When the Going Gets Tough...Get Your Staff Involved!
It's true what they say...
Any organisation's single biggest asset is its people. What's also true is that same asset usually represents the single biggest cost. So, it's no surprise that when hard times hit, many companies (sadly) look to reduce headcount, almost as a first step. But can this be avoided?
Get your team involved!
No one likes the pressure in tough times but, in fact, from our experience this is exactly the time when the most innovative, out-of-the-box solutions are created. Get your team involved in workshops and groups, and challenge them to come up with 10, 20 or even 50 suggestions that could realise immediate cost savings. Sure, not every one will be a winner, but the rule of thumb is that each person typically presents at least one real gem of an idea.
Manage Performance!
A strong performance management process, coupled with a commitment to developing the skills of your staff, should ensure that you only ever have competent, reliable employees. It seems so simple, but you'd be surprised how many companies only ever consider addressing poor performance when business is tight. Why is that?
As an employer, you're entitled to demand performance from your team regardless of the external factors! In fact, there are few things that can dampen the enthusiasm and energy of a high performance unit more than having to share a workplace with someone who isn't pulling their weight. To be honest, many welcome interventions by management to address poor performance. There are very real and significant costs of continuing to support an under-performer. Salary, infrastructure, lost opportunities and inefficiencies are only the tip of the iceberg.
Investigate Alternatives
Nowadays there are so many more alternatives to the traditional employment model of old. Investigate which of these options could work for your business. Things like job-sharing, short weeks/fortnights, contract workers, fixed-term employees and part-time employment are all perfectly acceptable forms of securing human resources. These are becoming increasingly more popular as workers demand flexibility and choice, and employers look to unburden themselves of some of the costs and obligations of employment.
If you aren't able to give salary increases, consider salary packaging some items. Used efficiently, salary packaging may allow you to positively impact nett salaries without incurring additional gross wage costs.
When there are no other choices
Sadly, sometimes despite every effort being made, there really is no alternative but to reduce headcount. If this happens, make it as dignified and painless as possible, and cut only where it is absolutely necessary. Remember that it costs 2.5 times the annual salary to re-employ into a vacant position. Where possible, engage the services of a business that offers outplacement consultations to help people through the difficult process and to assist them in re-entering the job market. This may include professional resume preparation, interview assistance and skills training. Above all, be honest, transparent and show empathy throughout. Although feelings will unavoidably be hurt, be as supportive and understanding as you can. Remember, too, the tide will turn and you will be employing staff again in the future, and who better than those that already have knowledge of your operations and systems? If you allow them to depart with dignity and care, then you may be able to re-employ them back later.
Marketing and Sales
Make sure that you are exploiting every inch of your marketing and sales power. This is often a time to invest extra spend in marketing to attract new clients or users. While your competitors move into conservation mode, take advantage of reduced rates on offer for advertising space and start shouting from the rooftops! Find other companies in your immediate area that have synergistic offerings, and consider sharing the costs of a promotional activity. Get your brand out there in the public awareness.
Above all make sure that you are geared to survive the downturn and flourish in the upswing by being above reproach in all your staff and business dealings. Good Luck!
John Glover, Director - PendragonGWP Magazine Issue #25, July-August 2009
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