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KPMG redundancies: Looking under the bonnet at company culture
Redundancies are an unfortunate reality that businesses sometimes face when times get tough. However, the way a company handles these layoffs can speak volumes about its culture and values. In this article, we delve into KPMG’s recent announcement of job cuts and pay freezes, examining the firm’s accountability and the alignment of its actions with its stated values.
KPMG attributes its decision to a ‘softening’ market, conveniently sidestepping any acknowledgment of the reputational damage caused by their past auditing issues. This comes just a week after KPMG was fined £21 million for its outsourcing failures with Carillion. In an age of heightened skepticism, businesses must demonstrate awareness and responsibility for how their past actions may contribute to the need for cost-cutting measures.
KPMG claims to prioritize its people, with company values centered around integrity, excellence, courage, togetherness, and improvement. Yet, KPMG has faced its fair share of controversies, including the resignation of its UK Chair in 2021 after insensitive comments regarding the impact of Covid and unconscious bias. Corporate values must extend beyond mere rhetoric; they should challenge leaders to make tough decisions that they, not their employees, have to bear the consequences of.
A company that genuinely values its employees should exhaust all options before resorting to layoffs. This means exploring creative solutions to keep people in their roles, even when faced with difficult market conditions. In some cases, businesses have invested in new ventures to provide employment for those affected by closures, refusing to let anyone lose their job due to top-level decisions.
Today, many companies foster open, high-trust cultures where they openly discuss financial challenges and seek input from their employees. In such environments, leaders can solicit ideas from their workforce to avoid job cuts. Employee feedback can reveal opportunities for cost reduction, including voluntary pay cuts, executive salary reductions, and identifying areas where resources are squandered.
Redundancies can have long-lasting repercussions, eroding trust that takes years to rebuild. Surprisingly, layoffs often fail to improve a company’s profitability, leading to demotivated employees and a negative response from investors. Job and salary cuts may serve to maintain EBITDA, but they can damage a firm’s reputation and stock price.
While redundancies may not always be indicative of a deeper issue, they can signal a misalignment between stated corporate values and actual practices. Professionals responsible for upholding these values within organizations should remain vigilant to this possibility.
In conclusion, when a business announces job cuts and freezes salaries, it’s an opportune moment to scrutinize its corporate culture. Often, the roots of such decisions can be traced back years.
