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How to Bolster Your Staff During a Soft Economy
By Kristin Knight 4.24.2001 How quickly things change. Twelve months ago, many companies, particularly high-tech companies, were scrounging to fill positions. It was a buyer’s market, with employees calling the shots and many positions going unfilled or staffed with talent that was, perhaps, a little green around the ears. Today with a cooling economy affecting virtually every sector, many companies are feeling the economic pressure to let people go. But does a slowing economy mean businesses should stop hiring? Or can a business use the slow economy as an opportunity to increase its talent level? And if you must layoff workers, who goes and who stays? These are just some of the questions businesses must answer as the downturn continues. Here are a few suggestions. 1. Layoff only as a last resort. During downturns, the inclination is to let people go. Unless you have absolutely no choice, lay off workers only as a last resort. With every walking employee goes a little bit of company knowledge and a little bit of your company’s morale. And when the downturn ends, as it surely will, you’ll be burdened with the cost of rehiring and retraining workers. Plus, there’s no guarantee you’ll be lucky enough to hire back employees with equal talent. Strive to hold on to your employees now, and when the economy reengages you’ll be in a prime position to take advantage of new business instead of scrambling for employees to fill key positions. 2. Use layoffs to strengthen the quality of your staff. If you absolutely must lay off workers, use the opportunity to retain the best and the brightest you have, even if they are the highest salaried workers. A productive and talented employee is always of greater value than a modestly productive employee at a lower salary level. It doesn’t help your reputation among clients and customers if your sales reps or customer service people are here one day and gone the next. So if layoffs are inevitable, consolidate back-office positions first and strive to retain “customer-facing” personnel. There’s no doubt that morale will take a hit after a round of layoffs. The tendency is to placate remaining workers with assurances, but be careful not to make promises you can’t keep, as nothing is worse than for morale than a broken promise. One way to counter lowered morale is to introduce a new round of training. This shows employees that you’re committed and willing to invest in their careers. 3. Hire contract and temp workers. If you need to hire people but you’re fearful of bringing someone on full-time, consider hiring on a per-project or temporary basis. This popular method has a number of advantages. You can tie employee costs directly to a project budget so that when the project ends so does the cost of the additional worker. Our firm, Creative Assets, specializes in placing graphic artists, web designers, writers and other “creatives,” and our clients are increasingly hiring on a per-project basis to keep down costs. We conduct a thorough and structured review of each portfolio; check all references, and test for software proficiency and other skills, when appropriate. Most importantly, we have a good idea of the type of environment that best suits each candidate. Most placement agencies that specialize in specific industries provide the same in-depth screening. Hiring on a “per-project” basis also allows you to try out an employee for a length of time. If the employee turns out to be talented, motivated, and a great fit for your company, you can offer him or her a full time job. If not, than there are no strings attached, and no severance packages or unemployment payments to worry about. 4. Recruit actively. Now is the best time in years to attract the kind of talent that might have been unimaginable just a few months ago. Even if you’re not in a position to hire right now, it’s a great time to arrange for informational interviews and begin building relationships with people you may want to hire down the road. The question then becomes how do you find the best talent available? As always, there are several choices. Current employees are a great resource of referrals but often yield only a small number of candidates. You can broaden the pool by using Internet posting boards and newspaper classifieds (not an inexpensive method). But wading through scores of resumes, checking references, conducting proficiency tests, and interviewing candidates for that all-important and elusive cultural fit can be a time-consuming process. Another option is to hand the process over to a general placement firm with hopes they understand the needs and requirements of your marketplace as they fill hundreds of job titles in addition to the ones that interest you. For these reasons, many companies regularly entrust their search to a “niche” placement agency that specializes in talent in their industry. A successful niche agency will spend hours with each candidate, helping him or her clarify goals and compensation requirements. And a good niche placement firm will invest the time it takes to understand your culture and unique work environment, as well. Once you’ve built a relationship, the placement firm is constantly looking out for talent that’s right for you. Good creative placement agencies make their living by having their ear to the ground in local markets, constantly talking with professionals and employers. All this legwork leads to long-term relationships with top talent. Hence, agencies possess the most valuable information of all -- who’s looking for a particular situation but not necessarily applying. These “passive recruits” are often the most talented of all. 5. Readjust your salary offerings. When it’s a seller’s market, as is the case now, you can lower your salary offerings and hire people for thousands of dollars, if not tens of thousands of dollars less, than when the market was hot. Salary adjusting, however, can be a tricky affair; yesterday’s offer may be too much or too little, depending on the job and the candidate. Salary surveys are helpful, but the market can shift very quickly. Again, a niche placement agency can help you by putting their intimate industry knowledge to use, helping you determine the right compensation for a marketplace that’s always in flux. For budgetary reasons, not every company may be able to take advantage of the current hiring opportunity. And certainly no one knows how long the bear market will continue. But a little creative juggling is all it may take to retain and even enhance the quality of your staff. You can be sure that when the economy fires up, all-star employees looking for work will be scarce once again -- unless, of course, they’re already on board and happily working for you. |
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