There is no doubt that we are going through unprecedented times. Not in over a century has the world faced such uncertainty. The pandemic we are facing is costing us hardships that, just over a year ago, would have been unimaginable.
Many of us have faced the ultimate loss with the passing of a family member or friend to this dreadful illness. However, for those of us that have avoided or survived Covid19, we face the economic hardships as businesses have a much reduced and cost conscious customer base. These businesses are being forced to do more with less resources. In addition, they will be struggling to keep their employees motivated throughout this period.
When faced with recessions many poorly managed, shallow companies resort to the only method that they can see to survive- cost cuts. Now while cutting costs is not in itself a poor decision, the manner in which costs are cut can be. Too much cost cutting can have a demoralizing effect, particularly when the reasons for the cost cutting is not explained to the workforce.
In previous recessions it was the companies that did the opposite to cost cutting that ultimately emerged victorious. In the 2008 recession, when companies were cutting costs left & right, Lego decided to expand into a global market. The company concentrated on building its revenues in Europe & Asia whilst the US faced economic disaster. As a result of this the company reached an all-time high profitability. This company did the opposite of its competitors, when the competition was down scaling through the recession, Lego expanded.
This action was not successful because of luck but because, with a dwindling customer base caused by the recession, Lego sought out other markets.
While your company may not have the ability, or the resources, to become a global player, the principle is sound. Ignore what the opposition is doing and identify what you can do to attract more of the shrinking customer base away from your competitors.
When I first got into sales, more years ago than I care to remember, my mentor and boss told me something which we have all heard but at the time was a revelation tor me. “People buy from People.” Even in today’s electronic, commercial world where you can download a book or a movie in an instant, without any human contact, I still believe this to be true. That being the case, our most important resource throughout a recession is our staff.
Many companies say the easiest way to cut costs is to lay off people.
Unfortunately, this results in a decline in the quality of service that you can provide to your customers. Remember, the customer base has declined, the customers that remain will be looking for a premium service for everything they buy. Why? Because there are fewer of them around and they will have more companies vying for their business.
They can afford to be choosey about where they give their custom.
This is where training can become the difference between a company that is successful during a recession and one that may not even survive the recession. Investing in your human resource during a recession will be beneficial in several ways.
As we have already identified, the customer base will expect premium quality during a recession. The use of training will make your organization a standout company. Whilst other companies may be laying off staff, thereby reducing the quality of service, your organization will be creating staff that will not only be outperforming the competition but will be outperforming their pre-recession selves. Improving the quality of your service through your staff is a cast iron way to survive.
It is a fact that during difficult times employees become demotivated. This can lead to an increase in sick days and a drop in performance. When people are unsure of their future, they lack the motivation and focus to perform at their optimal. However, when staff see that despite the current situation, their organization is investing in them through training, they will be highly motivated to apply the training into their roles to ensure that they can be high performing, valued, individuals within this company.
Through training you can make your staff motivated, effective and higher performers than they had been before the recession. Recessions can be seen as an opportunity to separate your business from the rest of the pack.
By investing in your human capital, through training, you can step out of the shadows and reach out to those customers that are still interested in purchasing your products and services. In addition to surviving a recession you can come out of it in a stronger position to recover faster than your competitors.
Training and improving your staff is the key to success both now and in the future.