Earlier this week, the governor of the Bank of England, Andrew Bailey, warned that job losses were inevitable in the U.K. after the government increased taxes on businesses in its last budget. He suggested that the reduction in employment could be even greater than the 50,000 job losses forecast by the government’s spending watchdog, the Office for Budget Responsibility.
While most of these job losses are likely to occur in the retail and hospitality sectors, other sectors will not necessarily be immune. In fact, the UK is already experiencing a slowdown in hiring – a situation that will probably be exacerbated by the impact of the budget. So, how can leaders respond to the challenge of delivering against their objectives with smaller teams?
1. Address the imbalance between work volume, expectations and available resources
“The biggest challenge for leaders operating with reduced team staffing is usually that the existing workload exceeds the team’s reduced capacity,” says Michael D. Watkins, a leadership expert, co-founder of Genesis Advisers, and author of books including The Six Disciplines of Strategic Thinking and The First 90 Days. “This mismatch between work volume and available resources can lead to stress, burnout and decreased productivity if not managed effectively.”
Watkins advises leaders to ruthlessly prioritize by identifying and focusing on the most critical tasks and trying to delay, scale back or eliminate less essential activities. “Regularly reassess priorities as circumstances change and communicate them clearly to the team and stakeholders,” he says. “Streamline your key workflows, if possible, to reduce inefficiency and increase productivity. Encourage your team to find ways to eliminate non-value-added tasks and find innovative ways to do more with less.”
It is also important to communicate transparently with your team about the situation and explain the reasons behind job cuts or hiring freezes and their implications for priorities and expectations within the organization. “Check in regularly with your team to address concerns, provide updates, and gather feedback,” he suggests. “Recognize and appreciate your team’s efforts and the impact of the additional workload. Express gratitude for their flexibility and commitment and celebrate small wins and milestones.”
2. Make retained staff feel part of the reinvention
To survive and thrive going forward, businesses may recognize that they need to reduce the size of their workforce. “If the future of the business or its performance is at stake, then the upside of making redundancies is securing the future of the company,” says Graham Ruddick, author of Risk Roulette.
Investment in emerging technologies, such as artificial intelligence (AI), can also underpin organizational efficiency, effectiveness and longevity. Nevertheless, businesses won’t succeed at reinventing themselves using technology if they don’t equip their people with the skills to use new tools.
“What is important is that retained staff feel engaged in reinventing the company for the algorithmic world, so you must show that your goal is to invest in them,” argues Chetan Dube, an agentic AI pioneer and founder and CEO of Quant, which develops cutting-edge digital employee technology.
Dube believes that employees will need to be reskilled to move beyond routine tasks, which are going to get automated, toward creative thinking and solution engineering, which cannot yet be undertaken by AI. “By establishing effective training sandboxes that enable employees to get proficient at contributing to the digital enterprise, you can make them feel part of the change,” he says, “which will help keep them motivated, productive and bought into the company’s mission.”
3. Create an agile culture
“Leaders facing the challenges of streamlined teams can learn a lot from the fintech industry,” says James da Costa, a fintech expert and author of Fintech Wars. “As well being able to build scalable technology from the ground up, many fintech companies have been able to thrive with small teams because of the culture the leaders have created.”
Da Costa cites the example of PayPal, which grew by hiring exceptional talent and giving each employee freedom and ownership to move very fast. Brazilian fintech Nubank was started in a small house in Rio de Janeiro, where several employees lived upstairs, allowing for a very fast feedback cycle between the team. “Whether you’re building a start-up or scaling back, streamlined teams can only thrive in an environment where they are empowered to work quickly and efficiently,” Da Costa says.
Another way to create an agile culture is by harnessing the power of hybrid work models and encouraging employee development and growth, suggests Terence Mauri, founder of management think tank Hack Future Lab and author of The Upside of Disruption. It’s also critical to keep experimenting and evolving in line with the demands and expectations of our rapidly changing world. “We always overestimate the risk of trying something new and underestimate the risk of standing still,” Mauri concludes.
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