I think we all know that we are in a global recession, so, any strategy — including a people strategy — won’t have the budgets they did when the economy was growing. BUT, that doesn’t mean you have to ignore a people strategy; it requires creativity to develop and implement. Here are some of my ideas/advice to consider this year…
Defer Cash Incentives…
During a downturn, keeping your cash flow healthy is essential for businesses. That often means you’ll have to find a creative alternative to cash bonuses.
Offering shares in the company is one way to delay cash bonuses until the economy rebounds and can work depending on the company’s structure.
For smaller companies, there’s the option to barter with other small companies to replace cash incentives.
The cheapest incentive that could be considered would be to offer additional paid time off.
Consider Making Remote Work Global…
During recessions, you want to offer other incentives that could make up for not being able to offer top talent, industry-leading remuneration.
For most employees, irrespective of their role, working remote in this new way of working, is enough of a benefit that a cut in compensation may be tolerable. You can add to that benefit by enabling talent to work abroad, provided they’re in the same time zone or meet certain KPIs. In addition, expanding your talent search across the globe can often make compensation more attractive.
Know Your Cash Peaks and Troughs…
Many businesses have cash flow seasons (us included), even if they aren’t in seasonal industries! Understanding your cash flow trends can give HR the ability to build projects around the influx and prepare for the slumps.
Match People Goals to Business Goals…
Rather than have your HR goals and projects separate from your business goals, ensure they are both entwined and support the other.
If your goals are to reduce expenses, consider implementing a strategy that identifies and supports your top performers, as that’s often where you can draw the most value without additional expense.
The most important aspect of developing a people strategy during an economic downturn is to communicate financial constraints to your HR teams.
Instead of instructing HR on what to cut, allow the team to be creative and utilise their expertise to meet the targets that you set.
People are most firm’s biggest asset. Identifying the right people to get on the bus is obviously key, but not only keeping them on the bus but continuing to engage and get the best out of them is vital to drive success through and out the other side of this downturn.
If you want some advice or to explore any of the key points raised here, please do reach out and book a time to chat.