Across the world, leaders of middle-market companies are struggling with dozens of difficult strategic decisions as we continue to face the global recession, but on the top of everyone’s list seems to be: do we hire, fire, maintain or modify our human capital? If sales have slowed, the national inclination is to seek staff reductions, but that may reflect too much short-term thinking and not enough medium to long-term vision.
Once you start cutting, where do you stop? What are the real and perceived savings—and at what reputational or cultural costs? And how do you know if you just let all of your “rising stars” and most productive people go, perhaps to start competing businesses or join your primary competitors? Clearly, you need to analyze the consequences of these decisions very carefully and understand their long-term impact. You should conduct a strategic analysis of your compensation strategies and look for inefficiencies. But, do not cut just for the sake of cutting.
For further insights into the human capital situation, I interviewed one of the top executive recruiters in the
"Even in these tough economic times, many employers are still hiring. The key difference, though, is that while they may no longer be looking to add personnel [to alleviate] a high workload, they are looking for key individuals who can add value to the organization. This may be a demonstrated ability to save the company money (someone with a strong track record in procurement), or a history of successful IT integration & consolidation projects. Alternatively, and perhaps more important, people with the ability to act as 'rainmakers,' who can leverage their network of personal and business contacts to bring business to the company, will always be in high demand."
Again, notice the Relihan’s focus on productivity, performance and innovation. If your sales are down, the answer may be to hire more experienced sales teams, not just cut the ones you have (unless they are the reason for the downward trend). If new product innovation has ground to a halt, you may need to hire more engineering teams who truly know how to innovate. In assessing human capital strategies in tough times, use a strategic scalpel to cut costs where necessary, but in many cases, targeted hiring may actually be the answer.
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