Kill fear. Build agency brands


Retrenchment is out. Innovative salary solutions and redeployment is in, as managers use inexpensive perks to motivate staff during the global financial meltdown. By Mandy de Waal From Mark Magazine Pages 8 & 9

“Am I going to be retrenched?” That’s the first question that runs through an employee’s mind in an economic down-turn.

Thanks to capitalism that gave us the sub-prime crisis and a full blown recession, the memory of Jack Welch, former CEO of General Electric, lingers: Neutron Jack decimated workforces, reduced pay rolls and cut 10% of management each year.

Loss of provision is a primal fear that strikes deep and is counter-productive to increasing revenues and innovation, the two things most needed when money is tight.

Good to see, then, that times are changing and the “Welch way” is out. New research from the Chartered Management Institute in the UK shows that lessons were learned from the 1991 recession and the trend now is to redeploy rather than retrench. Staff redeployment levels have doubled in the past year, as employers try to find an alternative to redundancy. Retaining competence is a far more cost-effective option than rebuilding a talented team from scratch.

In an effort to tackle retention difficulties and the drop in year-on-year earning power, companies are innovating and using inexpensive employee benefits to keep staff motivated. This includes increasing annual holiday entitlements, paying exam fees and covering book costs and looking at other incentives that can be offered to motivate staff without breaking the bank.

Gloria* is a 23-year-old brand executive who works for a Sandton-based marketing agency. She says that redeployment entrenches loyalty, because it shows good faith. “This would offer me more security and could mean new challenges for me to sink my teeth into. I would have more respect for the company I work for if they did this. This shows my needs are being considered instead of just the bottom line. If I commit myself and my career to a company, I feel it needs to be a two-way street.”

When asked whether she would consider a pay cut or perks instead of a bonus, Gloria said: “I am studying part-time so would welcome a perk like extended paid leave or flexi-hours, which wouldn’t cost the company anything.”

Agency owners are also hiring more carefully and looking at more innovative ways to beat the recession. “We have been employing very carefully on a permanent basis due to the fact that we are aware of the recession globally and want to avoid retrenchment,” says Nicole Capper, Joint-Owner, Mango-OMC in Cape Town. By keeping a small team of permanent staff and using a stable of self-employed, external consultants they can be flexible, well resourced and avoid layoffs. “We would definitely look at restructuring salary packages before we retrench, and laying people off would be the last possible decision for us,” says Capper.

Retrenchment is also not an option for Giles Shepherd, Managing Director of brandalive® who says: “We will always look at all other options first. Previously when we needed to dramatically cut costs we convened a meeting with staff to lay the cards on the table and get their input. People got into the same boat to row out the storm. It’s a much better approach to the brutality that is retrenchment and entrenches a positive sense of loyalty to the brand. Staff appreciate that the brand has real humanity to it and it is not just an inanimate object chopping off heads to make the numbers work.”

* Name changed

Mandy de Waal is an Associate Editor with Mark Magazine.


Published by Herman Manson is edited by Herman Manson. Follow us on Twitter -

Online CPD Courses Psychology Online CPD Courses Marketing analytics software Marketing analytics software for small business Business management software Business accounting software Gearbox repair company Makeup artist