4 Ways to ride out the Credit Crunch

Obviously the credit crunch and downturn are key issues at for anyone planning future investment – particularly if they’re were thinking of expanding their business and workforce. I’ve heard people complaining about the media and other pundits talking up the recession. There may be some truth in this accusation. Nonetheless there is enough to worry about and, in these matters, perception is everything.

Economic cycles affect our people policies hugely: a few ideas and findings:

• The Office of National Statistics finds that in the quarter up to June there has been no increase in redundancies and vacancies are up by 1%.
• The CIPD/KPMG Market Outlook Survey suggests that 34% of employers are planning to recruit more people while the number planning redundancies is down 16% at 22%

Some of this seems at odds with recent findings from the Hay Group that workforces could contract by 1.1%. But underlying thinking about the future are the lessons of previous downturns.

Start getting rid of people and your ‘talent’ will jump ship. When the upturn comes your ability to react will be hampered by the need to recruit.

So:

• seeing recruitment and development budgets as a key to sustainable performance rather than something to be lopped at the first sign of trouble is crucial;
• if key people leave, it’s even more important to get your selection procedures right so that they get up to speed and perform to expectation in the shortest possible time;
• development activities are a key motivator for top talent to stay with a company if wage rises are squeezed;
• leaders need support. A recession stretches their abilities, not least in communicating effectively and in thinking up fresh solutions, two areas where Holst specialise.

Maybe the downturn won’t be too bad; maybe it’ll be worse than we predict. Whatever the case a thought-through people policy and robust ways of developing people will help carry you through, and accelerate out of the up-curve.