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Operating in Challenging Economic Times is a Balancing Act
by: Dr. David Hyatt, President and Partner
Rumor has it that the deepest recession in 70 years is over and that the US economy is showing signs of returning to growth. While this is good news and will have many of us breathing a tentative sigh of relief, the rest of the news is much less upbeat. As we all know, this recession resulted in a significant number of lost jobs and the projections are for unemployment to hover around 10% for some time to come. Further, when unemployment does start to drop, there is more and more talk that there will be a “new relationship” between employees and employers and it is one with fewer benefits, less stability, and more risk. The writing on the wall is that the “good old days” of employee benefits are not to be seen again (at least in the near future). Given this situation, we find ourselves at the cross roads we often visit in this newsletter: are we going to lament the situation or figure out how to move forward and do what we can to ensure that we are able to care for our people (our customers, employees, and shareholders)? Not too surprisingly, our focus will be on moving forward.
While most of the research around the impact of the recession has been on the jobs lost and the unemployed, we must ensure we do not lose focus on the jobs (and employees) retained. Our previous newsletter touched on research showing that significant numbers of employees are biding their time, waiting for the upturn, and plan to seek other employment when the economic outlook brightens. In addition, there is significant research available on “survivor guilt” and the impact that keeping a job in the face of layoffs has on the “survivors” of an organization. These findings make it even more important for leaders in this economy to create a sense of community in their organization. Just as in any relationship, providing an opportunity to hear what is on the mind of your employees will allow you to act in ways that ensure your people feel valued. In addition, opening the dialogue with your employees ensures that you can correct any potential misinformation that is circulating in your organization. As we all know, in the absence of information, people tend to fill in the blanks as a way of making sense of their situation. Better to know what is out there so you can address it than to let it develop a life of its own. Our first article shares some insights into one option for opening the channels of communication and building the community you will need to move your business forward.
Creating a sense of community is only part of what it will take to thrive in the new economy that will unfold over the next several months. An equally important element will be ensuring you have the right people in your community. A significant result of the new relationship between employees and employers is that there will be fewer employees who will be asked to deliver the same or better customer experience as before. The simple reality is that your customers will not give you a “pass” for a poor experience just because you had to lay off people to stay in business. In fact, and a consistent theme in this newsletter, your customers are even more discerning than they have been, less willing to part with the dollars, and will hold you to higher standards. All of which requires that the leaders of your organization (that is, you) ensure that you have right people in the community you create. Employees who are skilled at doing their jobs and who are passionate about delivering your intended customer experience will be critical to maintaining and growing market share in the coming days. Our second article discusses this issue more fully.
Building Employee Loyalty Starts Now
by: Dr. Leanne Buehler, Lead Product Manager
It’s a tough year to be in the workforce. Employees are faced with layoffs and pay cuts, while at the same time employers are requiring longer working hours and increased productivity. As a consequence, employees are starting to have second thoughts about their employers. In a recent study, 40% of employees reported they do not feel loyal to their employer and 23% said they are likely to leave their job within the next year. (CareerBuilder.co.uk Survey )
These statistics are alarming, especially because strained budgets require consumers to be more particular about where they spend their hard-earned dollar, making it essential to have the best people in place to deliver extraordinary customer experiences. Doing so requires a focus on employee retention to ensure the best people stay and thrive with your organization.
The first step in improving retention is to understand the state-of-mind of your workforce. This can be as easy as having conversations with your direct reports about their experience. Explain to your employees that they are valued and start a dialog about what is going well and where there is room for improvement.
Although open dialog is important, some employees may be hesitant to be completely honest when speaking with their supervisors. Another method for obtaining employee feedback is through the use of surveys that give employees the opportunity to provide anonymous feedback about their work experience. This process was recently used by an area manager of a large restaurant chain. To help him understand the mindset of his staff, he asked employees for feedback via an experience survey. From the results, he learned that a significant number of people were planning on leaving because they were dissatisfied with their supervisor. As a result, the area manager was able to address the issue head on. Had he not asked employees about their experience, it is likely that he would have lost some great employees at the expense of the customer experience.
Putting an employee retention plan in place can sound like an overwhelming task. However, getting started is as simple as asking your employees about their experience. Once you get their feedback, it will become more apparent where to focus retention efforts. Focusing on retention is important now, so when your employees have the opportunity to choose where they want to work, they will view loyalty as their best option.
You Can Trim Many Things, But Not the Customer Experience
by: Rhea Costandine, Marketing Manager
It is a common practice in the current economic conditions for many companies to search for ways to “trim the fat.” No matter what type of business you are in, the stories are alike; companies are looking for ways to tighten their belt around costs, operations, and overhead. In the past, success was measured on clear growth objectives: increasing revenue and expansion. Success for businesses of today (and in the future) requires a new type of mindset. Not only must you limit your exposure through hard costs, but a greater focus must be centered on keeping the loyal customers you have developed over the years and capturing the attention of your competitor’s customers.
You may think, that’s a great idea, but how can my business accomplish this? And even more importantly, if my business could achieve this, would the benefits pay off? Clear answers to these questions lie in articles recently released in the press. For example, a story published on CIO Today notes that it is, “harder than ever to separate customers from their dollars, customer care and the buying experience are more important than ever” and if the customer views the experience as “unrewarding” the customer most likely will sit on their money and not purchase at all. The implications of this new type of consumer mindset are critical and suggest that if you cannot provide your customers with the experience they want from your business most likely your profits will suffer.
To combat this deadlock in consumer spending, it is imperative you have a a clear understanding that a large part of the experience you deliver is dependent on the people who care for your customers. Creating the strong emotional customer connections that drive traffic and loyalty requires people who are willing and able to genuinely go above and beyond to meet your customers’ needs. Hiring assessments are an effective way to find the right people who are able to deliver your intended customer experience. This will also increase the chance that your new hires will stay and fit within your company’s values. Selecting the right people during lean times is one of the most effective ways to provide the service your customers want and more importantly expect. And, there is a great deal of valid research showing a great customer experience adds up.
So what does this all mean? Simple, while it is necessary to cut cost in order to survive, diminishing your initiatives around the level of service you provide for your customers is not one of them. In fact, it could be very costly to your bottom line.
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