Strategies for Navigating Recession through Employee Development
October 29, 2023
In preparation for an impending economic downturn, McKinsey emphasizes the significance of focusing on employee development as a strategic advantage. According to recent research from the McKinsey Global Institute, companies that prioritize both human capital development and effective workforce management tend to outperform their peers in terms of profitability and resilience, while also excelling in talent attraction and retention.
Key findings from the research indicate that top-performing employers share common practices. They place a strong emphasis on providing continuous learning opportunities for their employees, offering more than 70 hours of training per employee each year, and ensuring accessible pathways for promotions and internal transfers. These companies also prioritize creating an enriched daily work experience and foster a culture of “intrapreneurship,” encouraging employees to collaborate and share expertise and ideas across different departments. Additionally, they lead the way in promoting inclusivity, with notably low gender pay gaps.
In addition to formal training programs, top-performing companies highlight the importance of on-the-job coaching as a means of helping employees tackle challenges and adapt their working methods as needed. Such coaching is most effective when managers remain engaged and provide immediate feedback, always with a focus on objectives, while motivating employees to surpass their own expectations.
However, many managers, especially those newly promoted, may lack the training and skills necessary for effective coaching. Consequently, businesses should consider investing in coaching programs for their managers, particularly if they rely on them to guide employees and corporate initiatives through potential economic uncertainties. ASE’s course, Coaching for Peak Performance, addresses this very issue.
One example of a proactive approach involves a company that initiated a specialized training program centered on inclusive management to equip its managers with the leadership skills required to drive positive change. Such training equips managers with practical tools and guidance for addressing real-life challenges, ultimately enhancing their effectiveness. ASE’s Principles and Practices of Supervision is a great example of similar training.
A culture of learning and development is also highlighted as a crucial retention tool, as suggested by an MIT Technology Review report from September. In response to a competitive talent market and the looming recession, some companies have adopted a strategy known as “labor hoarding.” In such situations, fostering a culture of learning and development can be an effective means of retaining employees.
According to Udemy’s 2023 Workplace Learning Trends report, employees are actively seeking opportunities to enhance their skills, even if their employers are not fully aware of it. They are investing in areas such as customer management and nonverbal and business management skills. Addressing this trend, the McKinsey report suggests that companies can facilitate the growth of trusted employees who are already familiar with the organization’s practices, thereby reducing attrition rates.
In conclusion, prioritizing employee development, inclusive management practices, and a culture of learning can provide businesses with a competitive edge and prepare them for economic challenges, ensuring long-term success and resilience in the face of uncertainty.
Source: HR Dive
By Heather Nezich, courtesy of SBAM-approved partner, ASE.