Humans are superstitious by nature, so it's not surprising that most of us are constantly on the lookout for omens in business. When we see a decreasing frequency in IPOs, or a decline in corporate valuations, we start to wonder: Is this the downturn? Will the economy slow? Maybe. Maybe not. But one thing I have found while managing through economic slowdowns and downturns is that they have their silver linings, particularly when it comes to finding and retaining quality talent.
We know that an increasing number of employees remain open to a new job--despite being satisfied in their current one. Even when the market seems uncertain, there's still a goldmine of talent to tap into. You must take advantage. Here are four productive actions to take if things start to slow down:
Upgrade your talent. No one wants to ponder the consequences of a lengthy economic downturn. But remember this: When candidates begin to get concerned about job prospects, it's always a good time to hire.
If you're a startup, then it's an optimal time to grab young, skilled workers eager for a shot at the ground floor of something new--because job openings aren't as plentiful, and most of the larger companies can't compete with the innovative perks and opportunity that startups will always have in their arsenals. But it's also a good time for big businesses to hire. Experienced workers who are more interested in stability and benefits will want the proven security that can only come from a company that has weathered a storm or two and still come out strong. Bottom line: If the market looks like it's slowing down, then start thinking about what skills you need to strengthen your products and services--so you can come out swinging when things pick up again.
Invest in your employees. If a possible slowdown indicates a good time to hire, it most definitely indicates a need to hang on to your current employees as well. How do you do that? By investing in their future potential.
Granted, ordinarily, that's not always a wise move. In a hot market, most workers are only going to stay at a company around three to four years--so any money you put into training and coaching isn't likely to pay off fully before people move on. But when the economic pendulum shifts, job opportunities will be limited, and your employees are going to be staying longer. This is your opportunity to see a return on your training investment. Think about how you can promote employee learning, or train people to beef up their skill sets, so they can perform their jobs better or even move into different jobs. The more you demonstrate a commitment to employee growth, the more likely you are to retain good workers even when the market improves.
Demonstrate confidence through experience. If you have ever been on an airplane that has had mechanical issues mid-flight, then you know how important leadership is in a crisis. Experienced travelers know that you can quickly gauge the severity of the problem you're facing just by looking at your flight crew. If the flight attendants don't seem worried, and the captain looks fine, then you're going to remain calm. But if any of them start whispering, or walking fast up and down the aisle--well, passengers begin to worry, and almost always unnecessarily. The lesson here is that in moments like this people look to their leaders for reassurance. Give it to them.
It's your job as a leader to relay your experience and be confident in front of your team. Remind people of the times you've ridden out a recession. Tell them the upturn isn't just inevitable--it's imminent. And that means you have to be prepared to come out on top. Everyone needs to stay focused. Help teams rearrange priorities to keep things in order, and articulate your plans in way that instills calm and confidence. There's no need to be nervous; economic cycles are the normal course of life and business.
Fix what needs fixing. Once you've given consideration to how to augment your workforce and amplify your bench strength--and you've reassured people that the next period of rapid growth isn't far down the road--you're ready to take advantage of the slower-paced market. Take some deep breaths, and look at what you might have done too quickly when competition was fierce and time wasn't on your side. Maybe you scrambled to write code and get a product out the door, and now you have a chance to go back and refactor it. Or maybe you rushed a go-to-market plan, and now you have an opportunity to re-configure your salesforce more efficiently. Use downturns to optimize the resources you have and create scalable processes that can and will be ready to succeed when the next upturn arrives.
Overall, when we emerge from a period of frenetic growth, it's natural to think about what it means economically and prepare for what comes next. But rather than turn into deer in headlights, expecting the worst, leaders and executive teams need to capitalize on the opportunities these slowdowns bring. Adopt a "buy low, sell high" mentality, where you acquire the best talent and tools during the breathing periods, and not when hiring and corporate valuations are at their peak. And when the pace picks up again--as you know it will--you'll be better positioned to compete.