David Kippen, Ph.D.'s Blog

In a word: retention.

When times are good, cash flows in and organizations hire. And organizations that require highly-skilled or scarce talent work hard to differentiate themselves on the basis of their employment brands to selective or scarce talent.

When times turn tough, recruiting budgets typically fall. In response, brand holders and owners are often tempted to cut back on brand-related activities. After all, when there’s no hiring going on, why worry about your brand?

Actually, when times get tough your brand’s even more important. Consider what happens during a typical downturn.

First, revenues level off, then they begin to fall. Organizations respond by cutting back where they can most easily cut—with hiring freezes, pauses in optional capital expenditures, limits in raises and incentives.

Then, if things get worse, organizations often respond to decreasing sales and increasing inventory by rounds of layoffs, downsizing, rightsizing, redeployment, and so on. Whatever the acronym, there are fewer people with each subsequent round and this cycle typically feels worse as it goes on. Early stages may include departure incentives (like early retirement, transitional pay, etc.). Later stages often don’t. The underlying economic conditions often pick up right in the middle of this cycle, but organizational inertia being what it is, layoffs may continue as financials improve.

As organizations move through this cycle, things get pretty bleak for the workforce. Current employees are generally asked to do more with less. They’re asked to pick up the slack for others who have departed, even though there’s often not much excess capacity after the first round. They respond by working harder than they were when times were good and receiving no increase in pay or incentive because the market’s bad. Meanwhile, the networks of trusting relationships they’ve built are fraying as friends depart—or are exited—they’re afraid for themselves and their families, mistrustful of their management, and so on.

Point is, if the organization’s not careful about how it moves through a downturn, that employment brand equity it worked so hard to engender during good times will evaporate. And when the tide turns again, when markets are good, hiring is intense, talent is selective, the word on the street will be that your employer brand is “just marketing.”

So what do great brands do when times get tough? They change their focus to retention and engagement.

Retention may seem like a strange focus, but remember, during the early rounds of layoffs, the people most likely to leave will be the high performers who have lots of choices and the low performers who know what’s coming. Retention starts with identifying these high performers and giving them a reason to stay, while signaling clearly about how these and future cutback decisions will be made—that is, on the basis of real criteria, not politics.

Engagement starts here as well. Because as paradoxical as it seems, downturns are often the best times for career growth. What employees need to understand is that the extra work they’re being asked to do can actually serve as development opportunities. (As Henry Kaiser observed, challenges are opportunities in work clothes.) When your manager departs and you have to start doing the financials (or the reviews, or the presentations), it demonstrates an unknown ability to the next level of management.

When your colleague departs and you suddenly have to do both the copy and the design, or develop the agenda and lead the meeting, or master something you’ve avoided, it’s a chance for lateral growth. And when the markets pick up again, if you’ve done a good job, you’ll be first in line for your former manager’s job—or a larger title and role combining areas that had been kept separate.

But this only works well if high performers stay in the game. Think about it: they’re not high performers because they’re good at their jobs; they’re good at their jobs because they’re high performers. What made them good in yesterday’s environment makes them the most likely to succeed in today’s—and tomorrow’s. And it’s their behavior—and success—that the large part of the bell curve will emulate.