American psychologists describe the state of “flow” as a condition of heightened focus, productivity, and happiness that we all intuitively understand and hunger for. An avid rock climber, thought of this when he was inching towards a particularly challenging peak. That set him thinking about the positive states, the moments when human beings are at their absolute best. Indeed, the best moments usually occur when a person’s body or mind is stretched to capacity.
There is a definite impact and 2009 will be universally different and more difficult than 2007. Leadership will be stretched for direction and results; management will be tested for fortitude and having a balanced head on shoulders approach to keep momentum going.
Experts contend that in this scenario, companies can maintain their attractiveness to internal and external talent by using a portfolio of actions with the right blend of short term and long term focus. We believe that the changes in the market and the business environment would require companies to review employee related issues more closely – primarily areas of hiring – redeployment – managing surplus workforce and all employment related costs – whether direct or indirect.
Organizations will not only think differently as far as engaging the employees is concerned, but will also give due diligence to rewards and compensation. Salary growth will be the first casualty of de-growth especially variable pay which may become vanishing pay. New labor will be available cheaper than past.
Organizations are likely to realign their compensation strategy with a bias towards variable pay, particularly for senior management. In line with the general market conditions, increments and bonuses could be lesser this year as compared to past years. But organizations will need to balance the need to be competitive with respect to their remuneration structures.
Industry experts agree unanimously that companies that are reducing staff must focus relentlessly on the internal cultural and external reputation implications of these cost cutting efforts. It is possible for companies to hold on to their people and get them through this but each company would need to evaluate the extent of impact on its operations and take action as may be warranted.
Studies have shown that although overall levels of recruitment may level off or even out, the quality of workers hired rises in recessions. Now more than ever the slogan should be ‘find waste’ and let employees do this. They are best positioned and also most affected by this. Then there will be lesser cause to have this ‘done on people’. As a fire from the hip reaction, cost cutting reeks of our having non-productive ‘cost’ that were ready to be cut, in any case. If however, output expectations have changed then input costs need to be reviewed. The big point is sustainability. Is business there for serving society or, does society exists to serve the needs of business? We all need to get this alignment right. This is the biggest lesson. Some learning that companies can derive: organizations should focus on creating better work processes that reduce need for additional recruitment or enabling suitable redeployment of the existing personnel. Smart companies in 2009 should try to create a culture of innovation across the organization which would help companies emerge stronger.
Future of work:
Downturns can be a time for wrenching transformation for companies and industries. Organizations will, in the months to come, identify recession related risks and opportunities. Recruitment could become project based in anticipation of future growth. Compensation packages could reflect the true financials of the business. Companies will focus on optimizing resources leading to a preference for individuals who have multiple skills and can multi task. Companies trying to cut costs will encourage employees to work from home.
The key therefore is to keep your eyes on the prize, finish strong while also moving progressively into 2009.