Reducing headcount the smart way

Evans started the performance improvement company in 1980, borrowing against his house to fund the business. “Most people said I wouldn’t last 18 months,” he says.  But last he did and these days, Grass Roots Group turns over £300m.

Evans advises: “What you mustn’t do is cut back what will make you stronger when the recession goes away. We have conserved lots of assets – both cash and people. We go into a recession with zero gearing. We don’t borrow any money and we have loads of cash in the bank. That’s very unusual. We’re in a special space in that we can lend to the banks.”

During the early nineties recession, however, Evans made some tough choices when reducing headcount. “I decided to kill chiefs, not Indians. I got rid of the more expensive people in the company and tried to keep the people that make you money – the people on the ground,” he says.

“Sometimes you can build up a coterie of people in the middle and you have to question whether you need them. That’s a much more difficult job. It’s tough to fire a few people whose kids you know intimately.”

He believes the exercise held Grass Roots Group in good stead. “When the recession went away, we were doing things more efficiently and effectively,” Evans says, “The younger people then are now directors of the business around the world. They’ve leant to regularly reassess what they’re doing. There’s nothing like a crisis to train you up.”

Read David Evans’s views on being a budget entrepreneur in the February issue of Real Business.

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