Tech startup uFlexReward has created a game to persuade HR departments to come up with more innovative ways to cut costs – where laying off staff is not an option.

The effects of the Covid-19 pandemic have been multifold, from creating a global healthcare crisis, shutting down businesses to causing widespread unemployment.

Economies were expected to recover in the second half of the year, but the impact of the pandemic continues as it leads to permanent job losses and inflation.

Firms facing dire financial straits have resorted to axing millions of staff, with redundancies hitting record highs. With economic demand suppressed, the incentive for businesses to retain workers has been sharply reduced.

However, one company is trying to persuade HR departments to come up with more innovative ways to cut costs – where laying off staff is not an option. 

Unilever-owned firm uFlexReward, an HR tech startup that collates all employee costs into one real-time platform, has created a simulation that allows executives to explore the impact of huge job cuts on their future earnings prospects.

Harnessing insights gleaned from vast datasets that HR management systems and benefits administration platforms use to calculate employee rewards, uFlexReward CEO Ken Charman and his team designed a corporate wargame for companies to research alternative solutions to redundancy that looks at early choices related to workplace restructuring. 

And it has now caught the eye of Bank of England Chief Economist Andy Haldane, who just signed up to judge the winner of the game.

“Many companies across the UK are facing financial strains as a result of the COVID crisis,” Haldane told Reuters.

“Simulation tools can help us understand how best to alleviate these strains while preserving jobs, in a way that helps both businesses when making difficult commercial decisions and policymakers when making difficult economic decisions.”

The head-to-head version of the game will take place on December 3 and will feature teams made up of executives from Unilever and NYSE-listed technology services provider Endava.

Thinking outside the axe

The game was designed during the UK’s first lockdown this year and is free to play on the company’s website.

The objective of the simulation is that players must devise a strategy to cut costs of a fictional firm by 20 percent without mass redundancies.

It also asks participants to take into account other factors like pay inequality, valuing key workers, market forces, automation and technology, and flexible demand-driven workforce models. HR theories on the Future of Work are also to be kept in mind.

The wargame according to uFlexReward is “a realistic simulation that can be used by reward practitioners, business executives, employees and the general public to find solutions” to the critically important question of “people cost” – the biggest category of expense for most firms, and usually the first to be cut – in the new digital age during a dramatic financial downturn.

The game collates staff salaries, pensions, bonuses and share awards into one real-time cost-base, helping players see different ways of trimming overheads. This can include making a range of smaller cost cuts in a ‘broad-front’ approach as opposed to scrapping entire business units or staff bonuses.

And how HR leaders in global business face down one of their biggest challenges to date is likely to set the stage for how the Future of Work evolves.

Speaking to Reuters, Charman said, “change is coming that will allow people to do several things at once…if companies lose people who are highly trained, experienced and loyal, they won’t get them back”.

Charman hopes the game might coax the HR community to innovate cost-cutting measures, and employers to waive dividends and executive pay increases and offer job-sharing, reduced hours or part-time roles with flexible working agreements to staff that might otherwise become unemployed.

During an interview over the summer, Charman pleaded with HR departments to “stand up and meet the world, which needs us in this moment of crisis”.

“There are other things beside the axe we can do to help companies survive and cut costs and create a fairer society,” he said.