Concentrate on Success – Outsourcing Your Human Resources Lets You Focus on the Big Picture

This article is written about a ‘real’ business with ‘real’ people issues. It is not intended to be ‘an answer all’ article however to provoke some thoughts in the reader that there are possibilities aside from the insolvency professionals.

By way of background this business had no idea software de recursoshumanos that they were about to trade insolently or that bankruptcy was an impending consequence of poor people mismanagement and inattention to detail.

We look at the human resource consequences. While there were financial, sales, marketing and other imperatives these are not addressed here although we did with the business.


o Insolvency refers to a business unable to pay its creditors. A business is solvent if and only if, it is able to pay all its debts, as and when they become due and payable.

o Bankruptcy is the legal process in which a person or business declares inability to pay debts. Any available assets are sold and the proceeds are distributed to creditors by a trustee in bankruptcy usually a specialist accountancy practice.

The signs of Insolvency and Bankruptcy

There are many sign that may point to a business trading insolently or about to go bankrupt knowingly or unknowingly.

These signs can include:

o Declining employee moral with employees picking up that all is not well in your business; overwork, increased management meetings, veiled threats and mutterings, threats, resignations, firings and the list goes on;

o An increase in rumour mill traffic (the grapevine effect);

o For no apparent reason or communication management begins to make unreasonable demands on employees and starts to engage in harassment and unreasonable behaviour;

o The business cannot pay its invoices and sometimes employee wages are late, you begin to receive increased telephone calls requesting payment however management make vague promises;

o The business financier calls to see management;

o You begin to receive threatening creditor communication;

You (the employee) suspect the worst and one day you are called to a meeting and told the company has gone into voluntary or forced liquidation (bankruptcy) and has ceased to trade and asked to leave your employment.

Case Study – The ‘Business’ – An Overview

We assisted a well known business that had very high brand awareness and a reputation for being at the forefront of its industries services and technology. This business was part of a global business that had products and services.

The dynamics of the business were not simple and included:

o 32 sites – city and remote areas thousands of kilometers apart;

o A business weakened by internecine rivalry, a lack of communication and trust between sites with a refusal to share knowledge or help;

o A culture of fear and disempowerment,

o A lack of trust in management that seemed justified;

o A lack of essential equipment and skills to perform their duties;

o A background that included; five months previously senior European management had dismissed local managers and had not replaced them leaving the business leaderless at the ‘coal face’;

o A very high employee turnover and a loss of corporate skills and history which had never been documented;

o Financial records were found to be incorrect with a number of clients not invoiced and other clients invoiced more than once resulting in an understatement of company debt and accounts payable running in the majority 180 days plus;