Don't panic! Think of your people and survive the downturn
27 March 2009 8:53am
Panicky managers that put bottom-line efficiencies before people during the economic downturn run the risk of obliterating company morale and losing their best talent, says Robert Half Asia-Pacific's managing director, David Jones.
While overall there has been a decrease in employees exiting jobs - due to the uncertain economic climate - there has been an increase in the talent quitting their jobs and citing managerial issues as the reason, Jones says.
"Managers have put so much emphasis on cost-cutting and delivering bottom-line efficiencies, that they've taken their eye off the ball and forgotten how to manage their greatest asset: their people," he says.
"Managers are panicking. They're so worried about their own job security that they're cutting staff pay and benefits without good reason and, in some cases, without any justification as to why."
Jones's comments follow disquieting results from a recent Robert Half International employment survey of more than 3,500 accounting and finance professionals from 14 countries, including Australia, the UK, France and Japan.
Some 41 per cent of Australian respondents feel that their employers are either unconcerned or indifferent to workplace morale, the survey found, and only seven per cent believe that employers are especially concerned about the imminent departure from the workforce of the baby boomer generation - suggesting that businesses are in danger of becoming too shortsighted about talent management.
"In times of economic downturn," Jones says, "it is essential that companies take a long-term view, as business success is largely dependent on the ability of staff."
Less than half of finance and accounting companies, the survey found, are currently taking steps to prepare for the exodus of baby boomers, which will pose significant HR challenges to Australian companies in two or three years' time.
Jones estimates that about five per cent of the working population will retire as soon as super funds bounce back.
"Safe" staff planning to leave
Recent research by recruitment firm Chandler Macleod has found that as many as 76 per cent of employees who have kept their job in organisations that have made redundancies are anxious about their futures and will seek new employment opportunities within the next six months.
Cutting back staff without properly weighing up all these factors will see many employers "fall short of good people", Jones says.
Chandler Macleod Consulting's executive GM, David Reynolds, agrees. He says that many employers have "cut a lot of fat" already, and are starting to cut into "muscle".
"Unfortunately, when employers cut deep they cut out key talent and the heart of their organisation," Reynolds says.
Common downturn mistakes
"Unless employers put their people priorities back on the business radar, companies are at risk of losing their best talent," Jones says.
"It is a well known fact that people don't leave their company, they leave their line manager, so managers need to smarten up, appreciate the loyalty of their staff and take employees on an open and honest journey in the downturn."
Robert Half has identified what it considers the 15 most common mistakes employers are likely to make in times of economic uncertainty.
believing employees should feel lucky to have a job - talented workers are marketable in any economy and always have other options;
failing to stand up for employees - particularly when they're unfairly criticised. If you're not there for them, they won't be there for you;
making the wrong cuts - making layoffs or reducing spend in the wrong areas could erode the quality of client service, alienating prospective or existing customers;
cutting back on training - resisting staff-development budget cuts and enhancing employee skills will pay off in both the short and the long term;
saving praise for last - failing to recognise workers for their efforts or leaving the praise until it's too late; and
waiting for an economic turnaround - give yourself a head start; if you have a good idea, don't wait for the recovery to implement it.