James Godfrey outlines the strategies you need to pursue so you can attract, keep and motivate the right people, and get rid of those you no longer need.
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Take a deep breath and picture this.
It’s December 2009: You’ve survived another year, the pain is gone, imagine markets are heading in a positive direction, clients are happy, consumer confidence is back and people have a spring in their step. Business has been growing and Australia’s ageing population need advice. You are starting to feel under resourced and you think back12 months when there was an abundance of talent looking for work and you ask, “Where are they now?”
But in reality, it’s December 2008.
You can’t think strategically, you work week-by-week, day-by-day and task-by-task. You are drained. The holidays can’t come fast enough, but it doesn’t feel like Christmas. You are making reactive decisions, even though you have educated your clients on the long-term view. You must make some tough calls to survive, yet you want to be well positioned for the recovery.
One strategy that will build value in your business and deliver a positive return on investment (ROI) during this financial crisis is rebalancing your “people portfolio”, because talent markets are countercyclical:
- When it’s a bull market, talent availability is low and salaries are high
- When it’s a bear market talent availability is high and salaries are at fair value
{sidebar id=23} In today’s bear market it’s the perfect time to rebalance your “people portfolio”. Follow the five-step process below and start to see the returns.
1. Regroup:
Get into a positive mindset, accept market conditions for what they are, and use them as a catalyst for change. There is a surplus of talent out there that is more realistic and accepting of fair remuneration levels. Take emotion out of the tough decisions. We’ve all had underperforming employees who we like and care about. Good economic times allowed us to overlook their shortcomings, but it’s time to make some tough calls and to be commercial. Think about past staffing decisions, both positive and negative, and identify what you’ve learned, as you will need to draw on these lessons. Draw up a plan, and draw a line in the sand. Get human resources (HR) advice to make sure you understand your legal obligations. Execute this plan with integrity, care and honesty – transparent communication is imperative. Your brand and reputation can be destroyed if this process is handled poorly.ÂÂ
2. Review:
Ask yourself: “Does the quality of my people align with the vision for this business?” You need to make decisions on individuals and their roles. The only answers will be to release the person, retain the person or recruit someone new. Make sure you are operating within appropriate HR practices at all times.
3. Release:
This is never pleasant. Be clear, be honest and be direct. Be hard on the issues and soft on the person. Remember, the employee you let go is one day closer to being in an environment that better suits them. For you personally, it means that another decision that has been absorbing your attention has come to a head, and there is a little less weight on your shoulders. It’s amazing how quickly things clear strategic thinking can returns when these distractions are removed.
4. Retain:
When you decide to retain a talented employee, they need to be supported through a time of change and uncertainly. Again, clear, honest and regular communications are required. Employees need to understand and embrace the vision, understand where they fit, and know they have an important part to play in the future development of the business.
5. Recruit
This is the exciting part. You have the chance to attract some fresh talent into your firm. Draw on all of your hiring experience to make the right decisions. Look at engaging a specialist recruitment firm to assist in this process. New staff often gives the shift a business needs to get out of a rut.
The Result?
Return on human capital. Remember the “talent market” shifts as quickly as the share market. And it operates on opposite cycles, so don’t wait until December 2009. Start investing in the counter cycle now. Warren Buffet does.
James Godfrey is managing director of Godfrey Group.
