Managing Talent through the Downturn
(Part one of a five-part series)
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Do not try to wait out the current economic downturn. Use it to finish the
business revolution that's been underway for more than a decade: Get leaner,
but not meaner. Strengthen your core group. Become super-flexible. Get more
work and better work out of fewer people. The decisions you make and the
actions you take in the coming months will shape your business for years to
come. Make the right moves now and come out of the downturn healthy and
ready to seize new market opportunities as soon as they arise.
BAD VS. GOOD DOWNSIZING
Not all downsizings are created equal. Often corporate leaders announce
layoffs with great fanfare to please the investment community. Wall Street
likes pink slips because labor is one of the biggest variable costs in most
companies. But human talent is a strategic asset that must be allocated with
great care, and treating human beings as line items on the budget that can
simply be cut to improve the earnings report for one quarter is bad
business. And that is what I call bad downsizing.
There are, however, at least three very good business reasons for downsizing:
1. To move out of a market sector that is cooling off and into a market sector that is heating up. Often this requires cutting people with one set of skills in order to hire people with a very different skill-set.
2. After implementing new technologies that increase efficiency. Often these new technologies replace work done by employees with work done by machines---around the clock, error free, and at a pace that is often thousands of times faster.
3. Following the formation of a new business combination, such as a merger of two companies. While companies typically merge so that they can match up different strengths, there will always be market segments in which both companies were competing prior to the merger. Operations should be streamlined in those shared market segments. Even more aggressively, the merged company will seek to streamline administrative functions. Where there are overlapping roles, the goal will be to identify the best person from either company and eliminate the "extra" person.
In each of these cases, leaders and managers must stop and think before
eliminating people from the payroll. Remember how you've been scrambling
every day for the last five years to recruit and retain enough skilled
talent to get all the work done every day in your organization. Every
employee carries with him or her your training investment, valuable
experience, and relationships with other employees as well as vendors and
customers. Retaining those assets through worker retraining and
reallocation is a better move than downsizing with one hand today and
recruiting with the other hand tomorrow.
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Managing Talent through the Downturn |
For a limited time only (we hope),
Bruce Tulgan is offering a special presentation addressing workplace
issues in the current economic downturn. For more information, see our
Web site at
http://www.rainmakerthinking.com/downturn.htm, or contact
Jeff Coombs via phone (203.772.2002 x104) or
email.
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