It seems surprising that while organisations continue to reduce headcounts, a third of senior HR professionals we recently surveyed reported skill and staff shortages as a continuing problem, despite having to make layoffs.
With pay freezes, bonus pools reductions, ongoing redundancies and training plans shelved, this creates a real problem for attraction and retention strategies. Little wonder that HR functions see the engagement of staff as their number one priority for 2009.
On the near horizon, we also have the media now turning their attention to economic green shoots. In the event of an upturn, managers may find that recently disengaged staff now leave. With a skills shortage still evident, the expertise and capacity these firms need for a strong recovery may suddenly look very thin.
While In the current climate, managers can rely on the threat of job insecurity and limited external opportunities to ensure remaining employees meet performance needs, these resources can only stretch so far. Companies relying on what academics call continuance commitment — the need to turn up because of the fear of job loss are treading a dangerous path. Affective commitment, the kind that creates a willingness to go the extra mile and an intention to stay is likely to have gone, and this is what firms need from staff if they want competitive advantage.
Finding and replacing lost skills when growth returns is not only costly, but time consuming. This is far from ideal in the competitive landscape many firms face. Furthermore with rising levels of stress also reported, an approach which is reliant on similar results from fewer resources is not sustainable.
There is much evidence linking stress to negative performance as well as to outcomes such as increased absence and turnover. Overworked, burnt-out employees facing static pay, continued job insecurity and now inevitable tax rises are likely to feel less than compelled to be productive and ‘go the extra mile’ in the long term.
What should companies be doing to avoid this? Firstly, they could be doing what some smarter firms have already done:
- Minimise redundancy through introducing flexible work practices such as those adopted by KPMG. This is still hugely cost efficient but can protect the integrity of the workforce.
- If this is not possible, then reassure retained workers that they remain a priority.
- Rhetoric must also be backed up through actions. Often the simplest can be the most powerful - keep the free tea and coffee;
- communicate as openly as possible, and seek to allay fears and uncertainty.
- Involve the workforce in making changes. A collaborative group of employees can often initiate ideas and make change happen quickly.
- Make the difficult decisions but do not become aggressive about it.
- Do not treat management differently. Do not protect executive pay, benefits or jobs and then ask or compel the workers to carry the burden. This will see trust and goodwill evaporate, and as we have seen from our recent survey, give rise to increased workplace conflict.
