As some would say 'a crisis is a terrible thing to waste'.  A recession makes organisations concentrate on the financial issues which they should be focused on continually - finance staff becomes the business’ best friends 

During a recession businesses are forced to focus on the four ‘C’s which are;

-    Cash
-    Costs
-    Commitment
-    Communication

Cash
Many a profitable business has gone under because of lack of cash.

During a recession businesses must minimise their ‘Cash Conversion Cycle’ that is the difference between their DSO (Days Sales Outstanding) and their DPO (Days Purchases Outstanding).  This effectively means closely targeting and monitoring cash collections whilst at the same time maximising credit terms with suppliers.

Sound Credit Management policies are essential in this regard with rigorous credit checking at the start of the process, timely issuing of invoices to customers and swift follow up to ensure that payments are made to terms.

During a recession larger suppliers will be subject to the same economic challenges but in some cases terms can be negotiated - Government agencies will also look favourably on businesses that commit to and stick to agreed payment plans.

Costs
All costs should be up for challenge under normal business conditions however in a recession this process should be even more rigorous.

All cost lines in the P&L must be thoroughly examined and challenged, the obvious ones being property costs, people costs, ensuring that the back office is performing efficiently and that the front office is productive. 

Capital expenditure plans also need to be justified as they also have a direct impact on cash flow depending on how they are funded.

Commitment
Commitment from the business to deliver performance on budget and where cracks appear there must be a commitment to make timely and effective ‘Turnaround/Close’ decisions.  Loss makers who burn cash need to be of significant strategic importance if they are to be sustained during a recessionary period.
Financial and Management Information flow is critical and needs to be accurate, timely, relevant and complete - however the business needs to be committed to act upon it.

Communication
Although listed fourth, communication is probably the most important of all four C’s.
This includes internal communication with staff, shareholders and strategic partners and external communication with customers, suppliers and government agencies. Communication with these various stakeholders allows everyone to be informed about what is going on and the current position of the organisation.

Communication is the tool that underlies the other three C’s and without it efforts in those other areas will not be as effective as they could be.

Remember that 'turnover is vanity and cash is sanity' - profit is not realised until the cash is in the bank.

With a focus on cash and costs, a commitment to make tough decisions and take timely action, all supported by an open and honest communications strategy will go a long way to seeing any business through a recession.


Author: Mark Glenfield, Chief Financial Officer for GEG

Whilst the economic predictions change almost daily we at least know that the current slow down in our economy will ease.  Organisations must start to focus on engaging employees so the company can grow when the economy turns around.  

 

In the aftermath of large scale redundancies those in the workforce are experiencing what has been coined as ‘survivors guilt.’  This guilt has a negative impact on employee morale, their satisfaction and motivation.  All key factors impacting on productivity.

 

Another interesting research finding from a survey of over 3,000 workers from the CIPD, is that 1 in 5 employees are ‘so unhappy as a result of how redundancies are being handled that they are looking to change jobs as soon as the labour market improves.’  This suggests that the current situation could therefore also be impacting on organisational commitment.

 

Managers are likely to be under significant pressure to deliver business objectives however studies emerging are highlighting these facts cannot be ignored.  Organisations need to act fast to ensure employee engagement and motivation are addressed so during economic recovery they have the employees committed to the growth of the organisation.

 

So what can organisations do?

 

 - Look at ways to develop and grow the talent within the organisation - identify personal development needs and put in place measures to assist

- Ensure a positive work/life balance culture persists – ‘the survivors’ are likely to feel pressure to prove their job is still needed and/or have increasing amount of work with less staff to do it.  Introduce measure to promote the balance between work and life outside work.

- Added value work – ensure employees are aware of how their work contributes to the organisational objectives

- Communication – ensure timely and relevant updates on organisational priorities, changes etc. are provided to all employees

It is interesting what the recession has done to all of us, especially those looking for employment.  Recently our colleagues at Grafton Recruitment in Czech  Republic surveyed both passive and active jobseekers to obtain their insights into how the global recession has impacted their considerations about job opportunities.  In the past they found that the main reasons for changing employment was salary or financial benefits.  The 2,500 respondents to this survey showed a shift in thinking with job satisfaction being more important than financials.  A majority of the respondents (over 70%) were willing to accept a job with lower qualification requirements.  They were also willing to invest in education or retrain, if the outcome was a secure role.  Some will even change their area of expertise.  The survey results show that jobseekers expectation levels adapt with the economic climate.  To read more on the Czech Republic survey go to http://www.grafton.cz/images/stories/cz/PR_MEDIA/Candidate%20Survey.pdf

What we are finding in the UK is that many would like to change companies or even careers but are staying put until the dust settles.  A survey of over 3,000 employees by the CIPD found that three out of four respondents had no plans to find a new job, mainly due to the recession decreasing the number of vacancies available.  A third of those questioned said they wanted to change their job.  One in four said they were looking to switch to a different career.  The CIPD predicts that once the economy improves, the flow of talent will pick up and those that are dissatisfied will move on.  This highlights the fact that companies can not take their people for granted.  The recession may keep the best talent with you for now but taking the time to build employee engagement is necessary if you want them to stay put.

It is interesting to see the differences around the world.  What is your experience?

In recent years there has been a drive and focus amongst some of our large IT clients in Central Eastern Europe to increase the number of females in their organisations. They firmly believe that having a healthy gender balance is an asset to the workplace as it promotes a more positive and open culture.
 
Whilst Grafton ESP engage a range of strategies to attract females into IT roles the problem is more deeply ingrained and to truly tackle this more work needs to be undertaken with people of school age and those people returning to the work place.  Attitudes need to be changed and women need to be aware that not all IT roles involve sitting at a computer all day and running diagnostics.  To this end we have been proactive in promoting the career paths and range of roles available within IT.
 
We have also increased our use of social networking sites, to understand the issues faced by women and to engage with them for the benefit of our IT clients.  We believe with our experience across IT in CEE we have a unique insight that we can share with women on different forums and sites that may help motivate them to apply for client positions.