Restructuring rise drives contracting demand
Changes at Fonterra are in the spotlight but many other Kiwi corporates are quietly restructuring, says specialist
recruitment firm Convergence Partners.
Restructuring activity has picked up considerably in the past three to six months, according to Convergence Partners
partner Chris Palmer, who puts the trend down to forecasts of an adjustment in economic conditions.
While Fonterra is in the headlines, Palmer knows of several other major New Zealand companies undergoing a significant
re-shaping of their businesses, with many others making similar moves on a smaller scale.
“Economies go through cycles all the time and although the economic conditions remain strong there are forecasts of an
adjustment looming in the form of commodity prices, forecasts of lower economic growth and slightly increased
unemployment,” he says.
“For sectors like tourism the performance is strong as the economic conditions are very positive, however for some
exporters exposed to commodity markets and flatter overseas economies, they are experiencing or forecasting a downturn.
So the changes happening are very sector specific.
Palmer says this rise in reshaping organisations has led to increased demand for executive contracting, which is focused
on specific skill-sets including change management.
“There are generally two trends in executive contracting. When the economy is buoyant we see contractors engaged in
‘business as usual’ positions to cover vacancies created by increased job movements as people are being head-hunted from
one job to the next,” he says.
“The second trend, which we are arguably seeing more of right now, results in more contract opportunities in key
projects. Businesses are needing to address specific areas of a business, such as a cost reduction program or a greatly
improved management reporting suite, or change management specialists to help manage the business through a transition.”
There are several benefits to this approach, Palmer says, including the experience and fresh perspective these outsiders
bring, as well as the flexibility to grow or reduce resourcing as required.
He adds that bringing in external people to manage the change process can make it easier for those left behind after the
restructure is completed.
“It can be difficult for someone at the company to run that process, because they will still be there the next week and
will have to face their colleagues, who may hold some resentment towards them.”
“If you have an external person spreading that message, you can save peoples’ goodwill and relationships with
colleagues.”
Palmer says skill-sets such as financial, operations, marketing and technology are in demand, and there are also many
skilled human resources professionals available who have experience in managing transition programmes.
Many businesses seem to be taking a proactive approach by re-shaping their organisation ahead of time, rather than
waiting for a crisis to hit, he says.
“The residual impact of a major economic slump only a few years ago has most likely created a desire to front foot the
changes needed to retain performance.”
ENDS