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Mixed Messages: What Economic Recovery Means for Employers

By Kelly Tanner

We could all be forgiven if the latest news on the economic recovery in the new year causes us to need an aspirin and a lie-down.

Initial flings for unemployment are back up an unexpected 36,000 new filings in the latest report, way over the expected 4,000.

But wait – maybe not. Those numbers may reflect November and December claims that states have been too backlogged to process before now.

On the other hand, other reports indicate that jobs are so scarce, those with shiny new degrees have chosen to go to graduate school to buy themselves time, and, hopefully, more opportunities.

Is it better in the UK? Apparently not. The Guardian doesn’t mince words – “Jobs Blow for Graduates As Companies Refuse To Hire.”

According to the Society for Human Resources Management, however, hiring will outpace layoffs for the third month in a row. As one of the Human Resources professionals included in that survey, I can agree that that optimism is not misplaced, at least from my perspective.

Cautious Optimism Growing – But What Does that Mean for Employers?

As a cautious sense of optimism grows within companies that are full of employees experiencing stress fatigue after a period of layoffs, furloughs, and wage freezes, how should employers manage expectations for the coming year? Certainly employees are anxious for some good news. The message last year was an unequivocal “just be happy to have a job”, and sacrifices were an accepted necessity to get through the rough patch. This year, however, as employees see an occasional new hire being shown the ropes and profits up over last year, people are asking if they will be rewarded for those sacrifices, or whether maybe it’s time to look elsewhere for job opportunities.

Unsurprisingly, most workers are reporting that they are dissatisfied with their jobs. A Careerbuilder survey shows that one in five employees plan to handle this by jumping ship sometime in the next two years, and many have begun seeking work already. Yet many employers, not yet confident in recovery and still adapting to “the new normal” through spending cuts and streamlining of the business, are not responding quickly enough to the shift in employee morale and engagement. The drumbeat of “you should be happy to be here at all” is still the primary, and only message employees are hearing, and they have begun to wonder if the grass has grown greener elsewhere. These employers will begin losing their top workers in 2010.

The employer message to its workers must ride a precarious balance, between communicating company successes and renewed health, to keeping expectations realistic as growth comes slowly and further sacrifices may yet be necessary. The rewards should be meaningful and positive enough to retain top employees, and sacrifices made by employees should be acknowledged. Yet the message that no one is fully out of the woods yet must also be conveyed honestly to avoid complacency and underperformance, and to prepare workers that the good old days of previous decades may be history, as we cannot yet tell where the next wave of economic prosperity may be coming from.

Employers without a healthy and effective Human Resources department should take steps to remedy this as their first priority. An HR team should be a conduit to communicate the company’s mission to employees, and to actively promote career development for employees through work-life balance and rewards systems. They should also be at the front lines during layoffs and cutbacks, to ensure retention of those remaining while smoothing the way for those heading out the door quickly yet compassionately. They should also be able to relay to management and C-suite staff where energy and resources would be best spent to maintain employee engagement and productivity. If the HR department is not functioning as an asset to the company, this should be the first place to consider an overhaul. If the Human Resources team is effective, the next step is to ensure that they have a seat at the table and support from all levels of management.

Next Steps for Human Resources Professionals

Human Resources professionals in turn should be having their busiest year in 20 years. Employee retention plans should become their top priority, with areas in high risk of loss identified and addressed sooner rather than later. Compensation packages should be reviewed to ensure that they are adjusted for current market rates and that increases and rewards are given strategically. If employees do not hear from top management regularly, now is the time to communicate messages directly from the Chairman, President, or CEO. Thank employees for picking up slack during the difficult year of 2009. Prepare them for 2010. Ensure that they feel that they have been part of the recovery, not merely the victim of the downfall.

Employers can alleviate some employee fatigue just by paying attention and acting swiftly. Underperforming employees must be identified, put on notice, and given the opportunity to improve. For many, the past year has been difficult, and some employees need to be reminded to get their head back in the game, so to speak, by reconnecting with the reasons why they chose their career in the first place. Given opportunities for creativity and encouragement from managers, plus career development efforts from HR, many will rediscover their own jobs. Surely many of those surveyed in the Careerbuilder report don’t truly want to leave their jobs, and want to look forward to coming to work again. By reconnecting with employees, some employees will recommit to their companies.

If employers engage in balanced communication with employees, set a tone of optimism and yet manage realistic expectations, and effectively leverage their human capital to increase engagement and performance, “the new normal” may be looking relatively sunny at the end of 2010. In the meantime, hopefully the aspirin has kicked in, as the time for a lie-down is over – we have a lot of work to do.

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