As The Economy Turns. . .

Posted on June 18, 2009

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greenshootsThe past couple of weeks have brought some slightly better economic news – the stock market has performed well of late, and the most recent unemployment report was better than expected. There certainly seem to be more of the proverbial “green shoots” that would indicate we are near the bottom or, possibly, have even turned a corner.

One thing that we know for sure is that, at some point, the economy will begin to grow again and companies will move from cost cutting mode to growth and hiring mode. Employers would be wise to start laying the groundwork for that shift now so as not to be behind the curve when the economy does begin to accelerate.

One good place to begin is to evaluate how a company is communicating and engaging with its current employees. A blog post by Liz Wolgemuth — thanks to David Ballard (via Twitter, @DrDavidBallard) for the link — discusses a recent survey that found that 54 percent of employees say they are getting ready to start looking for a new job once the economy turns around. She writes:

[M]any American companies have done themselves no small amount of harm (in talent retention) during the downturn. The recovery may be hardest for employers that clipped wages, slashed payrolls, snipped benefits–and neglected to preserve a healthy workplace morale.

Holding on to key employees is a lot cheaper than hiring and training new employees. The companies that are going to come out ahead once the economy picks up are those that do (or did) two things:

  • Cut strategically, and only where necessary – Firms that made cuts (whether in terms of laying off employees, or cutting pay and benefits) in a measured, strategic fashion will be in better shape than those that cut with a less strategic vision.
  • Communicate and engage – Companies that have been diligent in communicating with and engaging employees will be more likely to have employees who feel a degree of loyalty and will be motivated to hit the ground running once conditions improve.