As the economy changes, employers are forced to manage their workforce more effectively and efficiently in a marketplace impacted by downturns and instability. Companies are more challenged to create ways to attract and motivate employees. As companies manage through the downturn, it gives way to opportunities, including re- evaluating processes, creating a new vision and re-aligning people with a clear path.

ESSENTIALS OF MANAGING DURING A DOWNTURN:

BE REAL/DON’T PLAY THE BLAME GAME: During a downturn, it’s even more important for companies to be candid. Employees expect and value candid communication regarding the “state of affairs”, the impact of the downturn, and what you are doing about it. To add credibility, experts suggest not blaming the economy for all the reasons the company is suffering. If you say “it’s the economy that’s causing all our problems”, then it may send the wrong message and imply the situation is totally out of the company’s hands. This may, in turn, raise anxiety levels in the office and disrupt employee focus on the problem at hand: turning business around and getting re- sults. Experts believe that companies that clearly communicate the realities and the strategy will emerge as stronger organizations. Open the books-show employees the financials to support where the business needs to change and how their jobs connect to the overall company goals and future.

ENGAGE AND LISTEN: Encourage employees to openly discuss concerns and/or solutions to managing through this downturn. Economic uncertainty creates a level of anxiety, which makes employee engagement even more important. In addition to employees, listen to your customers. By openly communicating, you may get more ideas and solutions from employees and customers. They may even have ideas that will address some of the challenges during the downturn. Experts suggest emphasizing to employees that the economic changes can result in benefits. “It’s a great time for employees to realize that they can play a role in discovering opportunities for the company,” says Vince Thompson, a former manager at AOL and author of the book Ignited. Brenda Gilchrist, Cofounder of The HR Matrix, LLC, states “now, more than ever, is the time to address the rumor mill by having open forums to address the rumors and answer employee questions.” Thomas, author of Ignited suggests to shift focus so teams can invest time identifying and prioritizing projects that will generate the most benefit for the company. Even if the final product will have to wait until more resources are available, doing the legwork now means the product will go to market faster when the time is right—and employees will stay engaged in the meantime. Derek Irvine of recognition solutions provider Globoforce points to the recent Towers Perrin global workforce study, which reported that almost four out of five workers are not performing at their optimal level, with two out of five "checked out". The threat of recession has exacerbated fears and by distracting staff, has already hit employers where it hurts - productivity. According to Irvine: "Companies with high employee engagement show a 50% differential in operating income over those with low engagement scores, making engaging employees critical for company success - especially when a company is struggling for margins during an economic downturn."

BE VISIBLE AND AVAILABLE: In this downturn, just being more available to employees can encourage productivity and bring people together. Increase MBWA (Management by Walking Around).

MOTIVATE AND INSPIRE (Keep key talent): Harness your employees’ abilities to be thought partners in your effort to cut costs, increase revenues and how. Utilizing your employees expertise will make them feel more invested in the company’s success and will make them feel more engaged with the focus and mission to turnaround and help the company survive a downturn. Paying special attention to your key employees is important during the down market – you don’t want to lose them to competition when the market upswing hits. “Keep critical talent moving – not necessarily up, but growing in experience, responsibility, money or other tangible ways, “say Monster executives, Steve Pogorzelski, Dr. Jess Harriott and Doug Hardy.

INVEST IN RESOURCES: Now is the time to recruit new talent if you have the resources to do so. There are more candidates to choose from – take advantage of it, if you can. Case in point: Apple’s Steve Jobs, when asked by Fortune Magazine about Apple’s strategy for the downturn, Jobs point to how the company survived the 2001 tech bust by upping it’s R&D budget. “It worked, and that’s exactly what we’ll do this time,” he told the magazine. Leaders and managers with little experience managing through a down- turn will be quick to freeze hiring, layoff employees, halt training and development and conserve cash. These short term measures may negatively impact a company during the upswing. In some expert opinions, there is no better time than a downturn to improve your competitive advantage. For example, cutting training may be the first area to cut, but the training may be the key to your success in making changes and gaining your advantage in the market. Companies that recover the fastest are those that have a defined purpose, clear priorities, structure and process that work and the right performance and accountability measures that rewards results.

IMPROVE PROCESSES: It’s the perfect opportunity to re-evaluate your processes and procedures. Let your employee form teams and/or focus group to solve problems and make suggestion to achieve savings and/or increase revenues—employees that are frustrated with certain procedures may come up with the best solutions. Caution: if you ask for feedback and the company fails to successfully implement changes, it may back fire and send the wrong message to employees. Act on good ideas and ensure that changes aren’t sabotaged by disgruntled employees and/or those who are resistant to change. With any change, it’s always best to include those mostly impacted by the change and give as much notice, if possible, that change is coming.

DEAL WITH PERFORMANCE: It seems like managers should be dealing with performance at any stage of economic condition, but a downturn seems to suddenly put the spotlight (or at least it should) on the employees who are only performing at a minimum standard. The change in the economy should highlight the need for mangers to always be evaluating resources and making decisions that will ultimately align resources to support and position the company for success.

REWARD TOP PERFORMERS: In a downturn, most top performers end up taking on more work and in most cases feel “over worked and under valued”. Since cash is tight, for most companies, it critical to offer creative rewards to recognize employees that will help achieve results. Non-cash incentives may include giving employees more responsibility or take on more engaging projects that they can learn from. Give employees more flexibility and autonomy to have a better work-life balance; allow employees to work from home, to leave early for family matters or to pursue outside interests. Sun Microsystems found that employees who worked an average of 2.5 days at home each week saved $1700 a year in gas and vehicle wear-and-tear. Plus, this offering gives employees a sense of trust and respect. Case in point: in 2001, Yahoo just received a hard knock from the dot.com bust. Instead of quietly giving large bonuses to overachievers, which wasn’t providing much bang for the buck, decided to create a Yahoo Superstar Award program to honor employees contributions like inventing a way to advertise on instant messages and fixing troublesome accounting problems. Libby, VP of HR said, “when people saw the winners, they understood why they won and it took hold and became part of the culture.” Cash isn’t always king. Sincere appreciation and recognition goes a long way.

About The HR Matrix
The HR Matrix is a human resources and organization development consulting firm based in Santa Rosa, CA. The HR Matrix services include onsite placement of human resource professionals for temporary or long-term assignments, as well as outsourced expertise in the areas of human resources policy and process development, HR Audits, compensation and benefits plan design, employee relations and risk management, legal compliance, change leadership, performance management systems, business process improvement, teambuilding, training and development, and meeting facilitation. The HR Matrix Consultants have been serving a variety of industries including health care, financial, manufacturing, technology, associations, hospitality and non-profits. Contact The HR Matrix at 707-526-0877 x 11 (PST)

Presented by Brenda Gilchrist, CoFounder and Principal of The HR Matrix, LLC

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