Pay attention to your people
Focus on your workforce in bad times. You’ll be better prepared for better times ahead
Regardless of sector or industry, today’s workforce has taken a beating: mass layoffs, hiring freezes, renegotiated union agreements, reduced pension fund financing, cuts in wages, bonus plans and benefits. You get the picture. Taken individually, any of these developments can have a serious impact on employees. Taken together, they can be devastating.
What does this mean for companies looking to restructure and rebound as the global economy begins to stabilize? For starters, this is one of the most significant human resource (HR) challenges we’ve seen in some time. Younger workers haven’t experienced a recession before and are unfamiliar with large-scale workforce reductions and other drastic measures. The potential for lost jobs creates distractions for employees, affecting productivity and service quality. Cost-reduction initiatives also take their toll on organizations and employees, creating further uncertainty. And when employees leave en masse, they take a tremendous amount of institutional knowledge with them.
These are all risky developments for companies that are starting to implement new growth strategies in the aftermath of the economic downturn. How can organizations boost morale and harness their workforce to get their recovery strategy off the ground? Drawing on the lessons of previous periods of economic recovery, here are four critical steps to getting your workforce back on track.
1. Rightsize with the right goals
In the face of imminent financial disaster, most organizations don’t think about the recovery. But your company’s ability to rebound hinges on the same fundamentals that make you successful in good times: quality products and services supported by a high level of customer service. Instead of pursuing widespread layoffs, approach your staffing needs as an exercise in rightsizing. How lean can you get without compromising service and quality? Once you determine how far you need to cut, make the necessary adjustments quickly to minimize disruption.
2. Protect the best talent
In turbulent times, some of your employees are likely to seek greener pastures, while others may be eliminated through rightsizing. That makes it even more important to identify your best employees early on and take steps to secure their commitment to your organization. If your company is one of the fortunate few that is financially strong, this may be an opportune time to attract top talent that was previously unavailable.
3. Build trust through greater transparency
The aftershocks of the downturn have shaken the loyalty of employees everywhere. One of the best ways to regain their trust is by fostering a more open and flexible culture. If you must downsize, do it as fairly and transparently as possible. People will remember how you handled difficult decisions, and it will put you in a better position to scale up during recovery mode. Conversely, if you cut costs or downsize without adequate communication, you’ll have a tough time attracting new talent when you need it. How can you maintain transparency and openness? Provide a complete picture of your company’s financial status and future investment plans. Be clear about how the company will help employees when restructuring occurs. These are simple ways to help everyone understand how financial decisions, even the tough ones, can benefit the company as a whole.
4. Put workforce planning to work
It may seem a long ways off, but sooner or later talent shortages will re-emerge as one of your most pressing issues. And the companies that come out on top will be those that embrace workforce planning as a core management practice. Apply workforce planning practices to your own organization: identify critical workforce segments, analyze available sources of talent and adopt strategies to mitigate future labour gaps. You should have a range of options for growing your workforce to meet future needs quickly, ranging from conservative to aggressive. These are just a few of the benefits workforce planning can bring to the table.
As you begin to roll out these and other workforce strategies, remember that it isn’t only about survival. Economic uncertainty, and the ensuing recovery, present a rare opportunity for you to implement HR best practices that can improve your competitive advantage. And that’s a smart move — no matter what the economic environment looks like.