In our last article we reviewed some do’s and don’ts to ensure that your business emerges in a stronger position than its competitors. Now, when the economy begins to stabilise, consumer confidence will increase resulting in a more buoyant market. Exchange rates will settle down, providing new opportunities for those in a position to take advantage of them.
For organisations that aren’t prepared for the eventual upturn, it will be a struggle to recover. They will have difficult problems to tackle, such as lost market share, fewer new products, dilapidated infrastructure and a talent deficit. But, for organisations that have planned for the upturn and managed their HR strategy positively, there will be an opportunity to move ahead of the competition.
Now that the going is getting tough, HR practitioners need to be pushing the leaders of their organisations to do the right thing for the long-term value and sustainability of the business. That means truly recognising the profound link between leadership and colleague engagement and making sure that “real” leadership talent is retained, developed, and most importantly, allowed to lead through the tough times.
It means considering a differentiated pay policy which rewards top-end performance. It means not squandering those ‘oh so valuable’ development dollars on somebody’s favourite management course but targeting them on interventions and programmes that really will make a demonstrable difference “on the job” right now! And it means creating a truly engaged workforce by getting “all the brains in the game” rather than leaving strategy and decision-making to the anointed few at the top of the corporate tree.
For those organisations that are looking to prepare for the eventual upturn, here are a few areas to focus on in how to manage your workforce in a recession. Kellie Tomney, Executive Manager Recruitment & Branding Strategy, St. George Bank, Australia stated that “it is all about positioning your organisation ahead of the rest, delivering on new business opportunities and being ready for the upturn.”
1 Think long term
Think creatively about how to reduce employment costs, such as new ways of working and work reorganisation and remember that making people redundant and recruiting again later when the market picks up is expensive. Bear in mind your long-term reputation and responsibility to act as a fair employer. Protect and make the most of the training budget. Focus resources on key areas such as improving line management capability and customer service.
2 Maintain employee engagement
Redouble your efforts to boost or maintain employee engagement and think about creative, non-financial ways of motivating employees such as recognition schemes, team-building days and employee awards. Meeting the diverse needs of a multi-generational group – from baby-boomers to generation X and Y – is vital in creating inspired and motivated employees. By seeking their input/views in staff satisfaction surveys the aim is to generate positive change that takes into account the broad needs of all your employees. The overall result is an organisation that cares for its people, who, in turn, care for its members. Employee engagement during difficult economic conditions is arguably more important than in good times.
3 Strengthen line management capability
Support your managers so they are better able to operate in periods of traumatic change and brief line managers in full on developments so they can talk to their teams knowledgably and answer concerns. Promote face-to-face communication as it is by far the best! Recognise the vital role that line manager’s play in every aspect of the employment relationship – make sure they are properly trained in day-to-day people management skills. Remember that line managers also need support and leadership from senior management and from HR to equip them to manage difficult situations and avoid burning out.
4 Support employees’ health and well-being
Recognise the psychological burden and impact that can arise in a recession. Where possible provide opportunities for flexible working to help employees balance their work and home lives. It is important to recognise the potential negative impact of ‘survivor syndrome’ if your organisation has made redundancies, the employees that remain often suffer from guilt while coping with increased workloads. Recognising individual and team contributions with acknowledgement and thanks, costs nothing, but delivers much.
5 Develop a strategy for redundancy so it’s there when you need it
If you haven’t done so already, you need to start thinking about how you will handle significant redundancies. It is important to ensure the HR team is equipped to deal with redundancy situations at both collective and individual levels. It is important to manage any redundancy situation in a fair and equitable manner. The smart action is to plan to cut the costs that add the least value. While everyone starts with this objective in mind, the reality is that without understanding the core processes of your business and identifying where people are working on those core processes and at what percentage of a given team’s working day in non-care, we won’t understand where the low value cost is to be found. The goal of HR in these troubled times is to harness corporate intelligence, to ensure that firm action is taken, but that it is based on the best that modern productivity methods offer.
Essentially this means truly understanding “who is doing what” and assessing the relative merits of the activity in relation to core process.
6 Think about ways to minimise redundancies if workforce reductions are inevitable
Take advantage of natural wastage and/or offer voluntary redundancy terms. Redundancies can have a serious negative impact on morale and performance. Reduce or eliminate overtime working and try to encourage staff to suggest how jobs can be done more efficiently and costs saved, they may come up with ideas that you hadn’t thought of!
7 Consult with your workforce
Wendy McInnes, Regional Director – Employee Research, NWC Opinion Research, Australia says “that employees tend to be averse to change within their organisation, regardless of an economic downturn, business diversification or restructuring. Individuals react to change differently, so predicting, understanding, planning and customising the right business response is critical to success in tough times.”
When staff members are satisfied with communication from management, they are also more likely to be positive about change and more trusting, which is a vital component of engagement. Ongoing communication, recognition and reward will help keep staff engaged during a downturn. Recognising and dealing with the psychological impact on staff through ongoing communication is important, but it’s also essential to address the practical impact of changes on job roles. Seek ideas from employees about how to best manage the impact on their job roles. The simple act of asking them will help engagement levels and the information will be invaluable.
8 Establish fair and objective selection criteria that will help you to retain key people
In selecting people for redundancy, use objective criteria that can be applied in an unbiased way. This can include, for example, attendance records, disciplinary records, skills, experience or competence, work standards or aptitude to work. Ensure that the selection criteria are based on accurate records and are not discriminatory, directly or indirectly. More importantly, ensure that you are not losing vital skills in encouraging voluntary redundancy.
9 Help redundant employees to find other work
Those who are facing redundancy need support and advice on how to cope. Consider suggesting they contact recruitment agencies who may be able to help redundant employees find new employment. Remember your treatment of employees who leave the organisation will impact on the attitudes and loyalty of those who remain, not to mention the damage that may be caused to your firm’s employment brand value.
10 Plan for the future
Reallocate jobs and responsibilities among the remaining workforce and reorganise work spaces to eliminate gaps where people used to work: plan for a fresh start. Communicate and consult with employees at all stages and pay particular attention to ensuring that line managers are fully involved in the change programme. Give positive messages focusing on the opportunities as well as the challenges ahead.
At times such as these, we need wisdom, humility and ethics to build a sustainable future for everyone. We cannot continue with business as usual. We need to become creative on how we engage our people to ensure organisational effectiveness.