The funny thing about a recession is that we’re already well into one (or in and out of one) before we know we are in it. But all this talk about a recession is making small business owners nervous. The first thing many small business owners will do in reaction to a slow down in business is to look at where they can cut to reduce expenses. That normally ends up being payroll, the biggest small business expense. But you want to use caution before you take any radical action.
Tom Gimbel, CEO of Chicago-based staffing and executive search firm the LaSalle Network says that is absolutely wrong and could be the worst decision you could make. He actually suggests the opposite approach — hiring during a recession. Here are three reasons why.
- Think Long Term – Unfortunately, many CEO’s are short-sighted and only see the looming “recession monster,” but fail to think at the bigger picture of long term company growth. Most of the time, economic downturns are short-lived and riding them out would have been the better option. In addition, it’s easier to invest training time for new hires during slower growth periods that will translate into long term success.
- Consider Training Time – Many employees that are fired during a recession will have to be re-hired after the numbers turn around. Ultimately, this costs companies a lot more money then just keeping the employees they initially had. The average employee takes at least a year and a half to really get acclimated to a new job. That’s all time and energy taken away from getting the work accomplished!
- Peer Into the Talent Pool – Since a lot of companies make the mistake of firing during a recession, there is a greater amount of good talent looking for jobs. This is a great time to find top performers who will help bring your company to the next level. Rather than having to play “catch-up” after a recession is over by trying to fill holes that were left from downsizing, you could have top notch, productive employees already in place.
What do you think? Leave me a comment.