As a small business owner for the past 14 years, I've seen my share of ups and downs in the economy. It's a challenge for business owners to know what to do to ride out the wave of a recession. As the CEO of Insight Performance, a human resources consulting firm, I've been receiving a lot of requests from clients who are trying to figure out the most effective ways to manage staffing during this time. Based on experiences from my own business and insights from dozens of companies, here are some best practices I've been recommending for addressing staffing issues during tough economic times:
Make sure you take the long view. To add to Benjamin Franklin's famous line that all we can count on is death and taxes, there is one other certainty: change. Economic downturns are followed by times of prosperity and vice versa. Too often companies take the short term view and react to a recession by cutting top talent, only to find that they're behind the competition once the market starts to rev up. To better deal with the inevitable ups and downs of business, I've changed my outlook and instead of strategically planning my business needs from quarter to quarter, I'm now looking one year ahead.
Align HR with your business goals. Where is your business heading? What people resources do you need to get there? Determine the key skills and expertise that you need to have on board to get you to the next stage. Then look around at the seats at the table within your own company. Do certain employees have the skills you need, or do they have the potential to develop them? Put together a game plan that includes development and training and outside hires to help get you where you want to go. I know I mentioned the "H" word, but contrary to popular belief there may be times when you want to hire during a recession, even if you are cutting other positions. The key focus here is having the right people on board to help you achieve your business goals.
Remember to always treat your employees well. Employees are the ambassadors of your organization, and help you grow your business. As you can imagine, your employees are probably feeling uncertain about the economy and worried about job security. Make sure you continue to value and recognize their contributions and create the type of environment that makes them want to stay. Creating an outstanding workplace with respect and work/life flexibility will go a long way in engendering loyalty and happy employees even when you're unable to provide the kind of raises you would like to offer.
Be creative about staffing. Consider ways that you can cost effectively meet your staffing needs. Could you expand the role of a junior person who's ready to take on more? Can you add hourly employees? One of the most effective new ideas we've recently implemented at Insight Performance is a peer management program in which employees within the organization are reporting to and being managed by their peers. In addition to reducing the costs of a mid-management layer, this program has helped employees feel more empowered and responsible to each other. It has also encouraged greater communication and collaboration among the internal teams.
While there's no magic bullet for handling staffing issues during a recession, it's important to keep your eye on the game. But while you are working to stay afloat today, don't be afraid to look ahead to where you want to go and to position yourself competitively for the months ahead.