Smart companies re-skill not retrench
By Julia Stirling
Smart companies have learned from the 1990s recession and are not bankrupting their resources, according to Susan Heron, chief executive of the Australian Institute of Management (Victoria/Tasmania).
“They are keeping the right people on board so they are actually not mortgaging the future,” Heron says. “It’s a real point of difference between the 1990s and now.”
Retaining skilled employees is seen as the top priority in helping Australian businesses survive the downturn, according to a survey released by the institute.
The survey, Business Performance and Priorities in the Downturn, was conducted in December and January.
The vast majority of the 528 business leaders surveyed remain positive about their companies’ capabilities and future prospects.
Although 20 per cent of respondents say their companies are looking at downsizing and retrenchments, 87 per cent of CEOs and top-level executives believe their companies will survive the global financial crisis, and 81 per cent say investment in employee development and retention will benefit their companies in the medium-term.
Can skilled employees be reasonably confident they won’t be made redundant?
“I think what it shows is they are highly valued and going to be difficult to replace,” Heron says.
“Companies’ strategies and their actual financial position will, of course, play into that.
“For [skilled employees] it looks better.
“The low-skilled workers who are unfortunate to find themselves being retrenched will have to look at investing in themselves and acquiring new skills.
“Australia entered the downturn with serious skills shortages and an ageing workforce. We would suggest that now is a great opportunity for the Government, with its various stimulus packages, to lift employee skills in a way that provides long-term competitive advantages for Australia.
“Potentially, the Government’s initiatives will be particularly important in helping to fill in any gaps in our workforce capabilities.”
Heron says there is an opportunity for GenerationY to emerge into more senior positions, with companies taking initiatives to invest in-house. There are also advantages for corporate Australia in many baby boomers deferring their retirement plans due to the impact on their superannuation funds, Heron says.
“The bonus for Australia is that we actually retain this incredible knowledge bank and that’s got to be a real plus. So there are some good aspects to this,” she says.
Heron says confidence is critical.
“We need to be very cautious about being sentiment-led, there are still good businesses out there.
“Yes, times are tough, but don’t get the disease of fear and let that actually be the thing that drives you. Remember to take control: you’re in the driver’s seat for the company’s future.”
Michael Yung is the Australasian training and development manager at Device Technologies, an Australian-owned company that markets and sells high-quality capital equipment and medical-device consumables. The company has 270 employees with offices across Australia and New Zealand.
Yung says the company has been affected by the downturn but continues to trade well and is optimistic about the future. Professional development is a critical component to its recruitment and retention strategies.
“These days, probably more than ever, your high-quality prospective employees are looking for companies that not only provide them with excellent job opportunities but also they potentially want a career,” Yung says.
The survey indicates 71 per cent of respondents consider the downturn a good opportunity to gain a competitive advantage and build market share while many of their competitors are in retreat.
Yung says many companies will take their foot off the gas and reduce their training and development programs, with the inevitable outcome that their workforce won’t maintain its skills and knowledge-based competencies.
Device Technologies is focused on continuing to invest in its people through various training and development programs, in order to give it momentum when the economy recovers, Yung says.
Christian Orb is the southern regional manager at Device Technologies. He has a bachelor of nursing degree and a masters in marketing from Monash University, and was attracted to the company 18 months ago because it was the right cultural fit.
Orb describes the culture as dynamic, fun and very people-oriented.
While the coaching, developing and mentoring programs were a big drawcard, he was also drawn to the company because of the evolution it was going through.
Part of this involved a department specifically set up for training and development that has improved efficiencies across the board.
Orb says the downturn has made the company work a little harder with fewer resources.
“It’s a good opportunity to look internally to see where we can work better,” he says.
“Some organisations might use it as an excuse to let people go, but at the same time it’s important to nurture the people who have got the skill sets, so they don’t feel uncomfortable. The good times ahead are going to be there, but we need to be focused now to make sure, when that does happen, we do have a solid foundation to be able to survive.”
The Weekend Australian