With the TUC’s warning about jobless figures ringing in our ears and an ongoing need to keep costs down (you didn’t actually believe all that green shoots stuff, did you?), it’s tempting to think that this is a buyers’ market for employers. After all, existing staff are too paranoid to change jobs; and with higher unemployment, you’ll have the pick of the labour market at rock bottom prices.
But don’t get too comfy. A couple of weeks ago, I chaired a panel discussion with five UK finance directors about strategies for coming out of the recession. Among other subjects (and let me know in the comments section if you’d like to hear about more of them), the FDs tackled payroll costs. Maintaining talent in their workforce, they said, will be critical as we eventually head into an upturn*.
That’s partly a pure finance function issue. Both during the recession, and when things grow again, the finance director needs skilled and creative people in his or her core team as well as shadowing and supporting managers out in the business. That’s about ensuring discipline, but also helping people to work smarter and generate more value. Skimping on those staff is a clear false economy.
But more broadly, the FDs on the panel felt there was a real danger that panicky management often cut the one thing that makes them special and will be essential to their future growth: their people.
“I’d just like to say a big thank-you to all our competitors who have been getting rid of such great staff at the moment,” said Andy Blackstone, European CFO for M&C Saatchi.
That’s helped the firm open up three brand new offices (in Brazil, Japan and Switzerland) — which would have been much harder without talented people on the ground ready to go. Better yet, he said, when your existing staff see you hiring great people, it motivates them to raise their game, too.
Another FD – whose operations include a call centre — has seen staff turnover fall from 60% to 25% thanks to uncertainty in the jobs market. He’ll be raising a glass to Brendan Barber and his TUC colleagues for highlighting the ongoing dangers of unemployment, further strengthening his staff loyalty. But he can’t be complacent.
He knows that if the people sticking around are just the weaker members of staff, his business will be a loser in the long term. So there’s an equal emphasis on training and appraisals to ensure talent is coming through.
In fact, said the FDs, you might find it’s all cost neutral: what you save on recruitment costs, you need to spend on development.
“If you don’t identify, protect, motivate and develop those people - because you’re worried there’s not a lot of money to go around - you could lose them to companies that clearly do value talent,” said Steve Hill, FD of Uniq plc. “And when the recession is over, you’ll definitely lose them.”
If even the bean-counters are saying that we need to make sure we’re not doing job enlargement for our best people but job enrichment instead and we need to be spending money on talent despite the pressure on cash - perhaps we should listen.
* The consensus among these finance directors was that a proper upturn would not start this year. In fact, while the economy seems to have stabilised, the FDs reckoned it would be around 18 months before things start to feel bullish again. Although, based on a show of hands, a good 20% of FDs in the audience have actually seen their revenues grow over the past 12 months…
