By Derek Irvine
Tough times often bring some interesting dilemmas for company leadership. I saw an article out recently from Strategy+Business that argued for strategic hiring during a downturn. Particularly interesting is this seeming paradox of investing in one area of the company while other areas are experiencing layoffs. The obvious question from an employee perspective is why new people are being hired when others in the company could be keeping their jobs.
This got me thinking about another potential paradox of tough times that leaders can face: the need to emphasize the value of a human workplace culture while also making difficult decisions and operational cuts, often directly affecting compensation and benefits. And yet, like in the article above, it’s a smart decision.
For individuals going through these changes themselves, however, it can be hard to see how those two aspects might fit together into a single cohesive strategic direction. They may question why investments continue to be made in programs that contribute to a human-centered culture when cuts are being made to benefits and bonuses are frozen. To be sure, that is not an easy place to be in for anyone involved, including HR and company leadership.
From a leadership perspective, the apparent paradox stems from one of the chief challenges of guiding the company through a downturn. On the one hand, there are new business imperatives and structuring that will position the company to effectively respond to the changes in conditions- internal, external, or both. On the other hand, there is some level of stability in the work that still needs to be performed and in how productivity is achieved by the workforce. The risk during a downturn is emphasizing the former at the expense of the latter.
A human-centered culture helps to shift some of the emphasis back where it is needed. It provides a type of rudder for navigating all of the changes taking place, adding a degree of stability and direction. It ensures that employees do not respond to uncertainty by withdrawing, but rather enables them to continue to see the value they have to the organization despite the challenging circumstances.
As some of our recent research has found, a human-centered culture emphasizes the connections between employees and the purpose behind work, both of which help to buffer against the pain of changes and will ultimately enable the organization to rebound with an engaged and resilient set of employees. One of the primary mechanisms through which that happens is recognition: employees who are more frequently recognized are between 1.5X and 2X more likely to approach change with excitement or confidence compared against those who are never recognized. They are also almost 2X more likely to trust senior leadership, which is crucial for navigating the challenges of tough times.
What other strategies have helped your organizations to deal with tough times?
About Derek Irvine
The VP of Client Strategy and Consulting at Globoforce, Derek Irvine is one of the world’s foremost experts on employee recognition and engagement, helping business leaders set a higher vision and ambition for their organizations. As a renowned speaker and co-author of "The Power of Thanks" and "Winning with a Culture of Recognition," he teaches companies how to use recognition to proactively manage company culture. Derek holds a B.Comm and Masters of Business Studies from the Smurfit Graduate Business School at University College Dublin.