Chicago IL Sept. 9, 2011 -- While economic uncertainty has many executives working late nights on contingency plans to trim their workforce, they may be ignoring business planning that can preserve profits and make downsizing unnecessary. Appearing on WorkspanTV.com, Juan Pablo Gonzalez of Axiom Consulting Partners, said that strategic thinking about shifting market demand, talent, and how employees actually create value is particularly important now when companies are facing the shock of a struggling economy.
Gonzalez said, “According to 50 executives we interviewed in writing the book, Shockproof: How to Hardwire Your Business for Lasting Success, focusing on the things a human resources department should do well makes all the difference in coping with changing market conditions.”
According to Gonzalez, four key operational functions, the acquisition and deployment of talent, and the development and compensation required to keep that talent, have to be aligned with the company’s strategy if it hopes to do more than reduce headcount. That alignment is particularly important to retaining profitable customers in tough times and keeping operating costs down when markets recover. “These are powerful, but often overlooked levers,” Gonzalez said. “The leader who can make sure the company is hiring and retaining the right talent for the times, deploying that talent where value can be created, and then using career development and compensation strategies to retain top performers, creates a more resilient organization.”
For example, CACI International, Inc., a $3.15 billion government contractor with more than 13,900 employees worldwide, was able to save $13 million in one year by better forecasting the demand for its services. By developing advanced analytics to forecast and match market demand to skill requirements, the company reduced the number of vacant positions that actually generated revenue for the company. That helped bolster the bottom line. In addition, the company was able to retain employees that created value, even when demand softened, because management had greater visibility into future opportunities and could manage the cost of manpower more accurately.
Crown Imports LLC, the exclusive distributor of imported beers including Corona, Modelo and St. Pauli Girl, recently reported a healthy first quarter, with net profits up 10% and a 9% increase in sales. In Shockproof Crown Imports President Bill Hackett said, “Success in this business is all about having the right game plan and the right people to execute it.” Through a fact-based analysis of markets and channels the company made resource allocation and organization design decisions to ensure that it had the right people in the right roles to align their overall strategy with day-to-day activities.
“Instead of looking at quick-cut layoffs and other short-term reactions to this uncertain economy, the winners who emerge from this cycle will be those companies that are working to align their strategy, organization and talent with current market realities,” said Gonzalez.