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Business in Vancouver January 27-February 2, 2009; issue 1005 Retain, hire, empower – progressive HR strategies are make-or-break factors in a challenging economy HR Strategies: Dennis Wolff The economic uncertainty that followed the meltdown of the major financial markets has left businesses looking nervously at their bottom line. In the face of shrinking revenues, many companies are considering radically cutting costs in order to stay competitive. Throughout Vancouver and the Lower Mainland, a significant number of companies are experiencing a hiring slowdown, if not a complete hiring freeze. While some are expecting a full-blown recession, others are hoping for the upcoming 2010 Olympics to continue to drive business, and are calling on the relatively large number of innovative entrepreneurs in the Lower Mainland to help withstand this crisis. Whatever the economic turmoil will bring in the long run, whatever its true nature, this is the time to re-assess how to handle your most valuable asset – your human capital. It is your ability to retain and attract the best talent that might easily become the single most decisive factor in determining how well you will weather this economic crisis. Here are a few ideas on how to get a head start: Retain your top talent The good news is top talent becomes hesitant to move in tough economic times. But don’t take your employee’s loyalty for granted. Smart employees will ensure they have an exit strategy, and will likely take precautions to find something more stable and rewarding. It is important to understand how your best employees react to slower economic times. It is a tremendous challenge to retain those employees who will make your business thrive in times of economic uncertainty. But not only do you want to retain your top people, you also want to reassure your staff that your company is stable, and set up to succeed in this market. The reality of putting hiring activities on hold or drastically cutting jobs means that serious problems will arise down the road when times are again calling for an expansion of your workforce. Companies do not only lose appeal as employers if they lay off workers or freeze hiring. They may also limit their ability to develop future leaders. Think carefully when you have to dismiss Tough times can call for unpopular measures and dismissing part of your workforce might become inevitable for the survival of your business. Make sure to focus on assessing performance records as opposed to strictly looking at job costing. The average cost to replace an employee can range anywhere between 30% and 150% of the employees annual salary. This clearly illustrates the negative financial impact of employee turnover and should be taken into consideration before radically cutting jobs. What might look like an instant quick fix can become very costly on a long-term basis. Shop for new talent Use your competition’s mistakes to your advantage. A lot of them might not be able to retain their most talented people. This is a great time to shop for new talent. The credit crisis has produced exceptional buying opportunities. This concept can easily be translated into the labour market now that top performers who were previously out of reach are eager to have an exit strategy in place and become more receptive to new opportunities. Hiring during economic turmoil will also increase your employees’ confidence while setting you up to be way ahead of your competition once the economic circumstances become more favourable again. Empower your staff While there is no doubt about the seriousness of the economic downturn, we are also looking at immense opportunities. Economic challenges come with their own set of rules, and smart businesses recognize that this is a time to gain market share. In order to get ahead of your competition, you need to make sure that you have your whole team pulling in the same direction. Implementing a “war room” culture to actively tackle your competition and empowering your staff to come up with innovative ideas will drive your business and uncover new opportunities. With an empowered team you will gain ground in this market and set yourself apart from your competition. Attracting new talent will be the natural outcome of a culture that doesn’t see human capital as part of the balance sheet but as an investment. If done right, an HR strategy that focuses on investing in your strongest assets while implementing a culture of empowerment will help you gain the trust of your employees. Following the law of attraction you will be able to choose from top talent who want to join a winning team. Not only will this strategy help you to successfully navigate through the current storm, it will also ensure that you will be well ahead of your competition once the markets turn around again. • Dennis Wolff is a recruitment consultant at McNeill Nakamoto Recruitment Group, a boutique-style recruitment company specializing in temporary, permanent and contract staffing (www.mcnak.com). He can be contacted at dennis@mcnak.com and 604-662-8967, ext. 10. |
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