The Upside of a Down Economy for Employers
Cheer up, gang. In spite of the dire headlines all over the financial pages, there is a silver lining – unemployment is up!
Why is that good news? The rise in the number of pink slips means that the pool of available young workers is getting deeper. Hence, your application flow is up and costly employee turnover is down. In this wide scale economic crisis, entry level jobs for teens and front-line professionals are suddenly on the endangered species list – a scenario that hasn’t played out in several decades. And with all that business owners and operators have to worry about, filling positions and keeping them staffed is not as challenging as it was just several short months ago.
However, don’t assume that your staffing woes are now in your rearview mirror; at least not as long as you are counting on the performance and productivity of your people to keep you in business. In these turbulent times, it is your internal customers (employees) that will have the biggest impact on both the number—and the spending—of your external customers.
As important as front line personal is to their bottom line, in a contracted market, most businesses begin their budget-cuts by slashing payroll, meetings, training, and various other ‘employee expenses.’ While these line-items are easy targets, the thought process behind this always astounds me. Now is when organizations really need their people; and they need them to be performing at their very best, serving cheerfully, not fearfully.
The reason more millionaires are created during recessions than periods of prosperity is simple; wise investors snap-up great deals. (GE stock, for example, is worth $50 per share if it’s worth a nickel, and it’s currently trading at less than $15.) Similarly, while most businesses pull back on marketing, wise business leaders grow revenues and capture significant market share by snapping-up the recession-adjusted advertising rates their competitors are passing on, enabling them to win over new customers.
The same principles apply to human capital. As important as your market share is to your longevity, don’t overlook the comparative importance of your “employee share,” i.e. how you stack-up ‘talent wise’ within your industry. Are you in the locker room with your competitors waiting for the rain to stop and for the sun to start shining again, or are you actively leveraging this opportunity to upgrade and solidify your roster of talent?
Last week, the managing partner of a small boutique accounting firm told me that he hasn’t been able to recruit top young accountants in recent years because he was “getting trounced by the big four with the attractive offers they extend to top accounting grads.” Now some of those same firms are downsizing their recent hires, and he’s making some unbelievable talent acquisitions at a bargain price. When I asked him if he’d simply lose those people when the market corrects, he said, “Most will be with us for many years after they experience our culture from the inside.” He then added, “…and they won’t soon forget how quickly they were cast out by their former employers when the chips were down.”
Another client revealed that because of the economic slowdown, his company’s upper management had not only decided against giving employees a Thanksgiving turkey—a tradition the company had practiced for twenty-three years—but that they had also decided to cancel the annual company Christmas party. You think their front-line employees are really going all out to bring in new sales, avoid excessive waste, and provide excellent customer service? Cutting staff is one thing, but cancel a party and your Gen Whys are going to rebel!
Look, I’m not an idiot. Tough times call for tough measures and you’ve got to find ways to bring your budget in alignment with sales. As they say, there’s no profit in overhead. But if you tamper with your “employee share” without first exhausting every other conceivable cost-saving measure, it’s going to come back to haunt you.
Here are a couple items to thoughtfully consider as the year draws to a close with the economy in contraction:
Build your employee brand – Never before has a generation of workers been more connected. Face it; your young employees are online at this very moment, telling their peers all about their current employment experience. Your reputation as a millennial-friendly employer is being forged right now on the social networks of Facebook, MySpace, etc. If you’re treating your Gen Whys better than your competitors, you, too, can make some unbelievable talent acquisitions at a bargain price. And if Generation Y is a cohort you want to attract as customers, be doubly careful how you treat them as employees!
During dead periods, train for gain – On slow days, don’t send ‘em home; train ‘em like crazy! Now is when you can ramp-up all elements of your operation and enhance your service experience. You can reinforce all those lessons you’ve been wanting to teach them, but couldn’t because you/they were too busy to train. Remember, it’s what you do in the slow times that determines how long the slow times will last, and how quickly you’ll rebound when business improves.
Never let ‘em see you sweat – You may recall this tagline from an 80’s deodorant commercial, but the words ring true for leaders in today’s economic climate. If you appear visibly stressed by a drop in your revenues, your reports are going to catch your state-of-panic and lose their focus. Stay positive and remind your face to smile. Be cool, calm, and confident and never doubt the value proposition of your brand and your products. Many of your young employees may be nervous about losing their job, but don’t be fooled into believing that fear motivation is your friend. No one performs at their peak under duress.
Like it says in the good book, “This too shall pass.” We’re going to hit the bottom in the coming months and we’ll recover. The labor market will also correct and young talent will soon again be in very short supply. They’re going to remember who had their back during this storm, and who didn’t. So take full advantage of the current market conditions to set yourself apart from the crowd. Your eventual ROI will keep you on top for a long, long time.
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Whys
Cracks
Cowabunga, Dude! Police officers in Clifton, N.J., were suspicious of two men dressed in black parked in a car at 2:30a.m. The men explained they were "modern-day Ninjas" -- "Shinobi Warriors" who were merely delivering letters to local drug dealers to demand they stop their "impure" activities. If not, the "Shinobi will stop your cruel and sadistic intentions with justified, yet merciful force." The letters indicated that “the wind guides us to those of impure heart and intent," which includes drug dealers for having "committed the sin of passing impurity." Officers say Jesse Trojaniak, 19, and Tadieusz Tertkiewicz, 20, were carrying sheathed knives, Ninja throwing knives, Chinese throwing stars, four-pointed tacks, swords, bows and arrows, and nunchucks. Not surprisingly, police arrested both men on weapons charges. Tertkiewicz was also charged with harassment -- for allegedly already delivering one of the letters to his 16-year-old ex-girlfriend. (Clifton Journal)
Reality calling Jesse and Tad, “Turn off your Xbox, drop your remote, and back away from the screen. It’s just a game. You can’t really do that stuff in real life.”
Whys
Blog
Check out Eric's latest blog - always insightful and inspiring; sometimes humorous. Read it here.
 Have a wonderful, blessed Thanksgiving holiday! |
In
This Issue:
Resources:
The best way to predict the future is to create it. |
Peter Drucker |
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People want economy and they'll pay almost any price to get it.
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Lee Iacocca |
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I favor the policy of economy, not because I wish to save money, but because I wish to save people. The men and women of this country who toil are the ones who bear the cost of the Government. Every dollar that we carelessly waste means that their life will be so much the more meager. Every dollar that we prudently save means that their life will be so much the more abundant. Economy is idealism in its most practical form.
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Calvin Coolidge |
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The government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.
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Ronald Reagan |
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There’s only two ways to grow your business. Grow yourself or grow your people.
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Mark Sanborn, Author, The Encore Effect
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Put not your trust in money, but put your money in trust. |
Oliver Wendell Holmes |
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The only thing money gives you is the freedom of not worrying about money. |
Johnny Carson |
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I hope that after I die, people will say of me: “That guy sure owed me a lot of money.” |
Jack Handey, Author, Deep Thoughts |
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Whys Advice of the Month
Career Advice for Young Professionals
Renowned management guru and leadership coach Marshall Goldsmith, PhD, columnist for Harvard Business Online, asked me what advice I would offer twenty-something professionals during these turbulent times. Here’s my four-point strategy.
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Dallas, TX |
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St. Petersburg, FL |
January 23-25 |
Washington, DC |
January 26 |
Cheyenne, WY |
January 31 |
Louisville, KY |
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