Toughing it out during tough times

It never ceases to amaze me how people, particularly businesspeople can make such "textbook" mistakes in responding to difficult times such as the current economic downturn.

You often hear management telling their staff that they, the staff, other most important asset that the business has but many managers and directors reach for their "shedding knives" at the first sign of trouble. This is very short-term thinking and demonstrates a continuation of poor management practices and a lack of understanding of the cyclic nature of business.

Invariably it is a front-line staff (who are usually the most inexpensive anyway) who are "shed". What is really shed is corporate knowledge, experience and customer relationships. Companies which practice this style of human resource management will be the last to recover from the downturn (if indeed they recover at all) as they have to spend excessive amounts of time, effort and money rebuilding and/or retraining their workforce while their competitors get on with rebuilding their business and their bottomline.

Think carefully whether a temporary reduction in profit is a better long-term strategy than a temporary reduction in your talented, trained and loyal staff.

Harry