How to manage your workforce in the recession

CIPD together with ACAS has released an official guide for businesses to get through the recession. There are a few points that I would like to highlight.

Think long term
A lot of businesses are exploring aggressively to cut down on their operating costs. There are a variety of measures by

• cutting jobs
• terminating improvement projects
• insourcing
• using cheaper solutions and products

While these may help to bring down the cost at the moment, it might not benefit the organization over the long run. 

• Talents and experts that took time and money to be trained are being lost together with precious domain knowledge. Bad publicity also results in lower trust by the clients.
• Forsaking opportunities to achieve efficiency and additional potential revenue
• Higher expense – Forsaking the opportunity to get the job done by the experts at a cheaper rates 
• Lower service/product quality. Additional expenses to customize the solution or manual workaround. The worst scenario is to spend extra money to migrate the solution in future. 
• Incurring unnecessary (indirect) expenses – It is possible that an effort to reduce software licensing costs could result in huge, additional expenses during  the migration to another cheaper system.

It is important to find a good and low cost solution which is scalable with additional investments when possible.

Maintain employee engagement
We always say that employees are the ones who make a difference to the company. At this time, there is a need to boost the morale and keeping them engaged. It is also necessary to set a clear sense of direction from the top management. I once heard a management story highlighting how good intention can end up wrongly executed –

The top management said cut unnecessary cost. The middle management said cut manpower cost. The employee told his wife “I got cut”.

Therefore it is essential to set up a platform for the top management to communicate their plans down to the line workers.

Develop a strategy for redundancy so it’s there when you need it
A lot of companies have put in plans to handle the redundancies through hiring of contract workers and outsourcing to external vendors. However, they may have missed the crux when there are cases where companies have to retain the contract staff and retrench the permanent staff.  There are also occurrences where  the dependence with the vendor has grown so high that it is almost impossible to switch to another cheaper vendor.

Even though the jobs have been outsourced, there remains an important and urgent need for companies to capture the essential knowledge within the organization. This is possible by setting up a collaboration site (Confluence) or issue tracking list (Jira) to capture information that are important to the organization.

Have you implemented these strategies in your organization?