When cash is king and people are not.

Why do we treat money like gold and people like scrap metal?

During the recession, it was all about cost cutting and people were the first ones on the chopping block, whether it was a cut to their hours, pay, training or entire jobs.  Unfortunately, CFOs forgot that living breathing people are required for an organization to make money.  Money in itself does nothing.  Even when it’s sitting in a bank, a person is needed to make a decision where the money will sit to get the best return, otherwise it will just lose value over time.

Of course, leaders had to make tough decisions to manage their organizations through the recession in order to come out alive.  However, many of the cost cutting decisions were short-sighted and now that fact is becoming clear.  In this new story, CFOs say the biggest lessons they learned about the recession is to pay more attention to morale:  http://rhmr.mediaroom.com/morale.

According to the Conference Board, employee engagement has taken a dive over the last year.  It wasn’t hard for employees to become disengaged when they were asked to do much more for less.  You know what that means… I’m no fortune-teller but I see the future and it includes huge turnover.  Consider the HR function as part of this group.  This poll originally published in this article is showing signs that your own HR department is not immune to some staffing changes in the near future.  Up to 1/3 of HR folks are considering leaving their organization in the next year.

View the HR Turnover Poll!

With good reason, CFOs were focussed on getting through the recession by managing the bottom line.  However, they cut in the wrong places and without considering the impact of their decisions on their people.

Sure, lots of people were just happy to have a job during the recession regardless of the pay cut and longer hours.  But where was the longer term thinking?  Pretty much everyone knew that the economy would eventually bounce back and there would be some job growth.  Knowing that that magical moment would arrive some day, did they really expect people to be loyal and continue working with them when things got better?

People make rational decisions (for the most part!) and will take advantage of opportunities thrown their way, like a better job offer with a different organization.  Ultimately, that means it’s going to cost the organization in turnover and potentially its competitive edge.  Alternatively, if you’ve laid off your staff in this recession you’re going to have recruitment issues because you’ve sent the message that you’re unstable.

This video is for the bean counters.  Sure, errors of judgement were made but they ‘fessed up, discussed what they learned and what they could do better next time.  What did HR learn from this last recession?


Helen Luketic is the manager of HR metrics & research at BC Human Resources Management Association. Besides editing this blog, researching, and running the HR Metrics Service, she’s recently bought a new set of golf clubs at Costco that she’s been eyeing for months.

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