Diversity is the First Casualty of Productivity Improvement

People from CALD backgrounds or those with disabilities are over-represented in downsizing statistics

Diversity is the First Casualty of Productivity Improvement

Near death experiences tend to change people’s behaviour.  They see things differently and begin to behave in ways that they never thought would have been possible prior to the life changing event.

For businesses in the disability sector, the introduction of the National Disability Insurance Scheme is an organisational version of the ‘near death experience’. Consequently, organisations across Australia are making changes that they never would have previously contemplated.  It is more than coincidental that many long serving and highly respected sector CEO’s are quietly exiting.  They understand that there are decisions that they will be required to make now and into the future, which so deeply cut across their values that they would rather leave the industry than be forced to implement them.  A new breed is moving in, who have richer commercial experience, but often lack the sensitivity and empathy which characterised the sector in days past.

The equation for most disability sector businesses is simple, yet the answer is incredibly complex.  Regardless of who controls the funding, the overall mix is lower and as a result, services must either be cut back, or substantial efficiencies must be found to continue to deliver the types of outcomes that have made these businesses successful.  In some businesses, services will contract in addition to efficiencies being delivered.

The macro economists tell us that this is simply industry reform working through a tried and tested cycle and that in time things will settle.  Too many players, poor productivity and now a de-regulated market with the purchasing power moving to the client.  So many industries have experienced versions of this before and the disability sector is just the latest. Mergers will occur, the weakest and smallest will disappear and in a decade a more mature disability sector will have emerged.

This is not an essay on the merit or ethics of the change, but an acknowledgement that such change has happened to others before.  Consequently, there are lessons of history that should be considered as your business embarks on its productivity improvement program.

  1. Diversity is the first casualty

When chasing major and urgent productivity improvements, employees are asked to change their work behaviours and complete tasks faster, with fewer errors and often carry higher caseloads.  People from culturally and linguistically diverse backgrounds and those who have physical or cognitive disabilities or impairments can take longer to adjust to changed work environments, particularly when tighter performance expectations are implemented.  This sector has a larger proportion of these people than any other in Australia.  When we add the pressure of needing to downsize a workforce at the same time, it is little wonder that these employees are over-represented as downsizing statistics.  If you have a team of ten and next year’s budget enables only a team of eight, how will you decide who stays and who goes? It is relatively straightforward to manage the downsizing in accordance with workplace relations laws, but far trickier to do it in a way that leaves the remaining workforce feeling that management has acted with decency.  Trust is eroded at this step if downsizing is handled in a clumsy way.

  1. Change is a threat and a reward

Not everybody inside your organisation is going to view these changes as a threat.  Poorly designed change programs fall for the trap of treating change as a threat, which has to be overcome.  When organisational change occurs, there are a silent but influential group who view what is happening as long overdue and an opportunity to refresh and renew the business.  To this group, the change is their reward for loyalty.  Find them, engage them and harness them as your change champions.

  1. New leadership skills will be required

Even if the same people remain, new skills will be needed to ensure that the business thrives.  Cost cutting and headcount reductions are short term fixes, which will soon unravel if the same leadership approach remains.  Employees at all levels in disability organisations will benefit from carefully facilitated workshops that help everybody understand the new business paradigm. Discussing and laying the ground rules about greater levels of accountability will help to maximise the chance of employees buying in and not feeling ambushed.  Organisational leaders in particular, must develop a laser focus on what success looks like in the new organisation, including adjusting performance management expectations to lock in productivity gains.

This sector is changing fast.  History tells us that the early adopters will thrive, so get busy working on your change plans and seize the initiative while control remains in your hands.