Investing in People Matters -- Now More Than Ever
January 22, 2009
Investing in People Matters -- Now More Than Ever
From the PHCC Educational Foundation via third-party
It’s here; there’s no denying it. Whether you’re willing to use the “R” word or not, there are very few who feel that the next few months or years won’t require us to think prudently about everything we do in business. Customers will feel it, employees will feel it, and vendors will feel it. That means you’ll feel it too. Tough times call for all sorts of measures – from simple and creative to deep and drastic. If you’re like most service companies, your staff expense – including salaries and benefits – and facility costs are easily your largest budget items and therefore amongst the first things that you’ll need to scrutinize as times get tougher. However, it’s one thing to think about cutting space and another thing completely to assess your staffing budget and consider layoffs.
So, how do organizations navigate these difficult decisions? For small to mid-sized organizations, options may seem limited. Large organizations can reduce, let’s say, their business development staff by 10% and still have nine employees dedicated to meeting sales targets. For a small organization, one employee is 50% or even 100% of the business development team. Further, you and your staff rely on the company for your income. If you’re like most chief executives, the responsibility for the livelihood of your people is one you take very seriously. That alone makes the goal of survival important enough to develop a viable strategy.
The answer lies in returning to fundamentals. You will need to work proactively to reconnect and reinvigorate the vital relationship between your mission and your people. Most Presidents and CEOs fundamentally understand that people play an important part in the success or failure of their organizations. Their instincts and experiences compel them to believe that increased investment in their people is tied to greater success for the company. But when budgets contract and difficult decisions have to be made, it can be all too easy to overlook the strategic value of continuing to invest in people. Investing in your people however, is critical, not only to survive, but to preserve the talent you will need when the economy rebounds.
A Call to Action
Leaders know that the company’s long-term viability depends on both achieving company goals and nurturing a healthy workplace culture to foster superior delivery on those goals. Good leaders recognize that the workplace culture profoundly affects the lives and livelihoods of employees and can equally impact – for good or bad – the success of the organization. The most skillful executives delicately and actively balance between pushing for top performance and meeting the workplace culture needs of the people they employ.
In plentiful times, this juggling act is made easier by the ability to address problems, in part, with injections of resources – be they dollars or people. However in lean times, when there are untold pressures that interfere with this delicate balance and when there are no additional resources to turn to, it is the President or CEO who must ultimately maintain the critical Links between company goals and employee contentment. By working to retain their key talent, when good economic times return, these leaders will a vast head start over their competition.
Here are some key actions that you can undertake right now to protect your investment in human capital.
- Get out there and be with your people. There is no substitute for personally engaging with your staff. You need to see and hear what your staff is feeling.
- Project positively. Demonstrate your personal commitment to and responsibility for the organization’s future. Remember, it will not just be what you say, but the small gestures and non-verbal clues that you give. Keep up your normal routines. You can and will set the tone of either optimism or pessimism.
- Be open and honest with the staff about the company’s position – even if you are uncertain. Your staff is smart; they will know if you are sugar coating issues or withholding information.
- Proactively talk about what you are doing with the organization to respond to the current situation. Engage people in decisions, set aside historical barriers, and make room for alternative approaches.
- Reinvigorate your staff by picking a clear and specific near-term issue or goal for the company to focus on. Tackle or fix one thing at a time. The narrower the focus, the easier it will be to rally them into action.
- Do not diminish how your staff feels about external and internal stresses facing all of us. Allow staff to express their concerns about the business, the country and their personal wellbeing. Clearing this dust is a powerful first step to sustaining productivity.
- Look carefully at your existing staff and decide if they are the right people for the job. During tough times there is less tolerance for underperforming staff and you may need to redesign how your deliver your product with fewer resources or using your human resources differently. First, make sure that you have a strong management team and then use that team to help determine the staffing design that will help you survive the current downturn and position you to thrive once the tide shifts.
- Do not take the retention of your staff for granted. Regardless of layoffs and hiring freezes, there continues to be movement in staffing – particularly for the best talent!
- Remember, top performers want to work with other top performers. If you have to conduct a layoff, choose based on who makes the biggest difference in short and long term profitability. Don’t sacrifice top talent for meaningless reasons like having a shorter tenure than another employee who is under-performing.
It takes fortitude and foresight to lead successfully through troubled times. There is much to contemplate and many choices to make. This go round, many of our investments have simply vanished into thin air. There is, however, one investment that still provides significant returns–your people. Take the time to invest in them now to reap current and future rewards for your work.
This content was provided by a third party via the PHCC Educational Foundation. Please consult your HR professional or attorney for further advice, as laws differ in each state.
The PHCC Educational Foundation, a partnership of contractors, manufacturers and wholesalers was founded in 1987 to serve the plumbing-heating-cooling industry by preparing contractors and their employees to meet the challenges of a constantly changing marketplace.
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