Of course it depends on who you ask about what lies ahead for the Canadian economy in the months ahead. There are signs of a slowdown but everyone seems to interpret them in different ways. Soft landing or hard, recession or minor slowdown. South of the border the word recession keeps popping up. That can’t be good for Canadian business.
Fortune telling and economic prognostications aside, it does seem likely that after several years of incredible prosperity when unprecedented growth and a shortage of talent drove HR strategies, HR departments may now be wondering if the field they’ve been playing on and the rules they’ve been following are about to change.
At least some Canadian HR experts say that while the context could change slightly as the economy goes through a shaky period, many of the challenges will remain the same and HR shouldn’t be too reactionary about gloomy headlines. The reason? The knowledge economy still has a lot of growing to do and old economy firms may finally have a chance to catch up.
Eric Cousineau, a director with the strategic change consulting firm Johnston Smith International, is optimistic about the economy, but does have some advice for employers if things do slow down in the months ahead. “Don’t turn off the tap on your T&D budget,” he says. Whenever things start to slow down, the first things to get cut are usually advertising and training and development, but that isn’t necessarily a good strategy.
True, it might get a little easier to find talent in the market, but only slightly, and employees in the knowledge economy will still want to work for a company that will provide them opportunities for professional development. By cutting the training budget employers will be sending exactly the wrong message and will likely find themselves struggling to find employees.
At a time of economic uncertainty communication also takes on a greater importance, said Cousineau. Rumours tend to spread more quickly when people are nervous and jittery employees are more apt to jump ship.
Layoffs in the dotcom world won’t mean unemployment will be going up, said Dan Ondrack, professor of HR at the University of Toronto.
If the bubble has burst for the high-tech world, employees may have to downgrade their expectations slightly but it is unlikely they will be out of work for long.
Old-economy firms have been slow to join the new economy in part because the IT help they needed was looking for the next great IPO with some upstart dotcom. Now that the shine is off the dotcom star, other businesses may have better luck finding the help they couldn’t recruit earlier.
In other words, the months ahead may be good ones for old-economy firms that have struggled to reshape their business models to catch up with the new economy.
However, Ondrack predicts a degree of sanity will also return to recruiting practices.
“A lot of people were hired on speculation and that created hyper-competition in hiring,” said Ondrack. And the extraordinary demand for highly skilled labour in turn lead to a remarkable inflation in employee expectations.
But now those workers may be more willing to work elsewhere, and it won’t be pinball machines and pool tables that will attract them.
They did their time with the dotcoms working extraordinary hours in most cases and many have emerged disillusioned. They will still be looking for companies that can provide them with exciting work opportunities but more than ever a good decent work environment will be important.
“A good work environment is not defined by pinball machines and pool tables,” he said, adding, “Toys are no substitute for interesting work.”
And if layoffs are necessary, employers need to be wary of the survivor syndrome, said Cousineau. If work is not restructured after people are let go, employees left behind could quickly decide to look elsewhere.
Canadian companies could also make better use of the people they have. “Where we’re way behind in Canada is we focus way to much on head count,” said Cousineau. Instead of using the numbers of employees as the unit to set staffing strategies, Canadian employers should focus more on full-time equivalency. In the United States, they are moving more toward a contingent workforce. Better use of part-time workers, in other words. But he cautions employers to treat part-time workers like regular employees. Ensure they are at all staff meetings and parties and be understanding and flexible about other part-time work they may be doing.
Toronto-based HR consultant Randy Garrett hasn’t seen any sign things are slowing down for Canadian businesses. On the contrary, recruitment is still a very big issue at a lot of companies. “Many of my clients can’t move forward because they don’t have enough people,” he said.
And even if the economy does start to sputter a little, retention will still be a big issue. Now that loyalty, for all intents and purposes, is dead and gone employees will be willing to jump ship at the first sign of trouble and the best employees will often be the first to be lured away, said Garrett.
Furthermore, if the U.S. does go into a deeper downturn, it may be an ideal time for Canadian companies to go and steal back some of those people who drained south of the forty-ninth in recent years.
Fortune telling and economic prognostications aside, it does seem likely that after several years of incredible prosperity when unprecedented growth and a shortage of talent drove HR strategies, HR departments may now be wondering if the field they’ve been playing on and the rules they’ve been following are about to change.
At least some Canadian HR experts say that while the context could change slightly as the economy goes through a shaky period, many of the challenges will remain the same and HR shouldn’t be too reactionary about gloomy headlines. The reason? The knowledge economy still has a lot of growing to do and old economy firms may finally have a chance to catch up.
Eric Cousineau, a director with the strategic change consulting firm Johnston Smith International, is optimistic about the economy, but does have some advice for employers if things do slow down in the months ahead. “Don’t turn off the tap on your T&D budget,” he says. Whenever things start to slow down, the first things to get cut are usually advertising and training and development, but that isn’t necessarily a good strategy.
True, it might get a little easier to find talent in the market, but only slightly, and employees in the knowledge economy will still want to work for a company that will provide them opportunities for professional development. By cutting the training budget employers will be sending exactly the wrong message and will likely find themselves struggling to find employees.
At a time of economic uncertainty communication also takes on a greater importance, said Cousineau. Rumours tend to spread more quickly when people are nervous and jittery employees are more apt to jump ship.
Layoffs in the dotcom world won’t mean unemployment will be going up, said Dan Ondrack, professor of HR at the University of Toronto.
If the bubble has burst for the high-tech world, employees may have to downgrade their expectations slightly but it is unlikely they will be out of work for long.
Old-economy firms have been slow to join the new economy in part because the IT help they needed was looking for the next great IPO with some upstart dotcom. Now that the shine is off the dotcom star, other businesses may have better luck finding the help they couldn’t recruit earlier.
In other words, the months ahead may be good ones for old-economy firms that have struggled to reshape their business models to catch up with the new economy.
However, Ondrack predicts a degree of sanity will also return to recruiting practices.
“A lot of people were hired on speculation and that created hyper-competition in hiring,” said Ondrack. And the extraordinary demand for highly skilled labour in turn lead to a remarkable inflation in employee expectations.
But now those workers may be more willing to work elsewhere, and it won’t be pinball machines and pool tables that will attract them.
They did their time with the dotcoms working extraordinary hours in most cases and many have emerged disillusioned. They will still be looking for companies that can provide them with exciting work opportunities but more than ever a good decent work environment will be important.
“A good work environment is not defined by pinball machines and pool tables,” he said, adding, “Toys are no substitute for interesting work.”
And if layoffs are necessary, employers need to be wary of the survivor syndrome, said Cousineau. If work is not restructured after people are let go, employees left behind could quickly decide to look elsewhere.
Canadian companies could also make better use of the people they have. “Where we’re way behind in Canada is we focus way to much on head count,” said Cousineau. Instead of using the numbers of employees as the unit to set staffing strategies, Canadian employers should focus more on full-time equivalency. In the United States, they are moving more toward a contingent workforce. Better use of part-time workers, in other words. But he cautions employers to treat part-time workers like regular employees. Ensure they are at all staff meetings and parties and be understanding and flexible about other part-time work they may be doing.
Toronto-based HR consultant Randy Garrett hasn’t seen any sign things are slowing down for Canadian businesses. On the contrary, recruitment is still a very big issue at a lot of companies. “Many of my clients can’t move forward because they don’t have enough people,” he said.
And even if the economy does start to sputter a little, retention will still be a big issue. Now that loyalty, for all intents and purposes, is dead and gone employees will be willing to jump ship at the first sign of trouble and the best employees will often be the first to be lured away, said Garrett.
Furthermore, if the U.S. does go into a deeper downturn, it may be an ideal time for Canadian companies to go and steal back some of those people who drained south of the forty-ninth in recent years.
