By Claire West
With the threat of a double-dip looming, now is the time for senior business leaders to reflect on their experiences of getting their firms through the recession and put what they have learned into use.
Management consultancy Hay Group asked 161 senior decision makers in the private sector what they have learned during the recession.
So what did these senior decision makers cite as their biggest lessons from the recession?
Cut Once, Cut Deep, Cut Early: Senior business leaders found that once job cuts affect 5 per cent or more of the organisation, the impact on morale is the same.
As such, three rounds of cuts of 6 per cent can prove three times more damaging than one round of 20%.
Phil Kenmore, Director at Hay Group comments: “Business leaders must be decisive and make cuts in one single exercise if they can. A drip feed of bad news is devastating for morale.”
Protect The Core: More than a third (35%) of business leaders fear that cuts made during recession will damage future capacity. Firms must ensure that they protect their ability to deliver quality frontline services when deciding cuts.
Mind Your Talent: Industry leaders are concerned about the effect of damaged morale on employee loyalty and their firms’ ability to retain key talent.
Close to three quarters (71%) felt that staff enagagement and morale have suffered in the wake of cost-cutting measures (71%), and that they are “highly concerned” about retaining talent now the economy is in recovery (73%).
Not without good reason: three fifths of frontline staff (59%) are actively looking for another job, considering leaving, or have already accepted an offer elsewhere, according to separate Hay Group research.
Communicate Continuously: Senior managers stress the critical need to maintain open, honest and frank communication with staff throughout.
Phil Kenmore comments: “Uncertainty creates a vacuum which rumour and conjecture will fill. Talk to staff constantly, even when there is nothing new to report."
Plan and Prepare: The financial crisis hit the private sector with a sudden intensity — over a third (36%) of business leaders told Hay Group that they were not adequately prepared for the recession.
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