Making Important Decisions During This Time

Over the last 6-months, I have observed a growing concern from our business clients about staffing shortages and how they will get work completed for their customers. I have heard of stories where staff have left for large wage increases which our clients have not been able to understand given that they have a good knowledge of challenges facing their own industry.

I always remind clients that hasty decisions made at the wrong time can lead to even more detrimental impacts on their business. An example of this might be employing a new staff member at a salary level well in excess of their market value and then finding that there is a down-turn in the business and that the employee is needed to be let go.

I found, in business life, that the times when I thought less rationally are the times I experienced detrimental impacts. Some of these took over 10 years to recover from. My suggestions to think about in relation to your business as we approach the Christmas period:

1. Is this the time when you should accept that your business turnover will be a little lower than usual as you have lost staff and have been unable to replace staff at a similar wage level?
2. What impacts, long-term, will there be on our business if we employ staff at the same level as existing staff, but at a higher pay rate?
3. If there is a downturn early to mid-next year, could the decisions we made in this 6-months result in needing to terminate staff creating a cultural vacuum in our organisations.

Many employers have stated to me that they haven’t seen conditions like this. However, I did remind them that similar conditions to this existed when employees were been interviewed for their jobs a few decades ago. In fact, when I first finished university, there was a chronic shortage of professionals meaning that I was interviewed for five (5) jobs and received five (5) job offers. However, within 2-years, unemployment reached 11%.

My words of wisdom are:

1. Don’t pay too much for staff acquisitions as you may be setting yourself up for short-term or long-term difficulties.
2. Continue to search for staff who have a long-term perspective who want to go on the journey with your business.
3. Keep searching for those 25% of the workforce who statistically stay for longer than 10 years at their job.

Remember, short-term decisions in haste very rarely produce a positive outcome.