As most already know by now, the COVID-19 is leaving the global economy in a mess. Already, countless businesses have been broken and unemployment is skyrocketing. We will recover from this eventually, even the SMEs who are more vulnerable will be able to pull through if they are resilient enough. Companies thinking long-term would do well to view the current situation as a stress test for their recruitment and employee retention strategies.
Even before the COVID-19 outbreak, the world was facing a shortage of new and skilled talent; leading to difficulty with talent retention. Depending on their HR response to the COVID-19 crisis, in the future, these companies may also face difficulties recruiting.
It will not come as a big surprise that candidates in the future will be asking what a company did during the COVID-19 outbreak. Companies that were slow on the uptake to transition to a fully-remote team when urged by government and healthcare entities could be seen as uncaring. The same goes for companies whose bosses send employees back to work before it is definitively proven safe to do so.
Similarly, companies might be viewed as disloyal should they indiscriminately dismiss employees during this tough period. Both surviving staff and future potential candidates might ponder whether a company that, when faced with difficult times, has demonstrated a willingness to throw its people under the proverbial bus is worthy of their loyalty.
While it might seem like a prudent cost-cutting method to let staff go during a slow economy, it can have the opposite effect. When it comes time to restaff in a post-crisis environment, according to the Society for Human Resource Management, “Research suggests that direct replacement costs can reach as high as 50 to 60 percent of an employee’s annual salary, with total costs associated with turnover ranging from 90 to 200 percent of annual salary.”
As previously mentioned, top talent are few and far between in today’s economy. Even giant corporations can fail to hold on to skilled talent for long. Thanks to COVID-19, uncertainty is clouding the future of business. As such, it is now more than ever that companies need to demonstrate a culture of valuing employees and taking the steps to retain quality staff.
As one of the measures to mitigate the effects of the coronavirus, .any governments have recommended that companies ask staff to take pay cuts instead of implementing lay-offs. Many countries have also implemented financial schemes that involve subsidising employee salaries to help support employers who wish to retain their staff.
In times like these, the best leaders will usually involve staff in the decision-making process around difficult cost-cutting steps and explain why they are being taken. They will also ensure the employees that their jobs, compensation, and conditions will eventually return to normal. This empowers staff to be part of the solution and does much to foster cohesion and team spirit.
Companies must be careful about lay-offs, as a reputation for ruthless efficiency won’t work in their favour in the future. Besides which, getting back up to speed post-crisis may be more of a challenge than expected. It is by far better to retain the talent that’s currently on board.
Once this crisis is over, skilled talent and human resources will be necessary to meet the resurgent demand. Do not delay with regards to engaging with excellent talent who have received the short end of the stick during this disaster.