management blog

It doesn’t cost much to keep in touch. Not that high-flying graduates will want to keep in touch with BT next year. No point giving them a call. The company has just announced that it will be suspending its graduate recruitment scheme in 2010. BT blamed “current economic environment and headcount pressures” for the decision. “At the present time, there is no timeline for re-entry,” the company added. In English, I think this means that it is closed until further notice.

What a terrible mistake. Until recently, BT was recruiting 130 graduates a year on this scheme. Nearly 5,000 young people applied for a place last year. But now the company has deliberately cut itself off from the next wave of bright young things. At least they won’t have to bother recording one of those sincere voicemail messages for callers who cannot get through – “your call is important to us” – since that is clearly the opposite of the truth in this case.

What happens to organisations that do not refresh themselves regularly with a new intake of people? They die. They run out of ideas. They keep making the same old mistakes. How well do BT’s top managers know and understand the important under-30s age-group, in which telephony and multimedia in all its modern forms plays such a huge role? Will BT have a better or a worse grasp of the under-30s market by forcibly excluding its brightest and best from its building? You don’t have to be a high-flying graduate to know the answer to that one.

BT’s decision is bad in another way. It is crude. From 130 to zero in one scything cut. Why zero? Why not 50, or even only 20? That could have been presented more positively: “Although under enormous pressure to save money at this difficult time, we at BT refuse to shut out the future. So we are, with regret, shrinking our graduate recruitment intake to only 20 this year. We will be admitting only the very cream of the crop. Are you good enough to make this final cut…?” Etc etc.

Everyone is cutting costs at the moment. It is unavoidable. Why, only last week, I declined the offer of a second bottle of Pétrus at lunch (joke).

But there is a smart way and a dumb way of cutting back. Stupid cuts merely lop off limbs, and make future growth less likely. Smart cuts make savings, reduce waste, and get you to focus on future profitability. But they are designed to improve your prospects, not limit them.

There must have been better (or at least less bad) ways of saving money than telling bright young people to cross BT off their list of potential future employers. Somebody senior at the company has got his or her wires very badly crossed.