The good news is Australia officially averted a recession. However, the bad news in the employment sector continues. Gains are small (SEEK Employment Index saw a modest rise), and the hard times promises to continue for a while longer.
When times are hard, everyone needs to adapt; everyone learns to adapt. Internal departments, individual companies and whole industries are adapting to the changed environment. So, how are talent solution providers adapting? What is a good strategy to take in a downturn?
I am reminded of the strategy framework (see chart) developed by the Pepper & Rogers Group, who pioneered the 1to1 marketing concept a decade ago. Their argument basically is, when times are hard, discard unprofitable customers, concentrate on retaining current customers, and above all focus on core capabilities. Sounds simple enough, but our industry is littered with offerings in the line of ‘we specialise in everything’.
Nothing forces a company to focus on what’s most important like a downturn does. But focusing on core business is a sound strategy that should be equally relevant in good times. A study by consulting firm Bain & Co found “95% of value-creators are leaders in their core business’, and that focusing on core business is the key to profitability.
The fact is there’s a lot of noise (competitors, alternative service providers, new business models, game changers) in our industry, and it’s going to get even noisier. Regardless of the economy, I believe the best way to stand out is by choosing to stand for something. What is your strategy?
- TowersPerrin believes effective reward management is critical when times are bad. Offers six strategies
- Five talent strategies for a downturn (A downturn will remind you that “talent is all you have.” )
- How HR departments are tackling the downturn in Australia (a report sponsored by Kelly Services)
- Pricing strategies for a downturn, practical advise from Harvard
- “Trim the fat not the staff”, advice from a cost accountant.
- IT strategy in a downturn, advice from Bain & Co.
- McKinsey global Survey found companies benefitting from R&D are actually expanding their investment (Registration required)
- CIOs thrives in adversity, Harvey Nash Study
- Good resources on navigating the downturn, courtesy Wharton and FT