Don't Cut the Muscle (Part three of a five-part series
on Managing Talent through the Downturn)
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Most organizations are going through a serious retrenching process right
now. In the frenzy to cut costs, however, leaders must be very careful. Pull
back production to match diminished demand, but don't damage your productive
capacity. Require a healthy return on every expenditure, but don't stop
investing.
DOWNSIZE SURGICALLY
If you must downsize, cut the low performers, not those with the least
seniority. Even if you are dissolving entire business units, identify and
reassign the hardest, fastest, and smartest workers---and those with
critical skills. Eliminate tasks and projects that add little to the bottom
line, but don't dismiss the individuals responsible for that work without
first evaluating them. If they are high performers, reassign them to
managers who are understaffed.
KEEP RECRUITING
Meanwhile, slow down your hiring process, but don't stop recruiting. Use the
downturn to attract a large applicant pool and use the selection process to
keep the supply chain full. Instead of selecting applicants into slots on
your organization chart, select them into your proprietary talent database.
And tell them so: "We want to have a long-term win-win employment
relationship with you. We've selected you into our talent pool. We'll call
you when we need you. If you are available when we call, we'll have a great
assignment for you… maybe more." As you build your proprietary talent
database, include great independent contractors, temps, and outside
companies to which you can outsource work on an as-needed basis.
STRENGTHEN YOUR CORE GROUP
Now is the time to redouble your efforts to retain your best talent at every
level. You will be asking more from your high performers than ever before.
In exchange, you must offer more---more flexible schedules, skill
development opportunities, exposure to decision-makers, responsibility,
creative freedom, and money.
MORE MONEY?
With the lull in salary bidding, you have a tremendous opportunity to set
your organization apart: Pay people more, reduce compensation costs, and
drive productivity. How? Put a moratorium on salary increases. Offer
increased compensation to every person, but in the form of bonuses directly
tied to concrete productivity targets (specific goals with clear parameters
and firm deadlines). For the truly ambitious, offer salary decreases,
accompanied by even larger performance-based bonus opportunities. And with
new hires, offer greater compensation opportunities than other employers,
but shift the balance so that contingent pay is more than half of the total
available pay.
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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
Mark Kurber via phone (203.772.2002 x110) or
email.
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