In early January 2009, KPMG announced a ground-breaking programme called Flexible Futures. It immediately became the number one topic of conversation across our UK business. In every office people were dissecting the details and working through the implications. We had created a major buzz. The launch also attracted significant outside interest. As well as major media outlets in the UK, we quickly received calls from as far afield as Toronto, Sydney and Hong Kong.
Flexible Futures
This article is about why we created Flexible Futures and how we did it.
Why Flexible Futures?
The global economic outlook for 2009 is bleak. Our business is robust and well positioned for the downturn, but these are unprecedented times and no-one can predict the future confidently. Events at the onset of the credit crunch showed how rapidly circumstances can change.
KPMG has invested heavily in recent years to create a highly talented and engaged workforce. The result – KPMG has been named the ‘Best Big Company to Work For’ in the prestigious Sunday Times 2009 Best Companies awards, for an unprecedented third time. It is the second successive year that we have won this award, with the firm coming in the top three every year since the Big Company category was created in 2005. We were tremendously proud when this year we also received a Lifetime Achievement Award, which was in recognition of having been in the top three of the Best Big Companies rankings over the past five years.
So having invested in creating a highly engaged workforce, we wanted to build on this engagement rather than put it at risk. We had also learned some painful lessons from the last downturn when we made redundancies and lost some real talent. When the upturn came, we were not positioned as well as we could be.
So this time we knew we had to do things differently. Our challenge was to create sufficient flexibility in our cost base to allow us to react fast to future events whilst retaining our people.
Our answer was Flexible Futures.
What is Flexible Futures?
Our launch was in essence an appeal to all 11,000 partners and staff in the UK. We asked them to volunteer to change their terms and conditions of employment for a temporary period of 18 months. The new terms allow the Firm during this period, as and when it requires, to ask volunteers to:
- reduce their working week by one day, unpaid, or
- take between 4 and 12 weeks leave at 30% pay
Staff could volunteer for either or both of these. The maximum salary loss in any calendar year is capped at 20%, and full benefits continue to be provided. Other safe guards such as notice periods are built in.
The most important feature of the scheme is that it transfers the decisions on whether and when to exercise either option to the Firm. It therefore gives our leadership certainty over their ability to flex our costs if required.
How successful were we?
Following the launch, our people had three weeks to decide whether to volunteer for the scheme. Our partners led from the front and we created a strong ongoing conversation across the firm. Just the fact that we were clearly trying to do something different created a great feeling of ‘all for one’. And the outcome? By the end of the period, 85% of our people had signed up for one or both of the options.
Conclusion
In many ways we have done the easy part. If we need to implement it, Flexible Futures will stand or fall on how fairly and sensitively we execute. But for now we have a significant contingency against any further deterioration in the market, one which should enable us to retain our most talented people and be ready for the upturn when eventually it comes.
We could never have achieved this without previously creating a high level of trust between leaders and staff. We’ve made it work by working together. I think it’s a great example of strategic HR leadership; working hand-in-hand with the business to create an innovative solution in harmony with our core values.
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