Newsletter - April 2009
Navigating the New Talent Management Landscape
April 9, 2009 - Elizabeth Denney
In a down economy, many companies make critical errors in employment decisions. Wise decisions regarding whom you retain, whom you let go and whom you hire can make or break an organization that finds itself fighting for revenue in a shaky economy. Even the most seasoned executives and savviest hiring managers are known to default to knee jerk, short term cost cutting measures, rather than long-term talent management strategies. With that in mind, here is a survival guide for weathering the storm and positioning your organization to capitalize on the unique opportunities that just such an economy has to offer.
Time to Consider Your Options.
The most overlooked opportunity is that of time. When companies are busy, there is little time to evaluate vendors, particularly search firms, and outplacement and coaching organizations. During peak times, companies often find themselves in a panic, needing “bodies” and without first doing due diligence, end up grabbing a staffing or outplacement company that can push resumes. This is the time to make yourself and the other hiring managers in your organization better informed professionals. Take the time to “interview” new potential staffing and outplacement companies and find talent management partners that truly align with your culture, your budget and your long-term organizational needs.
Stop Rewarding Longevity. Start Rewarding Performance.
In times of cost cutting, many companies make the mistake of rewarding “staying power” rather than performance. “Last in, first out” is an easy out for a reduction in force, but it isn’t always in the best interest of your organization. New hires often bring new ideas and new energy to the company. They may hold the key to capitalizing on avenues for growth or higher margins based on additional experience outside of your organization. Taking the time to carefully weigh potential, as well as past performance, is imperative. Reductions in force (RIFs) offer an exceptional opportunity to release long-time employees who are under-performing and focus on creating a leaner, but better-performing company.
Show Your “A” Players You Care.
Cost cutting and downsizing have a negative emotional impact on those who stay behind, as well as those who have to leave. The knowledge that your company is laying off employees leaves everyone feeling uneasy. Often, it isn’t just the insecurity of whether one will be let go that causes unrest, but the long-term health of the company that undercuts the security of those who are still employed. Whenever a RIF occurs, no matter the reason, no matter the department or location, make sure that it is communicated to your “A” Players that their jobs are safe and explain to them why their unique contributions are so valuable. Rarely does security come in the form of money; security comes from the knowledge that one’s company has a workable plan for the future, and that plan includes that employee. Talk to your “A” Player about the ways that you will prepare him or her for greater oversight as the company transitions back into growth mode. Prepare your key players for greater challenges by ensuring mentoring opportunities and coaching with a reputable organization. Communicate the short-term and long-term plans for the company. Don’t forget to ask your employee what his or her short- and long-term goals include, and tailor your professional and personal growth plans accordingly.
Replace Your “B” and “C” Players.
In times of change, too many companies forfeit opportunities to release marginal players because they “just don’t have to.” Downsizing in a down economy offers a unique opportunity to drive change in your company, by folding underperformers into a RIF, even when it isn’t absolutely required. Slow times mean that many positions can go temporarily vacant with little or no negative impact to the company, and be filled with truly strong talent who will generate real results. Further, two underperformers might be replaced with a super star who drives greater results on one slightly higher salary, than the others did on two. While many of the people flooding the job market are “B” and “C” Players, you may find your company in a position to get an exceptional performer who might not be affordable for you in a stronger economy. Make sure you conduct extremely detailed reference evaluations for anyone who has been let go; down economies also offer a smoke screen for under-achievers to hide behind as well as an excuse for their employers to let them go. The biggest risk in hiring in this economy is that of bringing in “B” and “C” Players that your competitors happily laid off.
Attracting Top Talent That Isn’t in the Job Market.
Contrary to popular belief, it is possible to lure top performers away from stable employment, even in a tough economy. Rather than digging in and riding out the storm, top performers are generally open to the right opportunity, even if it finds them with job security in a tenured seat. These individuals usually aren’t looking for jobs, but will be open to a call from an experienced professional who asks the right questions and knows the right answers. Critical to successful recruiting of passive candidates such as these is finding the piece that is missing in their current role and aligning it favorably with your organization and the role you are representing. A good direct recruiting company, particularly a retained executive search firm, is almost always critical in achieving the best possible outcome. Hiring a non-commissioned firm elevates the status of the job and the stability of the company. It offers more neutral ground for open discussion about career-change motivators and better opportunity to properly align with cultural and professional fit.
Making smart hiring decisions is also a way to keep the eye of the employees you want to keep. By bringing in strong talent, you show that the company is growing as well as changing for the good. New hires can mean new mentors for others in the company, as well as intellectual challenge and a feeling of security that the company is moving in a positive direction.
Even the way you release employees says a lot about your organization to our employees and potential hires. Organizations that offer outplacement services for RIF’ed employees do more than help the employees in finding their next job, they enhance their company “brand.” Companies who use outplacement services show that they truly care about their employees’ careers outside of the company, not just while they are driving revenue for it. Outplacement services are a comforting thought to anyone making the decision to join a new company. Companies who offer these services are seen as more employee friendly and of greater integrity than those who don’t. Once the emotional side of being let go is released through outplacement exercises and the process of healing and preparing for next steps begins, outplaced employees have a more positive view of their former employer, and often become evangelists for the company after the fact. And setting aside funds for outplacement sends a subtle message that the company has cash reserves, thereby creating a feeling of security for those who stay with the company.
By taking the time to make informed decisions and focusing your talent management budgets on hiring and retaining “A” Players, you will find your company will emerge from the tough times as a stronger, smarter company, ready to capitalize on the mistakes of your competitors. Smart decisions now, can bring a significant return of investment for companies who divest—and invest—wisely in the right employee mix.
Elizabeth Denney is with Smith James Group, Inc., an affiliate of CMR, an OI Partners company.
