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Staffing During the Recession

(December 2011) posted on Thu Nov 17, 2011

"Interestingly, it has never been easier to staff our company with star employees than during this recession period."

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By Craig Miller

As a result, if we must resort to issuing a pink slip, we have someone to fill the outgoing employee’s chair before it even has a chance to get cold. I know that may sound somewhat cruel and calculating, but the responsibility for an employee doing what is reasonable and necessary to keep their job is theirs and not ours. This is a practice that you can’t institute when you need someone in that position; and tolerating less-than-stellar performance is better than having no one to do the work.

When we look at performance criteria for our current employees, we look at two completely different variables. The first is always performance related. How well do they do their job? Are they dependable? Do they contribute to the quality of our products and services? This is pretty easy to measure.

The second variable, though, is more subjective. Are they pleasant to be around? Are they well liked and well respected? Do they work well with other members of the team? During a boom time, our tolerance for PITAs (pain in the behinds) is higher. But the recession has given us the luxury of zero tolerance for jerks, even very talented jerks. We believe that unpleasant people are poison to our team culture and we now get rid of these individuals faster than people who have issues with professional competence.

In a boom economy, the probability is higher that people in the unemployment pool are not the crème de la crème. That is not true today. Because so many of our competitors have downsized or gone out of business, this has populated the ranks of the unemployed with a lot of quality people.

Star-making through compensation
When there’s such a huge over supply and low demand, employers get a bargain when they hire. And that’s the case now. This, however, carries some responsibilities with the deal. For instance, the initial low wage on a new hire incentivizes us to try a person out. Whereas we may not have considered someone because they are part of the long-term unemployed or because of their inexperience, we now have the luxury of giving them a chance to prove themselves.

All of our people begin with a three-month probation; this way, if they don’t work out, it’s easy to let them go. Because of the low entry wage, it doesn’t cost the company too much for this learning experience and it’s easy to find a replacement if need be.

On the other hand, if they do work out, we offer the opportunity for a raise at the end of the probation. If we’ve hired a quality employee, it would be “penny wise and dollar foolish” to keep them at this artificially low wage. A modest yet significant initial early raise gives us the opportunity to show the new hire we’re fair by recognizing their worth. And because this raise is modest, we retain the opportunity to provide raises over shorter-than-normal intervals if they’re merited. So if the new hire proves to be a true star, we can make every effort to bring them to a salary that is commensurate with their value to the company. If they’re that good, then retention through compensation fairness becomes the most important concern.

Through practices like these, we’ve been adding more and more stars. In fact, I think we’re well on our way to developing our best staff ever – and given our past staffs, that’s saying a great deal.With our business on a significant upturn, it has been beneficial for us to take advantage of the economic conditions in this labor market. I think we have also learned some HR lessons from this experience that will stand us in good stead when the overall economy improves.

Craig Miller is a principal shareholder in Las Vegas-based Pictographics ( where he is also director of military and law-enforement projects, the company's defense-contracting division.