Recruitment - Freeze or keep recruiting?
It is a well known and documented fact of business life that when a downturn hits, whether just in the organisation or within the broader economy, most companies first thought will be of cost-cutting.
Of course a truly lean organisation will always be operating at optimum level but the reality is that most organisation have a degree of “slack” – some more than other!!
Interestingly too people resources are among the first to be attacked. But is this a smart move? Generally, economic downturns are short-lived so keep the bigger picture of long-term growth in sight. Keep your nerve. It's easier to invest training time for new recruits during slower growth periods. It's also worth remembering that if you dismiss employees during a recession, not only is there a cost, you will have to appoint someone to take their places when times get better - and that can cost a lot more money in the long run.
Recruitment during a recession is a strategic move. Recession is seen by several companies as an opportunity to be almost at level with those who already had an edge over them during normal times. The budget cuts and layoffs implemented by competitors may work to the advantage of companies which made the unusual move of recruiting for the best there is during bad times.
Of course, prior to any strategic move, there should be a careful analysis of the business situation and relative aspects like suppliers, prospects for new products, adjustments needed and where to focus your efforts during the hard times. Only then can you identify the type of recruits you will need.
This might seem like odd advice...the words of a consultant who doesn’t really understand. Not so! This is a strategy employed by numerous successful companies in the past, not least of which is Hewlett Packard.
Retention - Who and how?
People are your business. I will say that again! People are your business. Without people resources you cannot operate your business and you certainly can’t have a successful business. So having and retaining the right people is crucial. If yours is a high performance organisation then you will not have any “dead weight”, any poor performers. You will have a very robust and well implemented performance management system. Do you? If not, now is the time.
But let’s think about your average and high performers. They are vital to your business. You have invested heavily in them. (Did you know that the average cost of hire for a new employee is one years’ salary for someone on an average wage?) So retaining them is very much in your best interests. Two issues arise here.
Firstly you may believe that you cannot continue to employ them all. But is redundancy the best solution. Have you considered other options been employed by the various larger companies?
For example, reduced working weeks or reduced hours for all, pay cuts, moratorium on increases or bonuses, unpaid career breaks or sabbaticals, short term unpaid leave or term time type arrangements, etc. And have you talked to your employees?
Be honest with employees about difficult times. Let them know how you're doing so that they understand the true financial picture. Remember you trust them to make your product or deliver your service so you should be able to trust them with information that will affect their futures.
The second issue really is ensuring that those people you have invested so much in and who are vital to you and your business continue to want to stay in your employment. Recognise that this time is as difficult for them as it is for you. Involve them. Consult with them. Continue to show them they are valued through training, autonomy and acknowledgement.
Redundancy - If you are going to do it – do it right!
If you have decided that redundancies are required then please ensure that you do it by the book. If you are unsure of the process, get advice or assistance. Just because there's a recession it doesn't mean that employment law stops developing.
Make sure that your employees know in advance what is happening and preferably explore other options with them. You might be surprised at how flexible your people can be. Once you have decided to go ahead the issue of selection for redundancy arises. A word of warning here – you can’t just select people because they are underperformers. If you have these people you should be handling their exit through another process – usually a Disciplinary one.
And if possible, provide some assistance to help your people move on to other jobs. Outplacement services provide assistance with CV writing and interview preparation as well as discussing options for the future.
So there you have the essentials of managing your people in a recession – the key elements of Realignment, Recruitment, Retention and Redundancy. So remember:
Look carefully at your business and make strategic decisions.
Redeploy and re-skill wherever possible
Don’t be afraid to keep recruiting if it makes sense to your business
Retain your people - continue to train, up-skill and empower your people
If redundancy becomes a fact of life, ensure you have valid reasoning, consult early and put the correct procedures in place.
Show your employees you care
Source:
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