This week it hasn’t just been the weather that has been bleak, the UK economy looks set to be heading towards a certain recession.
What with renewed talks of the credit crunch and major companies such as Bovis, Persimmon and Siemens announcing job cuts it appears that all industries are definitely on a sticky wicket.
To drain UK firms’ half-full glass of confidence even further a recent survey conducted by a UK recruitment agency found that 51% of all types of employers believe they have adopted the wrong strategy to deal with the economic downturn.
The scale of the economic unease that faces the UK has been largely debated, with predictions varying greatly.
However, they all have one message in common; management is going to be key to how organisations will fare through this stormy period.
An obvious tactic that many organisations adopt when facing economic uncertainty is to limit the amount of spending; swapping to a consolidation approach.
This is particularly true of HR and training spend. This can actually be more costly to an organisation as by pulling / reducing the level of investment in employees can create many problems, which include:
· Lowered confidence and motivation by employees towards the organisation, which inevitably will result in lower employee loyalty; potentially leading to a higher staff turnover
· Act as a warning sign to employees about the stability of the organisation regarding the future of both the organisation and the employee
· Potential skills that could aid the organisation through challenging periods would not be utilised due to the lack of investment; this could cause frustration within the work place
Righttrack Consultancy, a learning and development specialist with over 20 years’ experience in designing and implementing management training in both the UK’s public and private sectors as well as internationally, is generally pleased that the level of importance placed on learning and development in these times is still recognised by some organisations.
Kasmin Cooney, Righttrack’s Managing Director, says:
“It is those organisations that are continuing with their learning and development as part of their overall HR strategic focus that will be the ones who have not only survived but be in a strong position to hit the ground running when things become more stable.
Management and leadership are vital skills that are inherent in tense business times.
Ensuring the team is pulling together, with a strong understanding of the situation and what is needed can only be achieved through strong management and leadership; the lighthouse quality in a treacherous storm.
Conservative spending is expected and a good policy in these times as long as it is the wastage that is cut, however a clamp on all spending will only stifle organisations, creating more problems than just the external environment.”
Organisations are well accustomed with the benefits of management and leadership so to stop investing because the outlook is not rosy makes no business sense.
After all, the old proverb ‘speculate to accumulate’ does make a lot of business sense. The key towards spending in this situation seems to be everything within reason!