One of my best friends popped in for dinner last night. Over drinks we talked about how his business was managing with the financial downturn. Increases in unemployment, London riots and business difficulties were all discussed but I was delighted when he told me that his business was “Doing better than expected”. I heard about the new business plan that I expect will generate a healthy growth for the next year.

“What keeps me awake at night”
He’s managed to avoid laying people off work and whilst he wasn’t hiring people he was intending to restructure his team. The thing that was keeping him awake at night was that the restructure might cause some of his good people to leave. “I know jobs are hard to find right now but good people are still able to move quite easily” he explained.

5 Point Plan solution
After discussing much of the content of an article I wrote some months ago HERE for IQPC we talked about strategies for retaining his good people. In the end we settled on a five point plan. It would be specific to detail in this blog post but if you’d like to hear how we arrived at the solution then email me at stephen@assimilating-talent.com and we can arrange a SKYPE call and I can fill you in. 

It’s inevitable that as companies such as Barclays, Lloyds TSB, Marks & Spencer and even Tesco suffer reduced profits they are developing a strategy that reduces costs by reducing staff.
 
Such companies then create smaller working teams or integrate the remaining staff into other departments together with their responsibilities.

There is a hidden downside with this strategy.That is that often there isn’t enough time, or motivation due to a sense of emergency, to integrate the new team properly so that they are capable of being as productive as they might be.

Our research, over nine years, into individual and team productivity following the integration of new people shows that only 60% of such changes deliver the results that were anticipated.

Poor communication, lack of understanding of team results and changes in management style all contribute to the potential failure. The result is that costs rise, goals and opportunities are not met and this results in further downsizing.

Companies that are changing their teams need to consider that they are in effect changing the make up of the team dynamic and need to consider a integration period in exactly the same way as if they were to be introducing a new members of staff

This morning a number of people have contacted me over the headline that the Chamber of Commerce has predicted a rise in unemployment in the UK to three million whilst at the same time blaming the UK and US Governments as well as the banks for the situation.

It seems that people are now beginning to become angry at what is happening.

People are failing to understand how the UK Government is reducing benefits, cutting grants to students, unable to force banks to maintain loans whilst continuing to pay bankers their bonuses.

The tone of the telephone calls seems to be:

a) That as people feel they are having to pay (physically and through redundancy) for an unjust system of rewards to those that caused the current situation the more likely we are to have social unrest.

b) That people’s demands for protectionist policies such as reducing immigration will begin to increase in volume.

c) That if the tax cuts that are promised don’t satisfy the public expectation then there will be even more anger.

If Barack Obama wins the presidential election will there be a “feel good” factor affect both the markets and how people feel about their future?

and if there was a feel good factor will this soon disappear as the hard reality of the financial downturn becomes apparent and unemployment rises. 

During past financial downturns companies would rush to lay off staff as a means of saving money. As a result the time taken to recover was longer because of the need to re-recruit talent. Most businesses seem to be avoiding this mistake in the current financial climate.

However the question must be in people’s minds, “At what point will unemployment be the final option for survival?”.