Abstract

This large oil & gas company was undertaking a significant enterprise cost reduction effort driven by dramatic cost pressures and a narrowing revenue stream across the greater oil & gas industry. Company leadership identified headcount reduction as an early cost savings win and enlisted Deloitte to help them in their efforts to structure and facilitate their organization design, employee selection, and transition management phases.

The Deloitte Team designed a customized and discrete process to facilitate the organization design, employee selection and transition management phases, including the build and implementation of a data-driven solution set to measure their progress towards targeted cost reductions by Function, Sub-function or Location.

The Challenge

The company needed to employ a headcount reduction initiative in order to achieve aggressive cost savings mandated by the leadership team. Designing and implementing an objective, transparent and legally compliant approach to organization design and employee selection decisions is complex and challenging. Additionally, Business and Human Resources leaders needed to record and measure progress towards targeted cost reductions.

Specific challenges included:

• Inadequate performance management data. The company lacked robust performance management data, making it difficult to select employees based on historical performance. To address this difficulty, Deloitte helped them identify alternative decision criteria for their design and selection processes.
• Inadequate system of job classification. They did not fully leverage the capabilities of its Human Resources technology system to classify employees into a job family, making it difficult to map employees to positions in the new organization based on job family or classification. This resulted in larger applicant pools and required a sophisticated tracking tool to automate the selection process.
• Aggressive timeline. The senior leadership team demanded measurable cost savings within a very aggressive timeline, requiring an expedited, yet legally compliant process for employee selection, as well as a financial reporting function to monitor cost savings.

How We Helped

Deloitte helped the company in their efforts to implement solutions around the following key areas:

• HR Project Management Office (PMO) — Recommended a structure for the establishment of a PMO to plan and manage the workforce reduction.
• Workforce Planning Playbook — Helped them develop a step-by-step, customized guide for HR to enable a structured, consistent and legally compliant approach to all of the key activities for this effort. The playbook included best-practice templates to support the slating, assessment, and selection processes.
• Transition Guidance — Provided high-level advisory services on ways to approach the “to-be” organization design, communications, and re-enrollment of the retained organization.
• HR Workshops — Facilitated a series of HR workshops and design sessions to help them gather HR input and buy-in for the playbook, processes, and solution sets for carrying out the workforce reduction effort.
• HR Training — Trained key staff within HR to use the playbook and to guide the organization design, employee selection and transition activities.
• Workforce Tracking Solution Set — Helped them configure and deploy a data-driven solution set to manage the tracking of employees and associated cost savings through the selection and transition effort.

Solution

At the completion of the project, Deloitte successfully supported the company in the execution and tracking of its headcount reduction efforts, and the company achieved the following outcomes:

• Established project management office (PMO) and key activities to plan and manage the workforce reduction initiative.
• Designed customized and discrete process steps to facilitate the organization design, selection, and transition processes.
• Enabled:
  • Visibility into workforce data enables ability to both monitor workforce reduction and reach cost targets.
  • Access to reports for senior management and line of business leads.
• Deployed a data-driven solution set to support the decision / selection process, providing a transparent, consistent and reusable approach and support systems for workforce reduction and optimization efforts. Database in place to record employee selection decisions and the associated costs and savings of those decisions. The financial reporting feature of the database enables the company to measure its progress towards targeted cost reductions by Function, Sub-function or Location.
• Incorporated new Workforce Planning Guide (Playbook), which captures customized guidelines for each step of the process.
• Trained core project team, HR business partners, and HR Representatives on process steps, guidelines, and Workforce Tracking Database and tools.
• Deployed a new data-driven Org Charting and Modeling solution to model and capture organizational selection decisions.
• Realized an easy to use automation and standardization of the complex workforce reduction process.