A global economic recession is not just going to affect your cash-flow — it is also going to have a huge impact on your manpower planning. Recession HR is going to be even more challenging for China managers than boom-market economics. Your goal — keep the best you’ve got, let the underperformers go, and pick up some cut-rate gems with MNC experience.

The good news? There will be more talent out there for those with cash, strong brands and clear growth prospects.
The bad news? Not all of us have cash, strong brands or clear growth prospects.

Recruiting, hiring and retaining key people in a recession is a double edged sword. The men and women of your dreams are being freed up by down-sizing, bankruptcy, curtailed expansion plans and normal attrition. On the other hand, your own key people are reassessing their chances of prospering in your company.

Recessions aren’t fair - some businesses will sputter and die while other similar businesses survive and even get stronger.

The China HR Recession Two Step.

How do you hold on to the best, ditch the rest, and still have money, time and resources left to go hunting for diamonds in the rough?

Step 1: Hold on to your Aces
Your first step is to manage the resources you’ve already got. Nothing is more damaging to morale and smooth operations than constant turnover and restructuring. It saps the confidence of your team and makes you look like a panicky amateur.

Here’s a pattern you’ve got to look out for:

First a few staffers and junior managers with good potential - but not much experience or real performance yet - either take other jobs or drift off to school, travel or completely different industries.

Then the real stars in your organization will sit down with you after Chinese NY and tell you that they are going back to the west, going back to school or taking care of their sick aunt in Fujian. The ones who have better options will take them.

And now you’re left with a team of people who either aren’t able to find anything else or aren’t motivated enough to look. You’ll also have plenty of dead-weight staffers who have read their labor contract and think that you’re their safe haven in the coming economic storm.

The cheapest, easiest and most effective way of maintaining profitability and surviving the recession is to hold on to your core team and make them a stronger, more cohesive managerial unit. Sure — you’re all nodding your heads and saying “of course”. But are you really doing it? Are you making your people feel like they have a strong role in the company. OR are you putting more pressure on them and cutting back on “expenses” like company lunches, drinks and coffee in the kitchen and expense reimbursement? Are you making them fear for the future of the company? Are you pissing everyone off by demanding more and delivering less.

Holding on to your key people means walking a thin line between confidence in the future and being transparent and open about the state of the business. You can’t pretend that everything is great if orders are off by 30% compared to 6 months ago. On the other hand, if you are clearly stressing out about the company’s prospects then so will your team.

Next: Recruiting and Hiring in a Recession

This entry was posted on Wednesday, October 15th, 2008 at 9:49 am and is filed under Managing in China, Bear wrestling. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.