How to Manage Employees in a Recession
Whether or not a small business will survive a recession, or come out of one even stronger, could be dependent on how its employees are managed, according to some business advice from a couple of recent Fortune magazine articles. Experts offer their opinions about hiring, firing, compensating, training, and communicating with employees during these tough times.
To hire or fire? Well, both, according to Fortune’s Geoff Colvin, who says now’s the time businesses should look to weed out their worst performers and steal talent from competitors by offering more attractive packages at a time when other companies might be cutting back on compensation. Management guru Jim Collins, interviewed by Fortune’s Jennifer Reingold, agrees. He says now is the time to search for talent wherever you can find it, possibly in the pool of recently laid-off employees; you should create the wherewithal to afford it, because “if you do not find a way to get those great people, you’re not thinking long-term enough.” Collins also recommends choosing talented employees that don’t need to be tightly managed, and who don’t blame external forces in bad times.
What about cutting salaries? It might be necessary to do this in a recession, but Colvin advises against cutting salaries across the board in an effort to be fair to all employees. Your best performers, he says, should always feel that they are being compensated for the good work they do or they could choose to go to work elsewhere. In fact, you should be on the lookout for good employees who have recently seen a pay cut, because this could be your opportunity to swoop in and steal some talent.
How about cutting back on training my employees? Colvin says, “The best never do….yet it’s remarkable how many businesses cut training and development in a downturn.” In particular, customer service is an area where small businesses can always excel and compete with larger companies, so it would be advisable to emphasize customer service as part of an employee development program these days.
What should I tell my employees? The truth! Colvin says to be honest and direct and communicate like crazy. Anxious employees will worry more if you are silent, so you need to let them know how the company is doing and communicate regularly with a balance of realism and optimism. Don’t hesitate to reveal bad news but always look for ways to keep hope alive.
