I knew of a company once where some of the head honchos became a bit bored doing the jobs they were handsomely paid to do. Is this all there is to life, they wondered? Am I still going to be doing this when I retire? So they came up with a terrific plan, which involved inventing a vague job title that hadn’t previously existed and persuading a rather gullible board that it would be a great idea if they were elevated to these positions because obviously the new position would be senior to the position they would be vacating.

Not only would this create a vacancy below them and an opportunity for the company to promote a PDP (previously disadvantaged person) but it would also demonstrate that the company was evolving and prepared to reinvent itself to tackle the challenges of a new millennium (or some such corporate gobbledygook).

Needless to say, the board fell for it hook, line and sinker. That may have been because most of the board members weren’t that interested in the business of the company because they were too busy calculating what their share options would be worth if the company share price rose. And it came to pass that the new positions were approved, with a commensurate rise in salary and a handful of very chuffed employees.

The only problem was that because the position had never existed before nobody had any idea what the job involved so, instead, the company took a wait-and-see attitude and encouraged the new incumbents to grow into the job. Since those who originally had the idea of creating the new job title also hadn’t a clue what they’d be doing, they started to poach bits of existing jobs from other employees to keep themselves busy during the day. A bit of marketing here, some budgetary decisions there and plenty of expense account lunches to make sure that their ‘strategic vision’ was on track. Not surprisingly, the company’s running costs rose and before long a cost cutting plan had to be put in place.

This task fell to the very people who had engineered their own promotion to a previously non-existent job and it finally gave them something to do. So they set about drawing up a list of employees they felt the company could do without, mainly based on their cost to company. In other words, if you were fairly junior and on a low salary with none of the expensive medical aid or pension perks of the more long-established staff members then your job was safe. The retrenchment plans were drawn up and, in addition, more senior staff were encouraged to apply for a generous early retirement package to help reduce the burgeoning overheads of the company.

Those on the retrenchment list were given the bad news and the offer of one week’s pay for every year they had worked for the company. Not having a union to fight for their rights they had no option but to leave and seek work elsewhere. As you may imagine, this didn’t do much for staff morale. Those who took the far more generous early retirement package which included a company undertaking to contribute to medical aid costs left with a broad grin and soon found jobs elsewhere. In fact, some of them had been job hunting anyway so the early retirement offer was a bit like winning the lottery.

Several things happened. The guys with the non-existent job title who had handled what was euphemistically called the ‘staff rationalisation’ project were rewarded for their cost-cutting efforts with a handsome cash bonus. Those who had taken early retirement had removed their institutional memory from the company forever, leaving less-experienced colleagues to wonder how things should be done. Those who had been retrenched for no reason other than the need to cut costs felt bitter and badmouthed their former employer for what they considered their shabby treatment.

But something else happened. The company suddenly discovered it no longer had the necessary skills to operate efficiently, so it started to rehire people at a far higher cost than for those it had just got rid of. And who did the job of rehiring go to? You guessed it … the guys with the non-existent job title. Is it any wonder some people find capitalism abhorrent?

Although the final details seem to be a little vague and the union’s reactions rather confusing at the moment, it does seem as though Eskom wants to try and reduce staff numbers with what has been called ‘voluntary exit’. With commendable paranoia, the National Union of Mineworkers has warned that this could be a precursor to mass retrenchments at the power utility. Eskom says the offer is only open to ‘non-essential employees’ which rather begs the question, what the hell are they doing there anyway?

As my example above shows, offering early retirement or exit packages runs the risk of losing the very people you might wish to keep. People who are not confident of finding another job are hardly likely to apply, so you lose the best and end up with the dross.

Eskom’s staffing problem is well known and it is a very simple one. There are far too many ‘cadre’ employees who are not essential to the running of the operation. The obvious solution is to get employee numbers down to a manageable level as any other company would be forced to do if it hoped to survive. But Eskom is a political football and if it isn’t financially viable (which it isn’t) then all the government has to do is bung a few billion its way every once in a while to prop it up. Quite where that money will come from is anybody’s guess but I wouldn’t want to be a state pensioner ten years down the line. Like Old Mother Hubbard, you may well find the cupboard is bare. It would be much better to bite the bullet and get the employee numbers down straight away, but we all know that’s not going to happen.

The views of the writer are not necessarily the views of the Daily Friend or the IRR

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  1. “offering early retirement or exit packages runs the risk of losing the very people you might wish to keep”

    This is usually the result of such efforts David. I took the offer at my last employer, and have not looked back.


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