Your HR recession survival plan

By Andrew Douglas

Recession preparation

The focus of businesses everywhere has changed from tentative growth to outright survival mode. But there are staffing mistakes that every company still needs to avoid.

How the world changes. Twelve months ago all the HR practitioners were mortgaging their children to keep employees; employee retention was everything.

Now, restructuring, redundancy and cost cutting are the words of the moment, causing dissatisfaction, uncertainty and a loss of employee loyalty. Nothing could be worse for production, quality and brand.

Recessions are driven by loss of customer confidence. The plunge in confidence becomes endemic, causing long term changes to our social and economic environment. What are the lessons for business, and are they being learnt?

Lessons

Is it best to have a graduated and secretive restructure process that causes incremental reduction in staff numbers?

No, this will damage production, quality and ultimately brand as your employees, beset by uncertainty, are distracted and uncommitted to your business. The death by a thousand cuts is a well worn but apposite phrase.

Instead, consider carefully which employees should be retained, design your business structure, develop a new and exciting vision and then cut deep once – being both honest and open about why. The remaining employees will thank you.

It is not true that retention issues have evaporated. On the contrary, the best employees are still hard to find and often go to ground during difficult financial times for reasons of personal financial safety. You must keep searching and investing in the best.

Isn’t it essential to cut all discretionary expenditure?

No it is not! This is a time to understand, identify and construct a business plan, addressing where your business will be in two years, and critically invest in people and capital items that will enhance the profitability, productivity and customer attraction to that product.

Customers in recession are more financially discerning, and there is pressure on price. Your job as an employer is to produce the best product to price for that segment of the market while maintaining margin.

Surely employees will work for next to nothing just to keep a job?

This is not true. This is the time to mould all those wayward generations into a solid and committed team. Treat them honestly with respect, and reward them appropriately, and you will be better placed than your competitors when the pall of financial gloom lifts.

Leaders that create vision, infrastructure and certainty for employees are rewarded with commitment, productivity and quality.

Recessions are terrifying, awful economic events. However like all situations involving change, opportunities arise.

The opportunity here is to steal a base on your competition and reposition your business with a committed team of employees. It requires courage, commitment, honesty – and still more courage.

Don’t keep restructuring secretively and denying the need for further change. Make the change you need to make immediately, and invest in your planned future.

Andrew Douglas, Douglas Workplace & Litigation Lawyers

Andrew Douglas

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