Inflation, stagnation, recession, downturn—call it what you like, the
- Layoffs or fears of downsizing may increase injury claims. Some workers prior to layoff will claim a workers’ compensation injury to ensure they continue to receive a check for the foreseeable future. Overall, however, national research shows a decline in injuries during recessions because layoffs leave only the more experienced workers on payroll.
- Layoffs will trigger employment claims of disparate treatment.
- Layoffs will overtax employees and injuries, and allegations of stress may increase.
- Crime losses, both internal and external, may increase. Desperate times may trigger desperate measures.
- Organizations will cut back on safety, training and equipment purchases, which may put employees at greater risk.
- Believe it or not, risk managers and safety personnel often lose their jobs, especially in the public sector. This is why quantifying risk management cost savings is so critical to a risk manager’s success.
- Business interruption values, according to Rick Betterley, President of Betterley Risk Consultants, go down, as do sales and payroll. This means return premiums from audits may increase.
- Receivables can quickly escalate, causing companies to lose their financial footing with little warning. Monitor your receivables closely.
- Supply chain management becomes even more critical, because heavily relied on vendors may reduce output suddenly , crippling delivery and production.
- Commercial loan funds may dry up. Ensure you stringently manage your cash flows.
- Your organization may become too focused on short-term financial goals, which can leave your company open to long-term problems. Your board of directors should be watching the big picture.
- Certain employees and departments will use the opportunity to power grab, according to Bob Sutton, a Stanford University business professor and author.
All these issues and other issues must be anticipated. Put a plan in place to manage them before they occur.
There may be some upsides to a recession, however. Take advantage of them to improve work processes and hone your organization.
- With a rash of layoffs, prime job candidates will be knocking at your door. Even if you have no immediate openings, develop a method to databank recruits and connect with these potential employees. You never know when you may be looking for exactly that candidate’s job skills.
- A leaner workforce may mean improved communication. Poor communication results in more corporate waste than experts will ever be able to quantify.
- This may be a perfect time to research your competitor’s best customers. If competitors fold or are compromised, you should be positioned to woo their accounts.
- Use this time to invest in research and development. Prioritize projects to ensure you target all your efforts for the greatest return on investment.
- Employees may not expect raises, but they will want recognition for their hard work. Recognition does not have to cost much. A simple award or commendation can work wonders when pay raises are non-existent.
- Consider telecommuting and flexible work schedules to reduce employee expenses and lower your own expenses. Closing your office or cutting back office staff one day a week can add significant energy savings and keep employees on the payroll without raises.
- In difficult times, use the numbers to teach employees basic accounting skills. Start basic and build financial acuity, which makes employees that much more valuable to your team.
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