Guru Speak

Markets here and abroad are shrinking at rapid rates and managers are faced with tough decisions on how to manage the performance of their company while keeping their workforce employed, and how to balance the workforce needs of today with what customers will demand of them in the near future.

How they decide to cope with the current environment will determine whether their company will be ready and able to capitalise on future growth opportunities.

While the typical reaction might be to immediately reduce workforce size, many executives have come to realise that it might not be the most effective solution.

A Deloitte survey of global executives reveals that methods of coping with the recession differ from the past - more leaders say their top priority is restructuring jobs while fewer focus on reducing headcount.

No matter their method of coping, all companies will generally focus on trimming costs attributable to employees, especially compensation and time.

Reducing compensation means changing the compensation structure and eliminating perks, bonuses and pension contributions.

Changes to working time can be seen as more radical than changes to compensation. Some companies have instituted a fourday workweek while others have encouraged sabbaticals with a guaranteed post upon return.

Nonetheless, every company's exposure to the global crisis will differ and their strategies need to be tailored accordingly.

If companies are experiencing little to no distress from the downturn, the recession can be used as a time to strategically develop their workforces by improving and accelerating training programmes in order to cater to customer needs, and to dominate the competition when the economy recovers.

Stick to talent management goals, making sure you increase focus on critical and high potential employees. Reassess which programmes are worth keeping by examining which will directly benefit customers.

It is also an opportune time to take advantage of the current labour market by recruiting talented individuals who under normal circumstances would be difficult to attract.

Since employees typically take at least a year to fully acclimate to their new position and achieve maximum productivity, recruiting employees now will allow your company to take advantage of the recession and afterwards.

However, for companies severely impacted by the recession, employee layoffs are highly probable. In this situation, companies need to consider a systematic approach to identifying and retaining employees vital for future growth.

Management needs to effectively balance the competing objectives of the company while identifying specialists with required expertise, and high potential employees with the breadth of skills necessary to handle the increase in respon¬sibilities originating from the layoffs.

Due to the demoralising effect of layoffs on employees, frequent communication is important in reestablishing trust. Begin reestablishing trust by reaching out and assisting former employees to achieve a soft landing after service with your company.

In their effort in reducing costs while balancing the need to effectively manage human capital challenges, businesses must focus on reducing costs without undermining their long-term goals.

Managers should reassess the needs of their organisation and selectively apply the ideas discussed above, in order to survive the downturn and remain ahead of the competition.