Recent reports reveal that global auditing firm, KPMG, is planning to implement significant employment reductions due to minimal fluctuations in employee turnover – an unusual approach as the world slowly emerges from the COVID-19 pandemic. The lack of attrition, a usual stimulus for fresh hiring, has resulted in wide-scale redundancies affecting hundreds of employees across various departments in the company.
Unlike many other industries hit hard by the pandemic, where job cuts were the result of economic challenges, the situation stands unique for KPMG. The firm experienced unusually low voluntary attrition during 2020-21 as economic uncertainties tied to the pandemic saw many employees sticking to their jobs. KPMG hoped for a rise in employee departures leading to fresh hires. However, this expectation came to naught. The lack of attrition blocked the flow of new talents coming into the firm, triggering a series of job cuts to make room for new hires.
According to several online publications, the brunt of these job terminations will be shouldered by the UK and Australia offices, highlighting the firm’s global strategy to refresh and realign talent. The phenomenon underlines one of the unique impacts of the economic unease brought by COVID-19—employees holding on to their jobs tighter, prompting a chain reaction of redundancies to accommodate fresh talent.
“Such a firm-wide reshuffle, while unfortunate, is necessary for the company to continue offering the quality of service our clients expect,” a senior executive from the firm said, speaking on condition of anonymity. “While we are doing everything in our power to support those affected via outplacement services and severance packages, these job cuts were a difficult but needed decision,” they added, expressing the company’s regret over the situation.
While low voluntary attrition is generally a positive for companies, showing high employee satisfaction levels, it can unexpectedly result in stagnant growth when new ideas and talents are not introduced. Analysts believe that KPMG’s massive job cuts can be seen as a forced attrition strategy aimed at facilitating fresh and diverse talent.
However, the piecemeal redundancy strategy invoked by KPMG has received a fair amount of online criticism from job-seekers and business analysts alike. Critics argue that such layoffs will only increase job insecurity among employees, further leading to low motivation and productivity.
The KPMG job cuts follow similar strategies implemented by other big players in the consulting world, such as Deloitte, who had to lay off 5% of its US workforce, around 5,000 employees, during the pandemic to remain competitive. Yet the uncommon cause for KPMG’s cuts suggests firms are not out of the woods yet, even as economies inch towards recovery.
“The silver lining here is that these job cuts indicate firms like KPMG are eager and readying to hire again—but this time aiming for fresh, agile talents,” said Sophia Koury, a business analyst and industry expert. “This is an interesting scenario and a clear indication that firms are preparing for the next normal, reshaping their talent pool in anticipation of an imminent post-pandemic economy.”
In the tumultuous times of the pandemic and the unique employment crisis following it, the KPMG scenario unveils an intriguing facet of labor dynamics. A lack of attrition, seen conventionally as a sign of stability, can lead to sweeping job cuts to pave the way for new hires in the face of a changing business landscape.
While KPMG’s strategy to enact job cuts may be viewed as drastic, the move is an illustration of how companies might have to navigate the labor market’s paradoxes in the post-COVID era.
Original Source: https://www.personneltoday.com/hr/lack-of-attrition-kpmg-job-cuts/
