In today's turbulent and somewhat chaotic business environment, the temptation is for organisations to batten down the hatches and ride out the storm of recession. But surviving an economic downturn is not that easy. Business leaders need to plan, prepare and manage the challenges they are facing.
It's important to recognise that this is a tough ask because the issues being dealt with affect us as individuals as well as employers. In real terms, one of the most newsworthy issues at the moment centres around headcount and some organisations may need to lose staff in order to survive.
It may be simply a question of balancing income and expenditure, but that doesn't take away the fact that it's up to you to make sure that those who are left behind continue to produce the same output to the same standard as before. That's not impossible; it just requires careful management and imagination. There are, however, a number of practical techniques you can adopt to help your organisation cut fat rather than muscle.
Most importantly, it is vital that redundancies are handled well. The last thing you need at a time like this is for bad feeling among your leavers, because this will spread among their friends and colleagues who escaped redundancy. Having an outplacement strategy, often by using an external consultancy to help people to the next stage of their careers, can make all the difference.
Handling redundancies
Employers are often accused of "ducking the issue" when it comes to laying off staff. An organisation that acts without thinking about the consequences will suffer, so equip your managers to deal with the changes. It's important to know - and share - exactly what the role of those responsible for HR and line managers are in a redundancy situation.
‘It is seven years since the fallout from the dotcom bubble and nearly a full generation since the 1991 recession, so it is possible that your managers may never have had to break the news of redundancy'
Think about how different groups of employees will handle the situation. It is seven years since the fallout from the dotcom bubble and nearly a full generation since the 1991 recession, so it is entirely possible that your managers may never have had to break the news of redundancy. They will need support through this. Give them opportunities to meet others in a similar situation and provide training where appropriate.
Your managers also need to know exactly what's going on in the organisation so that they are able to answer questions that their teams ask of them. According to research by the Chartered Management Institute (CMI), all too often the accusation is that business leaders are locked in an ivory tower. In fact, 62% go as far as claiming that their managing director or chief executive is out of touch with how staff feel. Only 40% said the head of their organisation chatted to staff, and less than one-fifth have experienced an open-door policy.
It is vital that you hold regular briefings to update your teams. The HR and business strategies need to be absolutely aligned, because employees will want to know the reasons for the changes. Remember a salient point: 65% of individuals have undergone major organisational change in the past 18 months. The uncertainty this breeds can have a dramatic impact on the quality of their work if managers can't answer their questions.
The effects of engagement and motivation on productivity are well documented. The more engaged an employee, the more likely he or she is to put in that extra effort when you need it the most. Don't expect an easy solution though; there is no one magic formula for engagement. Rather, it is linked to how employees feel about their jobs and how meaningful their work is.
In these challenging times, it has become more important than ever to demonstrate strong leadership. Clearly cutting costs is a major consideration, but there are benefits associated with sensible levels of investment, where these are affordable.
It is vital that small business owners remain composed in the face of growing economic pressure because knee-jerk reactions will only serve to exacerbate the problem. It has always been easier to manage when times are good, but the current climate is a real test of how strong your leadership credentials really are.
Ruth Spellman is chief executive of the Chartered Management Institute
