As we all have heard, corporate profits dropped significantly (some sources say by 1/3) in the latest economic downturn, and companies were cutting and slashing wherever they could, including eliminating some product or service lines.  Because  of the belt tightening companies have become very efficient at delivering their product or services with fewer resources.  As a result, second-quarter 2010 profits for industrial companies in the S&P 500 stock index were $189 billion, up 38% from a year ago.  The outcome in many cases was as much a result of cost savings as revenue growth.
But..how does that affect the staff that got to keep their jobs?  And what are the long-term effects of this new way of working?
An article in the Society for Human Resource Management news (1/7/2011) highlights some of the problems in doing more with less.  Companies know they cannot continue cost-cutting to success, but for the last two years that was the major tool in the toolbox. 
Among the problems mentioned in the article are:  Diminished capacity, capability and agility, misaligned organizational structure, broken business processes and declining workforce engagement.  These issues can greatly affect future success.
Diminished capacity refers to not having enough staff, which can directly affect the company’s cost structure and ability to deliver the goods.  In well-staffed organizations there is the ability to shift people rapidly to respond to shifting business needs.  In a reduced-staff organization the employees have to focus on their immediate responsibilities, leaving little time to help in other areas.  Obviously the inability to respond will affect the company’s ability to compete.
Misaligned Org Structure can, as a result of rapid reorganization, leave an organizational chart that no longer is aligned to support the business. There are resulting gaps in roles, work process, accountabilities and information flow.  Structural gaps also occur when companies eliminate middle management positions without eliminating the work, forcing employees to take on added responsibilities.  Employees unprepared for management issues often end up “winging it” to the detriment of the company.
There are also broken business processes, partly as a result of prior reliance on long-term employees for “tribal knowledge” of the operation.  By failing to document or address the broken processes the companies can lose core efficiencies – and have to re-invent the wheel.
Eventually the workforce becomes disengaged.  In the short term everyone was glad for the job, and willing to pitch in.  It has become obvious, however, that this  situation is going to continue for quite awhile.  Not only that, but these loyal employees aren’t seeing monetary rewards for their efforts.  These employees are hunkered down until new opportunities arise, and then some organizations may lose a lot of valuable talent.
Unless companies address the problems created by the downsizing, they will start to lose the advantages gained by the initial cuts.  They need to be able to manage the new structure and reevaluate skills needed to stay competitive – and be ready for the next wave of new business!

Tags: change management, employee morale, Hiring Trends, industry news, job seeker attitudes, performance management

Various publications continue to predict that we will not see huge economic recovery gains in the new year.  One of the steps companies and employees can take to improve their business success is to improve efficiency within the work groups. 
An article in December 2010 HR Magazine talks about “slackers” and how to better manage them.  Adrienne Fox writes about workers who know how to be adequate performers without pushing too hard.  She defines “slackers” as people who know they could be much more productive but make a conscious decision not to be.  One consultant group survey showed that 44% of employees admitted that they knew how to increase effectiveness but didn’t.  One HR manager at the University of Oklahoma stated that the lack of commitment to the organization tended to result in more counterproductive work behaviors.
Various factors affect employee commitment.  Sometimes the worker doesn’t understand the job clearly.  Others see co-workers slacking off without consequences and become disheartened.  In other cases there may be a lack of resources to do the job well.  There may also be a situation where workers feel efforts are not matched by the rewards offered, and so “make do”.
Most of us know someone that we went to school with that was able to make excellent grades with little effort.  In the education system many of the good students end up bored or unmotivated because they weren’t challenged, or because no one seemed to care about the results they delivered.  These same talented people may end up in a job that doesn’t keep them interested.
In my workplace experiences, the leaders I worked the hardest for were ones I respected and that had a clear vision of what to do and how to do it.  They kept me involved through their leadership skills and their ability to engage others.  In some jobs, the situation was so frustrating or the politics so overwhelming that I did what I had to and started looking for a way out!
Solutions offered on how to manage the slacker range from motivational efforts to get them committed to the goals, or to weed out those that are just plain lazy.  In many cases the individual is accustomed to being rewarded for natural talent rather than effort or commitment, and may give up when the going gets tough.  It is always the manager’s challenge to identify and deal with these employees.   If not, the end result can be a demoralized workforce, or one where all the hard workers leave for better opportunities.  Such is the agony of management!

Tags: change management, effective learning, employee morale, performance management

As we are all aware, the jobless rate hasn’t dropped much in the last year. Hiring is happening, but piecemeal, and for specific talents. So, one way to set your target is to watch industrial/business news about what positions have been difficult to fill.

An article in the SHRM Magazine, June 2010, highlights a projected severe shortage in workers for the utilities industries. According to the article, electric power industry companies estimate that 30-40% of its 400,000 workers will be eligible for retirement in the next two years. These positions range from executive level to skilled craft workers and may create a huge demand for people to fill these slots.

HR folks in all utilities have been aware of this issue for years, but there has been a lack of future workforce planning to make sure the right people are available to meet the need.

One company in this industry, Southern Co. built a statistical model that highlighted particular hot spots..technicians, system operators, control system engineers, water and wastewater operators and operations management. So – hiring ahead is part of the plan.

There is, however, a problem finding qualified replacements for the industry– inadequate training and education of workers. Companies are even willing to train on the job but the candidate needs to be science-savvy and a high school graduate.

Another industry that will need (and does now) more skilled workers is the healthcare world. There are not enough trained nurses and techs to fill the needs now. One nursing educator in southern California said most of her students were preparing for a second career. The healthcare insurance industry will also be adding folks as more of the population obtains formal insurance coverage.

Job seekers need to check business/hiring surveys put out by local departments of labor or professional organizations. Educational institutions will also have hiring and salary information for the area. Then, get the tools you need to fill the jobs there are.

Tags: candidates, change management, hiring process, hiring talent, industry news, job seeker

Economic development folks always mention that new companies with new ideas are a good source of new jobs. An article in Inc. Magazine (July/August 2010) cites a statistic that young companies, (younger than 6 years old) provided the bulk of new jobs. In 2007 they accounted for 64% according to a Kauffman Foundation survey conducted in 2009. So, how do we support the folks that start these new companies—an average of 500,000 per year?

There were a number of suggestions provided in the article, and interestingly New Mexico was used as an example of how to grow a local investment community. The program created through the state committing funds to venture capital firms that opened an office in New Mexico greatly increased the number of VCs in the community. The presence of national venture capital companies has more than one benefit.

Initially of course this presence provides a more direct access to capital for local entrepreneurs. Add to that the fact that these representatives provide invaluable feedback to startup companies in the state and it does give entrepreneurs a leg up. It also makes it easier to attract investment from out of state, as the investor usually wants a local firm to partner with who knows the territory.

Another suggestion that New Mexico has also followed is having local non-profits that provide resources and training to entrepreneurs. Technology Ventures Corporation, University of New Mexico’s Science and Technology Corporation and local economic development groups can give entrepreneurs access to tools and learning to help them with their startup efforts.  The national laboratories, Sandia National Labs and Los Alamos National Lab offer tech support grants to small businesses, and encourage technology business development.

Other ideas were to expand microfinancing, fund big science, rework the SBIR and expand funding, cutting paperwork overall, and passing an energy bill. All these ideas would have a positive impact. Finally, for those who have been looking for their next job opportunity, there are opportunities to work for yourself building your dream company. Historically in times of high unemployment there are more small business startups. Good luck.

Tags: change management, entrepreneurs, Executive jobs, industry news

Interesting survey result: one in four high-potential employees believe they will be working for another employer in a year.  This statistic is from a survey done by the Corporate Executive Board of the Corporate Leadership Council.  An article in the Harvard Business Review , May 2010 summarizes results and ideas for resolving some of these issues. 
The survey, done in September 2009, found that one in three high-potential employees (rising stars and high achievers) admit they don’t put all their effort into the job, and one in five believe that their personal aspirations are different from what the employer has in mind for them.  This in spite of the fact that most companies have some form of program designed to nurture future leaders, and with good reason, as these individuals have major impact on business results. 
The survey also found that the sense of disengagement of these employees has been remarkably high since the start of the recession.  Results suggest that as the economy rebounds and the labor market warms up, companies may see the best employees leaving in large numbers. 
Working with HR departments the Corporate Executive Board studied more than 20,000 employees that were considered high-potential at 100 organizations worldwide.  Findings show clearly that management teams stumble when trying to develop the next generation of leaders. 

Mistakes noted:
- Assuming that high potentials are highly engaged.  Disenchantment has increased since the economic downturn began, and so renewed efforts to engage these employees as well as regularly checking in with them is important.
- Equating current high performance with future potential.  The survey showed that 70% of the high performers lacked critical attributes important to handling future roles
- Delegating down the management of top talent.  If you leave the selection of future leaders primarily to line managers, the selection will be based heavily on current performance.  Suggestions are to develop a leadership program handled by the executive level to help both candidate and managers to understand future potential.
- Shielding rising stars from early derailment.  Just as in the education system where there’s a halo effect if you are perceived as a good student, rising stars are given more help along the way rather than being tested more rigorously.  
- Expecting star employees to share the pain.   Research indicates that under normal circumstances the star employee puts in 20% more effort than others in the same role.  Therefore, when salary freezes and layoffs occur, it is important to find a way to shield the top employees from that pain.  Bear in mind that other companies are scoping out your stars and may lure them away.
- Failing to link your stars to your corporate strategy.  On the other hand, don’t hide the pain from your high potentials.  Keeping them engaged means keeping them involved in the process.  Find ways to share future strategies on a privileged basis with your stars.

Finally, always make these high potentials aware that the designation is mainly an assessment of future contribution.  Don’t just celebrate current achievement.

Tags: candidates, change management, employee morale, Executive jobs, performance management