’s surprising since I’ve heard a lot of business speak, corporate jargon and PR-created management double talk. I bumped into the term today in The Philadelphia Inquirer’s PhillyInc blog , and guess what? A “Productivity Transformation Program” is just a euphemism—PR double talk—for layoffs and staff restructuring.

The PhillyInc blog points you to a press release from Schering-Plough Corp. that says nary a word about the 5,500 layoffs that are at the heart of the company’s “Productivity Transformation Program.” But as the blog points out, it “includes eliminating management layers, consolidating middle management, cutting travel costs, shelving some research projects, and reducing the number of factories. That’s more than just layoffs, I know. But when the goal is to produce $1.5 billion in annual savings, heads will roll. In this case, up to 10 percent of the company’s 55,000 employees.”

Why do companies feel that they have to resort to silly, incomprehensible corporate speak in an attempt to deflect attention from what they are really doing, such as seriously reducing the workforce? Do they think that anyone is so stupid as to not see what they are doing?

I don’t know about you, but I would love to hear from readers who have examples of equally amazing corporate BS. Just send it to me at jhollon@workforce.com, or add a comment to this blog. I’ll share the most over-the-top corporate double speak and euphemisms, and let all of you vote on which one you like most—the “Best Corporate BS of the Year.”



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