by Rainer Strack, Jean-Michel Caye, Carsten von der Linden, Pieter Haen, and Filippo Abramo
Landesbank Baden-Württemberg (LBBW) is among the leading federal-state banks in Germany, with almost 12,000 employees. The bank was considerably affected by the global financial crisis that began in 2008. As part of a broader EU restructuring program, LBBW had to be subsidized with about €5 billion in public funding. One precondition for receiving the funding was that LBBW reduce its baseline workforce of full-time employees by 2,500 in a four-year period.
The bank began by creating an HR implementation plan to reduce positions across all functions. The massive downsizing required fundamental changes to the underlying business model. To achieve this, the bank analyzed all business segments of the current business model regarding revenue potential, risk, and cost impact and developed a new business plan and medium-term plan. Subsequently, the bank put in place precise targets for each function and department and communicated the required changes throughout the company. This high level of transparency was essential to restructuring the organization successfully and reaching a quick, fact-based agreement with the unions and worker councils. In an open dialog with the union, the bank negotiated new labor agreements and set up a transparent head-count-reduction process.
In the second phase, the bank executed the implementation plan in conjunction with respective HR departments in individual business units. It regularly validated the top-down targets and the formulation of the concrete measures needed to realize the defined targets over a sustained period of time. To build on this progress, the bank generated standard controlling and reporting tools for future workforce supply-and-demand monitoring processes.
Throughout the process, the open dialog helped employees anticipate future changes and reduced resistance among the staff. It also helped manage employee representative relations. Overall, LBBW was able to reach roughly 90 percent of its reduction goals by 2012—a year ahead of schedule—without enforced layoffs. Furthermore, the process strengthened the role of HR within the organization and improved relations with the workers’ representatives. HR became a strategic hub for controlling the EU project, an interface to the work council and trade union, and a partner in negotiating new labor agreements. Most important, through these measures, the bank was able to recover fully from the financial crisis.
There can be no growth without abolishing huge regulation, huge taxation, and huge political corruption. Basil Venitis, venitis@gmail.com, http://themostsearched.blogspot.com, @Venitis
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