Fast Company: One Year Later–Flexible Downsizing and Hard Choices Post-Recession, Pre-Recovery

A year ago, the economic downturn was in full gear.   As layoffs gained momentum, I loudly promoted a more flexible approach to downsizing as an alternative to knee jerk job cuts.  If executed correctly and strategically, compressed workweeks, telecommuting, reduced schedules, furloughs and sabbaticals improve productivity and reduce costs in numerous areas (e.g labor costs, real estate overheads, operating costs), therefore, limiting or avoiding layoffs.  Additionally, this very same flexibility simultaneously achieves other business objectives, such as disaster preparedness in response to the H1N1 virus, or expanded global client coverage to generate new business.

Over the past 12 months many people have said, “Thank you.  You made me think of other options and as a result we were more creative and flexible in how we managed through the crisis.”   But about three months ago, I noticed a shift.

With glimmers of a recovery finally on the horizon, flexible downsizing entered a new post-crisis, pre-recovery phase.  In this gray zone, a flexible approach to managing productivity and costs in all areas remains critical but involves a new set of choices:

  • What about businesses that did use flexible downsizing strategies, but a year later, aren’t starting to recover and may never recover?  Are more layoffs necessary?  If yes, how do you make those cuts without undoing the benefits realized from having taken a more flexible approach in the heat of the downturn?
  • How do you compensate and retain top performers who were willing to sacrifice in the thick of the crisis, but now see a recovery and want to be rewarded at pre-recession levels, even if the business hasn’t recovered and the money isn’t there?

Before we address the “how to” in this next phase, let’s take stock of where we actually are a year later: (Click here for more)