There are a lot of gloomy headlines regarding the economy, and Indiana businesses are watching the skies for signs of an impending storm. Thankfully, a majority of the business owners I’ve talked to say they can survive an economic shock with what I call a “fortress balance sheet.” These businesses have solid cash reserves, strong capital ratios and solid company credit ratings. However, if they want to thrive instead of just survive, companies should invest in their greatest asset: talented employees.
When we hear about an economic downswing, we usually hear about layoffs or hiring freezes. Employees are reduced to a cost on an income statement, while their long-term intrinsic value is overlooked. This long-term value is the true asset companies should be evaluating, and here are three reasons why businesses should use this time to identify and acquire talent.
First, this is an ideal opportunity to shape company culture. Identify those employees who want to be there as opposed to those who just want a job and give proven staff a reason to stay. Consider moving them into bigger roles and aligning their salary to market worth. This will generate more buy-in to the company’s mission and demonstrate to all employees the work they do is valued.
If a talent gap exists in your current workforce, find someone who can fill it. A lot of talented workers are either underappreciated or let go when business struggles. Yes, you will be adding to your payroll, but remember this isn’t about your headcount. One talented worker can change the course of a company and can be more valuable than adding a hundred workers at a lower cost.
No matter how you go about shaping company culture, make sure it’s done with transparency. Tough conversations will take place, especially with underperforming staff who may not fit in. Everyone needs to know why decisions are being made so all staff knows management is willing to do this together.
Secondly, this is a great time to implement technology to make company processes more efficient. This may sound counterintuitive to investing in talent, but we all know technology is only as good as the people using it. Time and again, I’ve seen companies spend a lot of money on a new CRM system or project management software but never fully realize the benefits from it because employees don’t receive proper training, don’t buy in to its value, or the tech is not properly maintained. Only an expert with good people skills can directly affect this. Their worth is magnified by maximizing technology’s efficiencies.
Finally, investing in your talent now will set you up for the eventual economic upswing. The talent and the technology implemented when business was down provides flexibility when the market picks up. There will be business opportunities only individuals with talent and a vested interest in the company will recognize and capitalize on.
If we could predict the economy, we would all be rich. Even in uncertain times, deepening your talent pool, building company culture and maximizing technology will strengthen your business and position it for greater returns in the future.