Reduce costs – but keep your valuable & irreplaceable staff

A report from the Chartered Management Institute (CMI) found that over 225,000 managers quit their jobs in the year to the end of January, despite the possibility of unemployment and a difficult job market.

The report shows that that 4.7% of members covered by its annual survey resigned from their jobs, up from 4.5% last year.

Asked what motivated this desire to change jobs, 53.8% of employers questioned – more than half – admitted that restructuring and job insecurity were a key reason for staff leaving their positions.

Contributing factors suggested by employers in the survey were a failure on the part of firms to ‘offer career opportunities and training’, and the increasing influence of head-hunters and recruitment consultants.

The survey also implies that employers are failing to persuade staff to stay, with requests for ‘internal transfers’ – an alternative to resignation – dropping by 2.2% since last year.

Ruth Spellman, chief executive of the CMI, comments: “A year ago employers were looking at job transfers as a way of halting growth of the dole queue. However, with the latest figures showing that staff are prepared to run the risk of unemployment by jumping ship, questions must be asked about employee engagement levels in organisations up and down the country.

The CMI also said that its members were finding it hard to recruit staff, despite the latest figures showing that UK unemployment currently stands at 2.47 million.

Filling vacancies is a problem for 46% of firms, with 77% saying they cannot get people with the skills they want.

The cost of installing and owning solar panels will fall even faster than expected according to new research.

Tests show that 90% of existing solar panels last for 30 years, instead of the predicted 20 years.

According to the independent EU Energy Institute, this brings down the lifetime cost.

The institute says the panels are such a good long-term investment that banks should offer mortgages on them like they do on homes.

via BBC News – Solar panel costs ‘set to fall’.

The corporation wants to save £20m a year by axing 114 senior managers – but look at the details and this seems improbable.

The BBC’s target of £20m of annualised savings from the current senior management cost of £79m a year is designed to be achieved by the summer of 2013. What is puzzling is how this will be done. Perhaps someone at the BBC Trust has analysed all these figures. If so, perhaps they could explain to the rest of us how they all add up.

via BBC cuts: the sums don’t add up | Media | guardian.co.uk.

CDW’s third annual survey finds IT decision makers say managing costs takes priority ahead of improving customer satisfaction and increasing market share.

CDW found that cautious IT professionals are more optimistic about 2010, but the top focus of their organisations is not improving customer satisfaction – it is managing operational costs.

Priotities:

1. Managing Costs (50%)
2. Customer Satisfaction (42%)
3. Increasing Market Share (37%)

via CDW 2010 Tech Forecast: Cost Management Trumps Customer Satisfaction.

UK manufacturing activity grew more slowly than expected in November, purchasing managers’ data showed Tuesday.

“We’re not officially out of recession and I think the numbers will be greeted with some disappointment,” Neil MacKinnon from VTB Capital said.

UK Factory Output Below Forecast in Nov. – CNBC.com.

Pension deficits for FTSE-100 companies have doubled in 2009, according to advisory group Towers Perrin.

“Pension funds have benefited from rising asset markets but unfortunately their liabilities have grown faster,” Peter Routledge from Towers Perrin said Tuesday.

Swelling Deficits for FTSE-100 Pensions – CNBC.com.

Is the growing gap between the Financial Director and the Finance Department creating a gulf between strategic objectives and operational deliverables?

On the Director of Finance website there has recently been an interesting article about how Finance Directors are focussed on the strategic vision for an organisation, but often there is a gap between this vision, and the implementation that rely upon the Accountant or Finance Team and the IT function to deliver it.

No surprises then that it hints that communication, training, and other key ingredients to Project Management are key.

A new ACCA report confirms that Finance Professionals need to skill-up and focus on business strategy.

The report looks at how and where accountants are driving value in the current business climate, and includes an outline of how finance functions can optimise value.

The October 2009 research concludes that core skills and attributes around ethics, integrity, risk, value protection, and value creation will be key for accountants and finance professionals over the next few years. The report says adding greater value, with broader skills than ever before – across geographies, sectors, and organisational sizes would be needed.

The survey declared strategy as the domain in which current skills of finance professionals fell well short of requirements.

The ACCA report titled “Accountants for Business” was based on material provided by PwC, and is part of its Managing Human Capital in accounting and finance Insight series.

Working in partnership with IBM, Aviva split its IT environment into strategic and non-strategic systems. IBM was given responsibility for managing and rationalising non-strategic systems, enabling Aviva staff to focus on current business priorities. By providing a clear life-cycle for applications and systems the solution is driving significant cost savings.

IBM expect application run rate savings of over £8m pa. Almost immediate bottom line benefits. Model delivers ongoing cost management. IT better aligned to business. Up to 50% reduction in time to deliver IT solutions. Improved time to market for Aviva products and services. Improved staff motivation.

“IBM can manage our non-strategic applications more cheaply and effectively than we can ourselves. And driving applications towards timely decommissioning is encouraging a beneficial shift in our behavior.” – Seán Egan, Chief Information Officer, Aviva.

Key learning: Focus on your core strengths, and partner with others to add value to your enterprise

IBM – Partnership drives business focus while reducing application management costs at Aviva (23/11/2009).

In the company’s second quarter results for the three months ended 30 September, BT said it was making good progress with cost reduction efforts, having already saved more than £900 million of its £1 billion target for 2009/10. It now expects to save at least £1.5 billion by the end of March next year.

BT reported a 6 month profit of £547 million: Cost reduction of £900 million p.a. has clearly had a massive impact on the company’s profitability. Cost reduction can significantly boost profitability, especially in the current climate – no matter how strong the firm.

Article by By Jake Kanter – Supply Management.com.