Ep 831: The Talent Employers Are Throwing Away

0:00Redundancies are dominating the headlines at the moment, and AI is the most common reason being given for them. The reality, though, is much more complicated. Employers are letting people go and then hiring for very similar skills just a few months later. So how well do companies really understand their own people? Keep listening to find out. Support for this podcast comes from Vonk. Vonk's talent attraction platform is now unified as Echo. One platform, six connected stages, a shortlist that you can explain. Instead of disconnected hiring tools, Echo brings together job content creation, distribution, attraction, screening, interviewing and scoring in one continuous agentic workflow, delivering up to 70 % faster time to hire and 75 % fewer candidate drop-offs.

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1:54Hi there, welcome to Recruiting Future with me, Matt Alder. Redundancies have become a constant feature in the talent market. AI is taking a lot of the blame, but the drivers behind this are much broader. Jobs and skills are changing faster than most organisations can keep track of. And the conventional response is to restructure the workforce and then hire in the new skills that are needed. That approach relies on a ready supply of perfectly qualified candidates. And in the fast-moving skills market, those candidates are increasingly hard to find. It also assumes that employers already have a clear view of the skills and potential within their existing workforce, and this is rarely the case.

2:40So what does a smarter approach to restructuring look like? My guest this week is JC Townend, president of the ADECO Group for the UK and Ireland and CEO of LHH, the ADECO Group business that supports individuals through redundancy. In the UK alone, LHH works with more than 20 ,000 people a year who've been made redundant, which gives JC a rare view of both the decisions employers are making and where the people who are affected by them end up next. In our conversation, she explains what is really driving the current wave of restructuring, why the financial case for replacing people rather than redeploying them has changed, and how the best employers are rethinking workforce planning.

3:26Hi JC and welcome to the podcast. Hi Matt, it's great to be here. A pleasure to have you on the show. Please could you just introduce yourself and tell everyone what you do? I'm president of the ADECO Group for the UK and Ireland. ADECO Group is one of the largest staffing and professional recruiting and end-to-end talent solutions companies in the UK. I'm also CEO of LHH, which is a subsidiary of the ADECO Group. And what we focus on is supporting individuals through redundancy. Redundancies just seem to be everywhere in the news at the moment. Lots of talk about them, LinkedIn full of people looking for work.

4:08What's actually going on in the market? And how does the wave of restructuring that's happening at the moment compare to what you've seen in the past? Because you've been watching this for quite some time. Yes, I've been the CEO for the last eight years. And I do see a very big change in the markets in that time. So if I think back to eight years ago when we first, when I first started working with companies through redundancy, you'd see a lot of major restructuring. So companies doing, you know, 500 or 1 ,000 people redundancies all at once. And that tended to happen only every maybe five years for a company.

4:47or we had lots of companies who hadn't done a redundancy in 20 years. Now, however, we're finding a large number of companies doing redundancies and doing them every single year in smaller bite-sized pieces. So we recently did a survey and we found that 87 % of the companies in the UK and Ireland are intending to do a redundancy this year or have already completed it in 2026. That's a big number. And what's driving it? Because all the headlines are about AI and AI displacing jobs, those kind of things. Is that actually happening? Or is that just a convenient explanation for decisions that companies were going to make anyway and something else is sitting behind all of this?

5:37It's a little bit of both. It's a little bit of mix. So if I think back three or four years ago, the surveys that we were doing then of clients found that redundancies tended to happen for three core reasons. So 40 % said they were actually making redundancies because they had overhired during boom times. Another 40 % found that they were making redundancies due to some kind of restructuring or M &A or something like that that was happening. nowadays we're finding 20 report that they're doing redundancies because of ai or some kind of digital or automation improvement um but 20 said they're really seeing a skills mismatch and that goes well beyond ai where we're finding that jobs and skills are evolving so rapidly that companies are finding the people that they have in roles are no longer fit for purpose for the roles that they need today.

6:46I think that's really interesting because as you say, things are evolving very, very quickly and it's a much more nuanced picture than just AI is taking away jobs. In terms of how companies understand their own organizations, do you think they actually understand how the work gets done? Because with so much restructuring going on, can that be effective without actually understanding how the individual roles and tasks and everything fit together and how the company actually operates in practice? I think where companies are missing the boat is the understanding of the transferable skills from one department to another.

7:26So for example, within teams and departments, we find that there's a very strong understanding of the skills they have and the talent they have. However, between different departments, we see almost no understanding of what skills are transferable to another area of the business. So in the past, companies wouldn't think about, for example, someone in finance being able to move to a position in marketing, right? Those just seem completely different. But what we're finding is in the UK and Ireland, we work with more than 20 ,000 individuals a year being made redundant. And we're finding 60 % of those after they're made redundant are moving into an entirely new career, very different from the role they had been in, partly because of their interests and partly because their skills and roles are no longer relevant.

8:20So if they're doing that once they've left a company, we're trying to spread the message that they can actually be doing that within a company very successfully. Absolutely. I think that's really interesting. And it's a different way for companies to think. And I suppose we'll dive into that in a bit more detail in a second. But before we do, just to talk to something else that seems to be happening quite a lot, which is obviously related to this, is that companies are making people redundant because of the whole skills issue. But then they're rehiring for very similar skills further down the line.

8:56Why is that happening? And what is it that employers are getting wrong? What should they be doing differently? You know, what came to mind is, I think six years ago, I spoke with a CHRO of a financial services company in London. And at the time, the sense was, he said, actually, he was very happy to let people go, and then hire skilled trained people, precisely fitting the role that they wanted in the new role, right? So there was a sense that your existing employees could not precisely match the new role that you're trying to fill. And so there's a sense of being willing to accept that huge cost, the redundancy and severance cost, and then the hiring and upskilling costs of the new employee for the benefit of getting this very perfectly trained person in the market.

9:50What's changed is those perfectly trained people in the market don't exist anymore. Because the roles are changing so quickly, somebody has to train those skills. And so you're getting people who are maybe 70 % qualified or 80 % qualified for those new roles. Because of that, that changes the financial calculation of the benefit of transitioning someone within the company compared to the kind of more typical old style fire and rehire methodology. That's really interesting because it's always something that has really bugged me about the world of work really right from the start of my career is, you know, companies really not appreciating or not having the mechanisms to really see the full potential of people, the other skills that they might have that aren't relevant to their job or the potential they've got to develop.

10:51It seems to be a problem for forever. A company's getting better at it? Is it changing? Obviously, there is considerable pressure to do so now because of the skills issues that you're highlighting. But are companies starting to think differently about this? They are, and they should. I think we did this to ourselves, right? So in the early days, a lot of our central departments would create requirements that people couldn't be made redundant if 60 % of their skills matched into another department. Those rules actually became a negative impact on the perceptions of people moving within companies where hiring managers felt disappointed that they had to accept someone who wasn't necessarily a perfect fit.

11:46But the problem is, nowadays, I think people are being much more understanding about how a really quality person in one unit can move to another unit. And what we are doing is teaching individuals how to interview for those jobs with just as much rigor if they were interviewing externally. and learning to sell themselves, how to identify their transferable skills so that the new department and the new manager is actually excited to have this really outstanding employee who is very loyal to the company, who understands the culture, who has very little kind of startup time because they already know the company.

12:35And having those new managers and new departments actually being excited about bringing this really high quality person into the group. Do you think that there is an onus on the employers here to kind of really rethink the processes they go through for internal hiring in order to sort of facilitate that? Because external hiring and internal hiring are treated very, very differently, aren't they? Should they just be seen the same way? What would your recommendation to employers be around this? Yeah, so we've just written a report on this specifically, which is freely available in the market. But what used to be like restructuring used to be kind of an annual planning process, and it used to be like massive kind of cost control or done at a single point during the year.

13:26Now we're finding what the best companies are doing are adopting a more agile workforce planning process. So this is a continual process of thinking about what skills they're going to be needing, not just in the coming year, but three years out and five years out, and deliberately giving their employees some of that upskilling for the future and the understanding of the ability to be mobile within the company, not just in the old traditional form of moving up a ladder in a single career path. but actually moving out into a matrix of opportunities and other departments and other similarly qualified roles.

14:14Especially as you get into the managerial levels, those kind of really outstanding managers can transition to departments that are leading people that aren't necessarily what they did when they were a junior person. And as a final question for you, because this is obviously a kind of a highly significant time in terms of the change that's happening and the disruption, what do you think the future looks like? How might employers be thinking about all these things in two or three years time? What do you think might happen? We used to say that, you know, 20 years ago, people would have kind of a career for life.

14:53We're now saying that new graduates starting now might have five very different careers in their lifetime. A thing that's different is we're finding that people can actually have those careers at the same company. And having companies kind of embrace that understanding and give employees the tools for them to develop their careers in really creative ways within the company. they then get all those benefits of not transitioning staff out and transitioning staff in while allowing the individual to advance in their career in lots of different ways and filling those skills gaps that the companies are going to have.

15:34But that requires an investment, a change in the culture to this concept of lifetime learning, giving individuals direct opportunities to upskill, teaching them about how to think about expanding their role in the company without feeling like they're being disloyal to their current team and bringing managers into the process as well and incentivizing them for growing talent in ways where talent might move off of their team into other really valuable parts of the company. JC, thank you very much for talking to me. Thank you very much, Matt.

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17:12Thank you.