How has recession changed you?

Recession is almost over.. But, yes, corporate leaders know how bad it was... From riding on a growth wave and managing hyper-growth in some industries to managing no growth (or minimal growth) if not de-growth was quite a task. Wasn't easy - but to adapt and mold was inevitable.

The theme of 'recession' dominated the business world, public sector, non-profit sector and working communities at large; it also was so overtly used in the media that it's become a joke, or supposedly a funny answer to any question related to economy, jobs, or even individual finances. Needless to say - it did leave an impact on everyone’s lives.

After my previous post - Everyone thinks business, I kept thinking o'er the subject and couldn't really help elaborating further on how and what are the other areas that have changed in a common man's life due to recession. Living in my own little world and given my bounded rationality, I am thoroughly convinced that would be a significant change in the mindsets of at least the working folk across the world - thanks to recession.

• Freeze unnecessary spend, increase savings—The core impact has been on freezing unnecessary spending. With rising incomes in households, India has been witnessing a huge rise in spending—the flocking of many international brands to India holds a testimony to it. The news of recession saw such a panic that people lined-up out of the banks to withdraw their deposits and put a freeze on any spend in anticipation of absolute uncertainty.

• Longevity in jobs—Recession saw a very peculiar behavior at least in corporate India, where people were reluctant to change jobs, even in industries where attrition rates were the highest. Companies suddenly were posed with a new problem—how to deal with low attrition, when they were looking forward to shed some flab? 

• New workplace dynamics—workplaces have seen a lot of disruption through the recession period, and there will be new and interesting changes emerging. Moreover, a decade down the line, things will change quite significantly, as the next-level citizens at the workplace will profess higher ambitions, will be more diversity-friendly, cross-culturally adaptable, more networked, demanding flexibility among others.

• Higher Competitiveness—Given the current experience and the reality of future—everyone has had a taste of ‘survival of the fittest’. This has shaken up almost everyone that competitiveness matters a great deal, both at individual and corporate levels. 

• Prudence in Risk-taking— Everyone has come to know that excessive credit, multiple-insurances, undue mortgages, defaults on payments had at large formed the foundation for America’s biggest bank failures which set off a chain reaction leading to a total collapse of the economy. This has a great lesson for individuals—to exercise prudence when taking sales calls for a new credit card, personal / home loan or an insurance package; even in terms of shifting jobs, or even changing one’s cell-phone models often. I know of few who’ve started paying off their credit and surrendering their credit cards.

• Conservatism in vogue— With personal resources feeling a strain it may no more be fashionable to show-off the best of brands without as much utility. Spending & consumption patterns will certainly undergo a change. Than individuals, business corporate is more likely to adapt to this model for long term benefits—because the recession has put to test the strategies of all companies, and only the ones with a long-term conservative strategy have seen the least damage. 

• More jugaad—resources strained, inflation on rise, and India’s best on jugaad :) there will certainly be a lot of focus on how differently things can be done, and cost factors. Might give a rise to new trends socially and at business level too.

Well, I think I’ve written this longer than what I’d expected :)

But, as I always say and believe—human behavior is very unpredictable, and irrational at times. So, the above trends are just a predictive analysis of mine. As a reader, you may please do add, leave your comments as to what you think about – how has recession changed you?

Everyone thinks business..

'Twas in mid / end of second quarter of 2009 when recession started taking its toll in India, and companies got a shocking slow-down on their growth ride. The community of employees labored under the indecisiveness and knee-jerk reactions of their respective managements and while coping with it, some did survive, while the others were ejected to search for other opportunities.. That called for a trend, where, at least most (read all) of my friends, and friends' friends (including me) were thinking of starting up their own business...each with his own idea (not original ones, though).

About a year later, now, that the jobs market is open and recruitment agencies are witnessing a resurrected demand for employment, everyone's forgotten their (so called) 'dreams' to start their own business; everyone's now looking for a job; one that's paying better for the ones who're already employed.. Voila, was that something not expected?!?

Time's arriving for Employee backlash!

'Recession' is less cited to teams today in corporate India. The job market is up and coming. Everyone's a keen observer of the business and economic trends these days.

Employees lay low and even still as companies have used and abused whether rightfully or not the recession period as a chance to fire their employees, cut down various perks, even salaries, tighten the finance outflows and so on... To broadly define it, companies have done a great deal of restructuring whether in a planned manner or as a knee-jerk reaction - some interventions with high impact some low. Some strategically, some tactically; a few with long-term vision, and many blindly fighting issues at hand.

Read related posts:

• Psychological impact of recession
• Management indecisiveness costing employees!

In many of the communication that went out from management to employees through various media, their line managers, their HR managers, finance teams, many a psychological contracts were broken which has certainly left a lasting impact, and the management of corporate India said 'there's no jobs in the market, people won't quit anyway'.

Well, the jobs market is teeming with openings again, and time will tell how rapidly the graph would rise, and then, we'll see a high level of attrition, only this time, it'll be called 'Employee backlash'.

Everyone wants recession cover..

Given the times of lull in world business and the impact on top-line and bottom-line of organizations, companies have become extra-careful, even the overtly conservative ones (including Lalas) have gone ahead taking measures from announcing job cuts, pay cuts, umpteen internal cost cutting measures, right-sizing etcetera..

But, as they say, in business the rear-view mirror is clearer than the windshield. Most companies looking at the past year performance have announced no salary hikes for the coming financial year. On top of it, there's no significant inflation in India which demands a correction in salaries. That quite justifies action on any company's part. It's about time in a day or two that Indian corporate would start announcing posting to the public their financial statements, and it would be no wonder if most of them had shown significant achievement, if not achieving their set targets for the financial year 2008-09.

Organizations are certain they want to grow, and the results would show that they have grown and the future, though not as certain, fairly indicates that growth is assured. I believe companies should make their employees (they're pampered as talent assets) a part of their growth by showing some sign of sharing through increments if not bonuses (even as some companies have). How else would a company more emphatically reinforce their belief in their workforce? How else does a company assure that they are interested in the employees growth and not only the financial growth of the organization? How else can a company make sure the partners are actively involved in mutual growth without giving them a taste of the growth? There's no promises made for future even if companies do not want to announce salary hikes currently. Would that not be a question of will and just running for cover of recession?

I would like to do a little bit of analysis on growth of organizations, at least 5-10 big ones and see the impact.. but, let's wait till the announcements..

Crisis of Confidence!

It seldom happened that this guy spoke in fear.. He was a student-friend from IIPM who I'd met over a cup of coffee late evening today. Two years back he had got placed on campus he sounded so upbeat and very happy. He's had switched jobs about 5 months back for a better package and he was even more proud of his abilities, it was as if an air of arrogance surrounded him. But that was then, today his voice had an unknown fear.. fear of the unknown rather. His company's not doing any good business these days, his managers have less work, executives much lesser.

Bigger accounts have vanished in thin air, with his colleagues he was on the look out for smaller fish, lesser amount of business. Someone who would boast of acquiring accounts worth tens of lakhs is today talking of acquiring references of few thousands of rupees. Even zero rupees, but some potential customer reference... Recession is out there.. It's wild. It's got the minds of entrepreneurs warped, and fear of loss is everywhere.. My friend's confidence was at its worst crisis. It was not just the fear of losing the current job... It was beyond that.. The fear was of not even finding one if he lost it. His abilities, passion, confidence was of no use!

Challenges for Training function & Trainer’s Role in Global Recession

A talk by Dr. M.B. Athreya

Training Needs in a Recession Scenario—

• Strategising for slowdown: Companies need to evolve a strategy to slowdown their growth in the same manner as they would have planned for robust growth. The market trends may put a real squeeze on the survival of the company and hence a strategy for slowdown is an absolute necessity.

• Rightsizing for survival: Most of us have heard the terms downsizing, but do not mistake rightsizing for downsizing. While downsizing may be an absolute cut-down of manpower, many a time without much a thought to the aftermath of it, but rightsizing is a much more thoughtful and strategized action with a retention plan for high performers which ensures that an organization has optimized its manpower to see it through the recession times.

• Cost reduction: The focus of organizations will be great on reducing costs, and training may be one of the functions where budgets may get impacted majorly. Gone will be days when few days of training meant a nice vacation in a hill station or a swanky hotel. The training function also needs to look at this aspect seriously and assist the organization to reduce costs significantly wherever possible by cutting down on the frills associated with training.

• Retention Marketing: Various market trends and the social disturbances like terrorism attacks have also influenced the consumer buying behaviour, and it’s clearly emerging that companies will have to focus on retention marketing. The focus here is going to be mostly on retaining a customer even if the margins earned are lesser.

• Flexibility for upturn: In all the various HR measures to the see the organization through the pressures of global recession, the organization with a strategy and action plan for slowdown can retain the flexibility and muscle to revive and take an upturn when market show a positive trend. Organizations must not become so lean and weak in terms of market image that they have lost the ability to take an upturn when trends seem to change.

Trainers’ Role—

• Proactive alert to top management: Trainer’s role takes precedence when there’s an action plan proactively presented to the management. Training managers must be able to foresee the impact on the organization in the coming times and identify areas where the function can significantly contribute to the sustainability of the organization.

• Mobilising all employees & Create awareness of the big crisis: With tough times in the economy, and organizations across making different moves, there’s certainly an unrest that creeps into the employees mindset. Therefore, it’s very necessary to create awareness among employees about the recession, it’s impact and the uncertainties anticipated in the near future.

• Low-cost Training & Instant use of the Learning: A lot of debates have happened on this significant area in the training function - Measuring the results and the transfer of learning onto the job, but in tough times like recession, it’s time to exhibit the results in a more visible manner, and focus on the instant use of learning acquired from various training initiatives.

Action Plan for Training Managers —

• Prepare a recession training plan: Just as the organization needs to strategize for slowdown, even the function needs to draft a recession training plan to ensure that the function is aligned with organizational objectives and strategy for a given period of time.

• Note/Presentation to Top Management: A presentation may be given to the top management with the recession training plan to keep the chief executives informed and also to get their perspective and optimize the recession training plan.

• Train mostly with internal resources: Well focus on cost reduction certainly points out to identifying talent within the organization that can be used as internal trainers or training resources by selecting individuals from various functions and engagements and utilizing them aptly.

• Select external expertise: External resources always bring in a thought from the world around, and share the best practices from various other organizations, so wherever required, external expertise needs to be employed for training.

• Real time measurement of results: “The market will discipline the industry”, an expert spoke. It’s time to buckle up tight for the ride where questions on the result of trainings and return of investment will be plenty. The measurement mechanisms of training function also better be in place to justify the same!

Profile of the Speaker:
Dr. Mrithyunjay Athreya (M.B. Athreya) is a Management Advisor of great international repute. He has a doctorate in Business Administration from Harvard Business School, USA besides being a Gold Medallist in Cost Accountancy. He taught at Indian Institute of Management, Kolkata, London Business School, and Scottish Business School. He has been Director on many corporate boards. He has acted as Chairman and Member of many Government Policy Committees. Particular mention may be made of Athreya Committee on Telecom Sector, which paved the way for Telecom Revolution of last fifteen years.