Think hard before cutting back on people

With the current market turmoil and credit crisis, job one for many mining companies today is cutting back on spending and I doubt I’ll surprise anybody by saying that investing in people is usually one of the first things on the chopping block.

And I support this with the harsh reality that one organization I know just axed its entire training budget. And why not? It’s quick, simple, and has no immediate downside — right? Wrong!

At a time when employees are nervously dusting off their resumes, cutting ‘people programs’ sends a dangerous message. At best, that the company believes people-oriented spending is frivolous but at worst, that employees are simply not valued.

And this at the very time when worker commitment is critical.

Companies thinking about pulling back on your people programs should think about the following first:

• Savvy customers, partners and suppliers may view cuts in people-oriented spending as a warning sign that the company is failing.

• When money is cut on developing people, good people leave. What happens when the market turns around and the firm is left with mostly lower performers?

• In times of crisis, employers need leadership capabilities throughout the organization — the kind of capabilities employee development builds.

• The bottom line might weather the economic storm, but it could take years to overcome the negative impact employee spending cuts have on the internal culture.

• It’s a known fact that 88% of employees leave an organization for reasons other than money and the number one reason they leave is that they feel devalued and unrecognized.

Cutting people-orientated programs is a sure way to send those talented employees running to the competition.

Of course I appreciate the gravity of the present leadership challenge because we have never been here before and compounding the problem is the fact that we don’t know how things are going to unfold. Unable to draw from past experiences, we are now faced with problems for which there are no obvious solutions.

Whatever the future holds, I do know this: organizations need their employees now more than ever. And they need their leaders too.

Jerry Grandey, CEO of Cameco Corp of Saskatoon, clearly supports this. “When times get tough, it’s the leaders you have that will carry you through. You’re going to be depending on employees who have been leading in the good times, but perhaps haven’t seen the bad times. In my view, now is the time to place the highest priority on developing leaders. When times are tough we must make sure we’re investing in our leaders in the same way that we quite willingly invest in the refurbishment of a mill or the development of the mine.”

Steve Reid, COO of Goldcorp Inc of Vancouver, has a similar view. “Now is the time you need all the skills that you’ve been trying to give your people. You want them to step up and speak up, so you mustn’t cut training. At Goldcorp, growing people is still our number one strategy.”

As a leader you’re tasked with the nearly impossible job of inspiring confidence in stakeholders without seeming out of touch, protecting your or ganization from falling dominos in an interconnected world, and engaging employees who are worried they might not have a job tomorrow. There’s no panacea I can offer, but I can tell you with all certainty that developed employees are engaged employees, and engaged employees are what every organization will need if they’re to make it through the crunch.

The economic outlook may be muddy but this much is crystal clear. So, yes, make sure you’re running a tight ship, just not at the expense of your team. I promise they will repay you in more ways than one. By being engaged, productive and committed. By innovating and inspiring. By applying their learning to your organization’s challenges. Invest in your people’s development, and you will discover that you have a crew of emerging leaders ready to help your organization navigate the storm.

It’s time to push through the fear and recharge your organization with true leadership and vision. My number one tip? Be bold and focused on your people.

What does that mean?

• Tell your people that their development is a priority — that they are a priority — and back your words up with action.

• Invest in programs designed to create opportunities for talented employees to connect with each other, build relationships cross-functionally, and take ownership for your organization’s success.

• If you have working people programs, keep the fundamentals the same.

If you’ve been considering implementing a program in the future, I recommend that you do it now and be vocal about it.

---