Cost cutting masks BT’s covert mission

first_img Previous Article Next Article Comments are closed. Cost cutting masks BT’s covert missionOn 21 May 2002 in Personnel Today Related posts:No related photos. BT’s HR team responded to the turbulent times leading up to 2002 bysimultaneously introducing a range of strong HR initiatives and cutting costsand staff numbers. Margaret Savage, director of HR policy, strategy and organisationaldevelopment, told delegates that while BT launched its ‘Cost Busters’initiative to record, clarify and drive down basic staff costs, it also mademoves to revolutionise the way its HR department functioned. BT has now introduced a system of “triple bottom line accounting”which takes into account brand and value growth as well as financial growth.Value growth includes measures such as people capabilities, and brand includesthe company’s achievements in corporate social responsibility and work-lifebalance. The BT HR community is now “reinventing itself” in line with thenew company strategy, putting in place a balanced scorecard and promoting thefunction as “people gurus” and “motivational magicians”,Savage told delegates. HR policies have been reduced from 273 to 97. Savage likened her approach to a “stealth bomber”, underpinningcost savings while quietly introducing progressive initiatives. Guided byProfessor Andrew Mayo’s book, The Value of the Enterprise, HR worked onbuilding data, establishing benchmarks and identifying measures for individualbusiness groups. As a result, the company expects the total labour cost to be reduced bynearly £3bn. Savage said the company’s £30bn debt meant managers felt BT was fighting tosurvive in the telecommunications sector and this forced HR to appear focusedon cost reduction. While the company was equipped to value BT’s human capital, the timing wasnot right to switch the focus to measuring intangible assets. “If we were to use the language of adding value through people it wouldhave scared the patients, they just wouldn’t have played,” said Savage. Savings have been achieved through outsourcing, redundancies and traditionalefficiency measures such as managing absenteeism and productivity. By Noel O’Reilly last_img read more

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