Saturday, January 3, 2009

Refreshing Talent!

While we are in the midst of this current global economic downturn, the band still has to play on. The show must go on and, in this time, it can become very easy--even obvious because of how hectic things can become in managing your business-- to neglect critical "must do" things to maintain a sound and effective operation.

This is not an endemic curse on just private businesses, as Government's too are feeling the pressure on understanding what exactly must we do, now, to avoid a total collapse-- UBS and Ecuador in particular, are two entities of note that are struggling with managing the changes brought on by the challenges of this global economic crisis.

But, what "aren't" they doing, in the attempt to not only make due with what they are faced with now, but also, how do they implement "right now" policies, which may negatively affect long term viability and sacrifice future profits and growth, without doing just that?

It too -on the opposite side of the psychological reaction- can be very easy and tempting for hot shot managers and CEO's, to galumph towards building elaborate savings schemes around the refining of their operations and supply chains at the same overruling the practical objections of the finance director--who, at times of crisis, is always disregarded as a naysayer and someone, who does "not see the full potential of new age technology serving our cost cutting purposes". While it may be true, but, if the CFO is telling you that you don't have the money for even this week's salaries or utilities, then, by all means, understand that cost cutting does in fact have a cost--external and internal.

There are countless examples of organizations that sacrificed sales and marketing teams and end up putting focus on the reliance of their higher paying and more reliable customers, neglecting any form of relations with the prospective market. There are also countless examples, of organizations that cut down on unnecessary spending in utilities--electricity, telephone and now, going green and becoming fully computerized in the attempt to save money on stationary-- and lose sight of how to be progressive about doing what people actually pay you to do. People don't buy your products and services, because you can save $10 bucks a month on the heating bill. People also don't buy your products and services, if you don't go out there and attract them to the goods and services you have. Especially in a competitive market, focusing on word of mouth for your business--while it is a good approach--would leave you second best, all the time, to the person, who goes out and gets his customers.

To bring cost cutting closer to your staff, some organizations have forgone commissions and have cut back on hiring incentives. Slashing wages and allowing the market to do the other side of the slashing of wages for them. But, while it too can be said that a janitor does not need to make $80k a year, demoralizing your team, or, looking unattractive to prospective team members, can have disastrous consequences for an organization. Evaluating and then refreshing your talent about why do you have them there in that job in the first place, while at the same time, revaluing the roles they play currently, can be a better, over all solution, to slash and burn cost cutting techniques on staff.

Needless to say, some organizations have decided to cut staff at this down turn. This is a first and most obvious response in regards to managing human resources in times of financial difficulty. Other organizations have put in place hiring freezes. But, not only is the former policy, cold and to the point, but, in many instances, necessary if the company, for example, has three janitors making a total of $200k per year in the peak of the business cycle on a regular 9-5 hour week, where they would, now, only need two for $50k per year in the current slow season at a 9-5 work week. The latter, can be more of a strategic blunder by organizations--worse if they are to cut staff, while not replacing it with new, top and better talent, while at the same time, losing key individuals who are, at least we would hope so, knowledgeable about your business and the industry they represent at large.

While the example of the janitor making over $80k per year is a very crude one, this approach is taken to staff layoffs across the board and at disastrous results.

Often times, when you cut staff in a very high demand session of the labour market-- more persons laid off, increases the supply in labour and, effectively, puts more folks out there looking for opportunities for new employment-- you can easily push top talent, into the hands of your competitor at a much lower wage. The hand that helped you last month, can easily turn out to be the hand that puts the nail in your business casket in the next. One has to be very careful and manoeuvre lubriciously, when put in a position where you can send key talent to your competitor.

How do you treat staff at a time like this? Well, evaluation of your roles and talent and as a subsequence, refreshing your talent base, should be a priority for business and government.

Get it back to basics!

Getting it back to basics, does not mean however, does not mean scaling down and focusing your goods and services on your core, established market, entirely. But, get your team back to understanding what it is we are doing out here, in the first place--providing key and essential (if you may say so yourself) goods and services.

Not only would you use this time to have an extensive training and re-training of old and new staff--with the older staff, more than likely, administering the training at a very low impact time in the business cycle--but also, you cross train older talent into new roles, while at the same time, streamlining operations to fit the new lower demand. It will only help your organization, if you have a well diverse cross trained, team approach to operations.

If there must be a staff lay-off however, then, by all means, replace your old business model structure with a better more responsive organizational structure based on human resource flexibility. In other words - as business cycle busts are unpredictable at many times- make sure moving forward that your organization and your staff are recession proof.

In saying that, here are some key insights into making your operations better for human resource flexibility.

1. Re-create the short term consultancy package. Three to six month hiring positions are more competitive in a down turn than it is to bring on a full time person, with the idea of tenure in their mind. Long term contracts in a time of uncertainty, after you have laid off staff, is a no win for firms. For one reason, you lock in talent, especially if they were to go through the rigors of the government vetting process- who may at interview time, look employable. But, after you bought it, you own it.

Long term contracts are harder to negotiate and take longer to implement on the job at the same time, having the negotiation process take time away from your human resources training schemes, which should continue regardless, while also at the same time, taking up unnecessary time frames trying to lock in talent you have no idea of how their performance would be, after they are hired.

This gives the impetus to evaluating which roles can be put on shorter term basis, lowering long term labour cost and, at the same time, incentivizing staff to make it on to the full team. Also, at the same time, re-energizing a team in need of new ideas and incentivizing new staff into working for a permament spot on the team.

2. This is also not a bad time to offer stipend based sabbaticals, at half or even a quarter of the salaried price, to persons who have the resources to seek training at a time like this. Communications advancements, twitter, messenger and even Microsoft Office Groove, can make long distance sabbaticals a non factor if your employee can handle simple consultancy roles from their new location.

This would give your firm, post certification or leave, the critical outlooks in regards to diversity on your team. New and freshly lit brain matter, is key to getting an all around edge after the storm is over. The idea is to not let the economic woes, cripple your organization, to the extent where your slump is protracted and isoltaed to your firm, through lack of skilled and well rounded talent. This would also build up your team member's resolve, at the same time, building your entire team's resolve through assisting your employee with managing their personal difficult period--believe you me, it is bad for the employee's as well as businesses tend to forget that- and for that to be used on the job as a shared experience for all parties to take stock of.

With this, ultimately, you would cut salaries, and, more than likely, get a better and more equipped team member and overall team. While it would be a danger that the person will have more time to look for a better job. In a time like this, it is more than unlikely that they would--even though employers look for employed persons to poach off of other firms. But, at the same time, a freshly laid off worker, is more valuable than a person looking to double dip or hop the fence--as said earlier in this article, the new employer will gain a valuable employee who knows the industry, one that you mistakingly gave away to your competitor for half the price.

3. Take the full team approach to sales, customer service and business development. With the acknowledgement of a team leader or project manager with the last word, this is a time to use a full office approach to business development, sales and marketing. Give your customers the full experience, which will in turn build a stronger client relationship at the same time giving your ongoing cross training the practical experience it needs at low impact times.

With this third approach, I must warn you that having an identifiable project lead, promoted at the onset, would give the customer a feeling of satisfaction through the security that all of their consultations with other team members, are going to be implemented at the mere unilateral direction of a top, decision making person while at the same time, giving the appearance that their needs are being given full coverage and showing that your organization, has competent and professional peolle, at all levels, willing to work with them each step of the way.

4. Train, Train and Train some more. It can't hurt. Half of the successes in the battle is not winning, but it is the preparation for the next step--win, lose or draw. Once their is life there is opportunity. Training will not be wasted on the persons who receive it. Also, a good and trained staff at the organizations request and option, will build an organizations reputation as a company that takes care of it's employee's. It will work tremendously in building your organizations brand. After all, people do work in order to make their life's lot a little better.

In fact, if you offer training, team members, would evaluate themselves. The one's who can't or refuse to cut the old or new idea's of the business model, will be shown up at a time like this and make the personal choice of letting one go, less painful--they can't cut it and you know they can't cut it, so, why stay?

While your organizations CFO would be the first to ask you to please pull your head out of the clouds on daydream initiatives. It is your duty as a CEO or operations manager, to understand that the finance director has his role and that role is not based in managing employee's and evaluating talent. Such ubiquitously dreadful professional hubris, should be anathema at a time like this.

While the idea of a credit crisis, may sound like the finance directors problem. Fact of the matter is, the last person you need beating the truth into you, again and again and again, is a cocksure CFO on all money matters and one that's more than sure that the credit crisis was made entirely for him to solve, and solve alone, rather than you running your organization and obtaining critical, long term profit driven results.

If your company has made a single dollar in profit this time around compared to making $100 million the year before, or, even if your organization has adequate capital buffer's or surplus savings from previous years, it is critical that you understand the role your talent pool played in making each and every success and the role they will play in making your organization will be stronger at the end of it all.

Getting your team back to the basics, while anchoring them on core principles while taking streamlined approaches to delivering results, should be on the agenda at your next managers meeting.
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