A company is facing declining revenue due to inflation and market volatility. The board immediately proposes a 20% workforce reduction to cut costs.

Question: Is this a strategic response or a reflex action?

This outcome largely depends on the rigour of the board’s underlying analysis. Globally, evidence indicates that organisations undertaking large-scale layoffs may achieve short-term stock price stabilisation. However, many subsequently face challenges related to long-term productivity and declining morale. Research by Harvard Business School suggests that layoffs can reduce the productivity of remaining employees by up to 20%, primarily due to fear, uncertainty, and disengagement.

Accordingly, the key strategic considerations should include:

1. Has the organisation conducted a thorough assessment of productivity gaps to determine whether workforce reduction is necessary?
2. Have reskilling or redeployment options been fully explored?
3. Have inefficiencies in other areas been addressed before prioritising workforce cuts as a cost-reduction measure?

If people are the primary drivers of organisational value, workforce reduction should be treated as a last resort rather than an immediate financial response during periods of difficulty.

Case Study/Scenario 2: A tech-driven organisation invests heavily in automation and AI tools, reducing its need for certain roles.

Question: Should efficiency automatically override employment considerations?

Technology should augment human capability rather than replace it because it is an enabler that should be effectively integrated with human effort. According to the World Economic Forum, while automation may displace certain roles, it is also expected to generate millions of new opportunities globally, particularly in digital, analytical, and human-centric fields.

The core challenge, therefore, is not automation itself but the management of workforce transition. A responsible approach to adopting AI and technology should include:

1. Strategic workforce planning
2. Structured reskilling programmes
3. Clear internal mobility pathways

When these measures are implemented, the risk of technology displacing employees is significantly reduced. Employees can be redeployed across functions as roles evolve, provided there are structured reskilling initiatives that prepare them for new responsibilities.

Organisations that replace employees without investing in upskilling risk losing institutional knowledge and trust capital, both of which are difficult to rebuild.

How organisations can totally avoid dealing with redundant employees

While automation may displace certain roles, it also has the potential to generate new ones within the organisation, spanning digital, analytical, and human-centric functions.

As roles are impacted by AI and technology, employees can be redeployed into customer-facing or other human-centric positions, ensuring they remain within the organisation rather than being exited.

Consequently, the impact of redundancy can be minimised through effective workforce planning, structured reskilling programmes, and the establishment of strong internal mobility pathways. These measures enable employees to transition into the new roles created by AI.

In Nigeria, there is increasing brain drain. Some argue that employees are leaving because organisations treat them as disposable.

Is there data that supports this perception?

Research by Gallup consistently shows that employees who feel undervalued, particularly high-value employees (HVEs), are significantly more likely to disengage or seek opportunities elsewhere. In emerging economies such as Nigeria, disengagement rates are often estimated to exceed 60%. When professionals perceive themselves as cost variables rather than growth partners, the likelihood of mobility increases, both internally and across borders, contributing to the “japa” phenomenon.

In today’s workplace, retention is largely driven by:

1. Development opportunities: Employees who see clear pathways for growth are more likely to remain with the organisation.
2. Fair compensation: Employees expect equitable rewards that reflect their contributions and value.
3. Psychological and physical safety: A lack of safety, both mental and physical, can prompt employees to exit.
4. Leadership trust: Employees must have confidence in leadership and hold leaders accountable for their commitments.

Organisations that neglect these factors often incur significantly higher replacement costs, typically ranging from 50% to 200% of an employee’s annual salary, depending on the role. Consequently, treating employees primarily as expenses can ultimately result in greater organisational costs.

What people-as-assets model looks like in measurable terms

A people-as-assets approach incorporates measurable indicators such as:

1. Employee engagement scores.
2. Revenue per employee (and employee cost as a percentage of total revenue).
3. Internal promotion rates.
4. Return on training investment.
5. Voluntary turnover rates.
6. Absenteeism metrics.

These metrics enable organisations to assess whether they are operating a people-as-assets model rather than a people-as-expenses approach. They provide a structured basis for evaluating how human capital is managed and valued.

Evidence shows that organisations with high engagement levels can achieve up to 21% higher profitability compared to those with low engagement. Accordingly, just as returns on financial capital are measured, returns on human capital should also be systematically evaluated.

Case Study/Scenario 3

Consider a company that prioritises aggressive productivity targets. Employees consistently work extended hours, burnout increases, but revenue rises.

Question: How sustainable is this model?

Short-term productivity gains can obscure long-term organisational risks. Research by the World Health Organization (WHO) has consistently linked prolonged work-related stress to increased health risks and reduced cognitive performance. Workplace burnout often results in higher error rates, elevated healthcare costs, diminished creativity, and increased employee turnover.

Sustainable productivity requires balancing performance with employee well-being. Organisations that prioritise output at the expense of their workforce risk undermining their long-term stability and foundation.

Responsibility of HR professionals in preventing the ‘expense mindset’

HR professionals are responsible for providing the following evidence to the board:

1. Present workforce analytics.
2. Quantify the costs of employee turnover for leadership.
3. Link employee engagement to profitability.
4. Propose alternatives to restructuring strategies.

Advice for Nigerian business leaders: Balancing financial performance with human value

Financial capital sustains a business, but it is human capital that drives it. While people can invest resources into a struggling organisation, recovery will be slow without trust, competence, and commitment from its workforce.

The most resilient organisations are those that consistently prioritise skills development, leadership capability, organisational culture, and ethical governance. Treating employees merely as costs undermines competitiveness, whereas recognising them as assets strengthens long-term sustainability.

Conclusion

It is important to recognise that, while a balance sheet may record expenses, history records how organisations treat their people. Accordingly, employees should be regarded as assets, not merely as expenses.

This thought leadership piece was adapted from the March 2026 (Season 3, Episode 1) edition of the ‘CIPM Radio Show’ and represents the opinions of the speaker during the session.

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This was made known during a courtesy visit by a CIPM delegation, led by the Vice President, Mrs. Chidinma Obiejesi, FCIPM, on behalf of the President and Chairman of the Governing Council, to the Vice-Chancellor, Professor Folasade Ogunsola, at her office on Monday, March 16, 2026.

In advancing the Institute’s vision, the President and Chairman of the Governing Council, Mallam Ahmed Ladan Gobir, FCIPM, fnli, reiterated in his address CIPM’s strategic focus on deepening engagement with tertiary institutions to promote human capital development and uphold global standards in people management. His message, delivered by the Vice-President, Mrs. Obiejesi, highlighted key areas of collaboration designed to create long-term value for both institutions.

Central to the proposal is the integration of CIPM’s professional certification pathway into the university system, enabling students to pursue dual qualifications that combine academic excellence with globally recognised professional credentials. The Institute also proposed structured membership engagement for the University’s leadership, management staff, and HR practitioners, alongside initiatives to introduce students early to the benefits of professional certification.

To further strengthen this collaboration, CIPM proposed the establishment of a Study Centre within the University to support continuous learning, certification, and capacity building. The Institute also invited UNILAG’s academic community to actively participate in the 3rd CIPM International Academic Conference, scheduled to hold at the University from June 2–3, 2026.

In her response, Professor Ogunsola expressed strong enthusiasm for the partnership, noting its potential to significantly enhance student employability and professional readiness. She emphasised that the collaboration aligns with the University’s commitment to industry engagement, adding that it would also strengthen the professionalisation of the University Registry through structured training and capacity development.

The Vice-Chancellor further highlighted the value of such partnerships in bridging academia and industry, enabling faculty members to gain deeper insights into evolving workplace dynamics while shaping relevant and impactful research.

The engagement reflects CIPM’s broader strategic objective of building sustainable partnerships across Nigeria’s tertiary institutions to drive excellence in human resource management, expand professional opportunities, and position the HR profession as a critical enabler of national development.

Both parties expressed optimism about the collaboration, recognising its potential to advance professional education, enhance institutional capacity, and contribute meaningfully to the future of work in Nigeria.

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In her remarks, the Registrar/Chief Executive of CIPM, Ms. Oluwatoyin Naiwo, FCIPM, Chartered FCIPD, commended the students for their commitment to seeing the MoU through. She highlighted the value of CIPM membership, which she said confers global recognition due to the Institute’s mutual affiliations with the CIPD (UK) and CPHR (Canada). “Being members of the Institute makes you a global asset. You must continue to acquire values that set you apart and prepare you to go global.” She stated.

Ms. Naiwo also urged the students to contribute to building a stronger Nigeria by embodying professionalism, integrity, and excellence. She warned against the prevailing notion that leaving the country is the only route to success, as meaningful impact can be achieved locally. “The institute wants to train and hand over to a younger workforce that wants to make an impact and be different in a positive way that will make Nigeria better.” She further advised the students to conduct themselves peacefully during their elections, stressing that the Institute aims to nurture a future workforce capable of engaging government constructively and non‑violently. The Registrar concluded by encouraging the students to be proud ambassadors of the Institute and contribute to building the Nigeria they desire.

On his part, the President of the National Association of Polytechnic Students (NAPS), Comrade Oyewumi Festus, described the agreement as a “landmark opportunity” for the student body, emphasizing that the collaboration aligns with the association’s long-term vision of empowering its members.

“We are grateful to CIPM for granting us this remarkable opportunity to partner with a global organization,” he said. “Our students across the country will be strong ambassadors of CIPM going forward.”

Festus revealed that NAPS first approached CIPM in 2024 with a proposal for partnership, noting that the association’s goal is to ensure students gain not only academic knowledge but also the soft and professional skills required to contribute meaningfully to society. He added that members intend to participate actively in CIPM conferences and professional activities to broaden their exposure.

Also speaking at the event, NAPS National Stakeholders Adviser, Comrade Abdulmumeen Ibrahim, assured that the association will work closely with students and lecturers nationwide to maximize the benefits of the partnership.

In his closing remarks, CIPM Deputy Registrar, Mr. Gbenga Odetunde, MCIPM, applauded the NAPS leadership for pursuing the initiative and urged them to put the MoU into meaningful use.

As the ceremony came to an end, the message was clear: the MoU marks not just an agreement on paper, but the beginning of a transformative journey aimed at shaping a more competent, confident, and globally competitive future workforce for the nation.

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