Don't Take Advantage of the Bad Times

Recessions have silver linings for those who manage large numbers of staff. For the past few years finding and hanging on to good staff, at reasonable salaries, in Moscow, has been a nightmare. Suddenly it has gone from being a employee's market to an employer's. What does this mean in practice? How far should one take advantage of this situation? And how should one prepare for the next upswing and renewed pressure or shortages of good staff?

In this climate, one of the worst recessions we are all likely to experience, ever, there is unfortunately no limit to how far a ruthless employer could push its advantage: reducing salaries, imposing higher workloads, replacing even marginally uncooperative employees. … In practice this is all possible; and in Russia there are no shortage of ruthless employers both in international and local companies. We hear of stories of employees being asked to do the work of two or more colleagues if they want to keep their jobs, with many too frightened to refuse.

Of course to go to such extremes is not ethical, and also it is not wise from a purely pragmatic point of view too. Everyone's memory is long enough, so that if the implicit understanding between employer and employee is breached then you can be sure that they will be off at the first opportunity whenever that comes. So what is fair and what is not ?

Our experience is that the recession should be used to redress aspects of work discipline which fall short of the ideal, but not to go beyond this; and a good measure of what is fair is what can be explained and agreed with employees themselves. We have simultaneously advised a consumer goods company suffering "only" a 10% downturn not to change their basic standards of work, while at the same time advising a machinery producer facing a 30% downturn to drastically improve employee productivity by reducing staff and rebalancing (i.e. increasing!) work for the remainder. In the second case it is a matter of survival and can be explained to all employees, in the first it could not be.

Furthermore, a good HR department will actively intervene to prevent abuses if necessary. Now is a good time to establish, or re-establish, those motherhood visions of work ethics and give them real meaning.

Now is also the time to reshape the implicit understanding, and mutual expectations, in ways that will build loyalty for the future. "If you help us get through this we will look after you" is the basic message which every company has to interpret according to its specific needs and position.

And there is one more thing to use the recession for in terms of staff relations – get some meaning into, and value from, performance management. In the boom times we saw so many performance management systems lacking credibility and falling into disuse. Dusting off and re-launching is not good enough because its credibility has been lost. Now is the time to readdress the basics and establish something that will work in your company in its context. Not some ill-considered transplant. However this is a bigger subject to come back to.

Senior managers are always partly HR managers, in boom and bust. It is in recessions that big opportunities lie provided one is not too greedy.