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Our Services
Strategic Cost Management
Client Profile
European financial services company with more than 10,000 employees working in their Retail Banking Division. Declining interest margins and excessive employment costs based on long-term union agreements impairing future profitability. Rapid business and market changes due to deregulation and increased global competition. Quality employee population but with skills and competencies more appropriate to old business model.
Assignment
Design and implement new retail banking organisation structure, roles and specifications, plus early exit incentive programme.
Objectives
1. Reduce staff cost ratios by promoting voluntary severance and early retirement and freezing number of employees at current
levels, net of early exits
2. Re-design, document and profile roles to link with new business model
How We Helped
We worked on this assignment with the client’s Strategy Review and HR teams. The significant outputs included:
• Design of new role family framework to match the new business strategy and model
• Development and application of computer-based analysis of actual employee skills and competencies in relation to requirements
of new role specifications, utilising qualitative, quantitative and behavioural criteria
• Design of early exit incentive packages tailored to specified employee demographic groups
• Identification of specific skill and competency development needs based on computer analysis of role/person matches
• Creation of communications campaign for new organisation structure and early exit incentive programme
The Results
• 7% reduction in employee population through early exit scheme
• 24-month payback on exit costs
• 70% decrease in annual rate of employment cost increases, based on combination of business growth and frozen headcount,
over two years
• Labour cost ratio reduced from 68% to 54% over four years
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