Approximate reading time: 4.6 mins 

You do not grow a business by shrinking it. This assumption has long underpinned the strategic thinking of the most successful organisations. Yet in a recessionary era, we have seen the business agenda undoubtedly shift towards cost savings and in many places a reduced investment in developing people.

Alongside shifting priorities runs a noticeable reluctance of some individuals to leave their desks to attend learning events. Even for mandatory ones, last minute cancellations, postponements and non-enrolments seem to dominate the scene.

Plus there is widespread pressure on L&D to rely more on internal than external learning resources. While focused on achieving savings in practice it often leads to poorer quality learning environments.

In varying ways and to varying degrees the most astute organisations continue to resist these trends. However, many have succumbed, with the result that imperceptibly, whole swathes of employees are being de-skilled.

The main victims are seldom those fortunate enough to be designated as top talent. The two to three per cent of the organisation, whose talent is recognised, continue attracting head space and a disproportionate share of the reduced resources for new learning and further improved skills.

Meanwhile, the bulk of employees slip steadily into the non-learning zone, absorbing the message that things are tough and perversely reacting by resisting even those few learning opportunities that come along.

“Why should I go on a course anyway?” is how some respond, “courses don’t cut it these days”, are two typical responses, with a parallel L&D tendency to take the easy route and argue that on-the-job learning is anyway far better.

The response by external providers is to keep shortening the learning time spent away from the work place, so that two-day skill events become one day, one day shrinks to half a day, and half a day condenses into 60 to 90 minute–so called bite- sized learning events.

From there it is a short step to the fantasy that on-line learning is the way forward, so that you never need leave your desk in the first place. Doubtless soon someone will offer a micro chip slotted into your neck that will download new skills even more painlessly.

Recessions though eventually recede. Soon organisations will be facing a fresh skills crisis, a new war for talent that will ratchet up costs in which retention will start playing a major part again.

Having people in place with the right attributes and capabilities will ensure organisations avoid missing out on attractive opportunities. Those with the right people in place still risk losing them as recession ceases to be the easy way to guarantee retention.

If the above sounds a little extreme, just watch the inevitable rush of articles, books, seminars, webinars and events focused around the predictable “how to lead out of recession”.  The best speakers will not just pronounce on the importance of this but identify and comment on the serious loss of spirit in so many organisations.

Loss of spirit reveals itself in low levels of engagement, morale and lack of trust in organisational leaders.  “There needs to be a real focus on employee engagement and retention,” says Claire McCartney, adviser to the CIPD. “…our surveys show that job satisfaction has fallen and more people are thinking of moving jobs. Some people feel that their hard work has not been recognised and there are others who feel there are not enough career opportunities.”

Trust in financial leaders and institutions for example has plummeted in recent years. Restoring it will take more than a few bite-sized learning events or seminars on how to affect organisational culture.

In the US, Maritz Research, a leader in employee satisfaction research paints a dire outlook for American workforce attitudes toward employers. Employees’ trust toward their workplace has taken a beating, with the workforce across all industry segments citing a lack of trust not only in senior leaders, but in direct managers and co-workers too.

Nor has the UK grounds for complacency, since our own levels of trust are equally low. As Will Hutton of the Work Foundation put it recently: Employees, customers and innovation have all been forfeited for short-term financial success with the result that "managers became asset sweaters and target achievers instead of business builders and people engagers".

With ever fewer institutional channels for airing their grievances, employees simply take their disaffection underground, where it is more damaging and far more costly. The number of employment tribunals for example is rising and sickness absence is increasing.

Repairing the damage from all this negativity, including loss of spirit will take time and real senior level commitment. For instance, even if BA management wins everything it hopes to achieve from its disaffected cabin crew, can it ever regain high levels of employee trust and engagement in the foreseeable future?

In the battle to restore spirit concern about retention of talent looks set to be a major concern as organisations move from the shrinking phase into a more externally focused one. More companies are aware that talent is the one enduring source of competitive advantage.

Yet according to a recent Deloitte poll while 65% of companies are nervous about losing high potential employees and critical talent to competitors, only 35% have updated their talent retention plans.

Further, almost one in three employees is actively searching for new jobs and nearly half are considering leaving their current ones.

The situation is worse among younger staff with only 37% of Generation X and 44% of Generation Y employees planning to remain with their current employers.

And over three quarters of all those who intend to leave their current jobs cited lower morale at their companies.

So when organisations are done shrinking, the likely concerns of leaders will be: how to increase trust, ensure staff retention, re-energise and inspire people at work and build new levels of morale and engagement.

These seem set to be some of the major themes of what it will take to “lead out of recession.” And the clever companies aren’t waiting. They’re already on the move knowing that how they treat their people now will govern their future success. So, they are developing them for the way ahead.

The implications for leaders include:

1)    Take retention seriously now, don’t wait for the recession to recede

2)    In even the best run companies, loss of trust may still be an issue. Develop a clear strategy for restoring trust levels or pay the price in attrition rates and low levels of engagement

3)    Do more than measure engagement, invest in practical daily measures that show why you need people’s discretionary effort

4)    Make sure leaders feel equipped to inspire people and know what it takes to re-energise both individuals and teams

5)    Avoid looking for ever more short cuts in achieving behavioural change, instead recognise that the process takes time and a proper investment of resources 

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