Businesses that are handling the economic crisis well tend to take a longer-term approach to thinking, communicate well with their staff and genuinely try and find win/win solutions for both the business and employees.
A recent survey of senior executives, which examined the best and worst business practices during the global financial crisis relating to staff management, found that there was an overwhelming belief that those businesses that were more transparent and communicated well with staff have managed the crisis better.
“While most of the executives we surveyed recognised that inevitably companies need to make tough decisions in the current economic situation, the criticism of business stemmed from how those decisions were made, communicated and implemented,” said Jane Neale, director of executive search firm Hattonneale, which conducted the survey.
“Many companies were making short term, knee-jerk decisions and the executives we surveyed believed that these companies would be on the back foot and under-resourced when the economy turns.”
Conversely, senior executives said there were a number of poor business practices in a recession, including: using the global financial crisis as a smokescreen for changes that should have been made previously; overreacting to economic conditions by cutting costs too quickly; mixing messages to staff, shareholders and the public (such as paying large bonuses to executives while laying off staff); and neglecting the human side of decision making, with no regard for the long-term implications for their corporate reputation and brands.