Recent reports from Fitch forecast that the economic growth of major advanced economies is to remain weak, with only a slow increase to 1.4 percent and a slight acceleration to 2 percent in 2014. They also predict Eurozone growth of only 0.3 percent in 2013.
This, of course, has implications for recruiters, as slow economic growth reflects slower business growth in terms of revenue and invariable headcount. Reports suggest that the US had virtual hiring freezes throughout the year and that growth in new jobs is still slow, which suggests many hiring freezes are still in play/or coming into play.
However, one interesting figure to emerge from all the gloom came in the unlikely form of a report from the US Labor Department, which came out in early September. The report showed that US worker productivity levels increased by 2.2 percent, which is 1.2 percent higher than last year. This was in a climate where US companies’ profits generally increased and output increased by 1.7 percent.
So, what’s the secret? How are companies managing to do more with less or the same? How are they raising productivity levels in an environment of limited hiring? I don’t have insight into the exact approaches these businesses have adopted; (and I guess some of it may be due to overtime) however, since hiring freezes are still a live threat for all recruiters, I thought it would be useful to set out several approaches that firms can adopt which may help to raise or maintain productivity during a hiring freeze.
1. Manage and Reduce Uncertainty So Employees Are Not Distracted From Work
As soon as a partial or complete hiring freeze is announced many employees will start to fear that the company is in financial trouble and that there may be lay-offs pending, which will lead to uncertainty, worry, reduced morale, gossip and a possible reduction in productivity.
So the first step is not about raising productivity, but preventing it from declining as a result of the announcement and the ensuing uncertainty.
Its hard to know exactly what each employee’s fears will be, so engage with them on various levels, e.g. one-on-one meetings, town hall meetings, team meetings, set up a social media ‘Ask The CEO‘ page where employees can ask the business questions and be publicly responded to — and hopefully have their concerns addressed.
Naturally, tailor this activity to suit the gravity of the announcement and the extent to which the whole organization is affected. I am not suggesting that you call out the National Guard because you have a three month hiring freeze in an isolated area of the business, but some action may still be needed.
2. Create A Shared Vision/Common Goal That Managers and Staff Can Work Towards
Having answered questions and allayed concerns you may have removed the uncertainty but you may have created a vacuum which could still lead to a level of paralysis and reduced productivity. This vacuum needs to be filled with a shared vision, which is one of the cornerstones of motivating teams.
It is now time for the business to create a common goal that takes into account the hiring freeze and which is still inspirational and one everyone can work towards.
Typically, the end of the hiring freeze will be linked to the company meeting certain business targets relating to productivity, revenue and profitability. There you have it then, a common goal for the business. Therefore set out and clearly communicate those targets and then you can charge each employee to raise their game so the business can reach those targets, thereby putting them back in control of their destiny, to some degree, and at the same time showing them the light at the end of the tunnel.
3. Lead By Example
Employees will take their cues for how serious the situation is and how much they should commit themselves to the cause from their managers and senior leadership. If the authority figures are seen to be giving extra, it will inspire and energize other staff to do the same. It also works in reverse; if the managers/directors show fear, anxiety or low morale this will be infectious and damage the morale and productivity of the team. So, ensure your leaders are supercharged and seen to be supremely committed to the cause.
4. Re-align Goals Or Set New Goals For Staff Where Necessary
As a result of the hiring freeze and new goals, the business may have to adjust its commercial targets and this follows that the employees targets/goals should be adjusted and realigned to suit the new business environment. If output needs to increase by 5 percent, then individual goals across the business may need to be realigned. It may be that longer term goals (which promise no immediate return on investment), are shelved, put back or softened to enable an increased focus on the immediate, more critical goals. Done well, this goal setting may help to reinvigorate the team, sustain and even increase productivity.
This is the first in a two piece article on how to manage productivity during a hiring freeze to maintain output and increase profitability. In this article we have focused on how to potentially prevent a decline in morale and how to maintain productivity.
In the second part of the article to follow, we will focus on several ways in which you can potentially raise productivity/output during a hiring freeze which include looking at areas such as innovation, telecommuting and more.
I’d be keen to hear any additional methods that you have to maintain/raise productivity.