Tag Archives | employees

Brexit: Why should you care?

Britain’s exit from the EU, commonly nicknamed Brexit, is one of the most discussed issues over the past week; particularly when it comes to the financial implications of Brexit and how it impacts business.

financial implications of brexitFor the first time in its existence, the European Union (EU) has lost a country from its (previously) 28-country politico-economic union.  News reports have been answering the most Googled questions: What does Brexit mean? What is the EU? Should Great Britain leave the EU?

Truth is, there are dozens of financial implications that businesses are going to have to contend with, regardless of whether they are based in the US or other countries. With Britain as the 5th largest economy in the world, it is bound to have a direct impact on the United States. The US currently has the largest economy in the world. Because it can be slightly overwhelming to understand what Brexit means for business (with the term “Brexit” returning over 213 million Google search results and counting), we’ve narrowed it down to 4 macro issues.

  1. Labor
  2. Stock
  3. Trade
  4. Regulation & Innovation

We’ve chosen to examine these issues because, regardless of whether you’re a domestic firm or a multi-national corporation, they could have either a direct or indirect impact on your company.

Labor

It’s a no-brainer that you need people (labor) to run a business. With labor, comes skill. In a recent article, The Guardian analyzed what the financial implications of Brexit are and, more specifically, how the talent pool is anticipated to shrink in the coming months or even years. The United Kingdom (UK) is experiencing a skill gap in many professional positions, such as IT. GB has failed to produce skilled workers or laborers internally. Many of the roles that require these types of skill immigrants from other countries in the EU hold. The Guardian quoted Bhuwan Kaushik, CEO of Spectromax (an IT-based company), saying:

“The impact of the Brexit will be sizeable and long term. There’s a huge IT skills gap in the UK. It’s going to take a number of years to close it. Leaving the EU at a time when the UK is in need of skills will be a huge blow to UK businesses, let alone the commercial opportunities that may be lost and could consequently stunt UK startup growth.”

So why does this matter?

Because labor matters regardless of what industry you’re in and what type of labor you require (skilled or unskilled labor). Even if you’re an American company who does not do business with other countries, it’s time to start digging a little deeper. Research the origins of your suppliers and their suppliers. Find out where your customers and their customers are located. You will likely find that somewhere in your supply chain there is someone who will be affected by Brexit and the effects will make their way to you.

Like I always say, pick your head up and take a good look at the world around you.  Just like the bullwhip analogy in a supply chain, one small ripple in the whip can cause huge results.

financial implications of brexit

Woodford Investment Management’s Report on Brexit

Immigration

With Europe experiencing the worst refugee crisis since World War II, this splintering of the EU is going to shock their already frail economy. In addition, they will continue to grow unemployment rates (The Independent). The Treaty of Lisbon (originally created in 2007) created stronger immigration policies to regulate those immigrating from “third countries” or in other words, countries outside GB. This treaty also set the procedures for countries who decide to leave the EU.

Now that GB has voted to leave the EU, they will start to transition into a third country position. This can result in the British Parliament enacting immigration policies. Travel between GB and EU may not be as easy as once before.

Stock

With any political action that causes major uncertainty and doubt in the market, it’s reasonable to expect that investors are going to react. Most investors are willing to take calculated risks, but when the final vote for Brexit tallies at 51.9% Leave vs. 48.1% Stay, the market becomes a scary place.

The day after voting day on Brexit, the pound fell to the lowest value in 3 decades. Oil dropped on Friday as well. Almost a week later, the stock market is only slightly bouncing back.

With the financial implications of Brexit panning out, London’s title as a global financial hub is being threatened as many investment banks are considering moving their headquarters to Frankfurt or Paris. This will not only impact GB’s stock market, but increase unemployment. The Financial Times has already reported that some of the major US banks (JPMorgan Chase, Goldman Sachs, and Morgan Stanley) are moving their operations to other financial hubs within the EU.

We expect Foreign Direct Investment (FDI) to decrease as the GB renegotiates its relationship with the EU. Assuming that Britain comes out with favorable terms, we expect FDI to rebound and recover the loss during this time period.

(During these uncertain times, it’s critical that the CEO has a wingman. Download our How to be a Wingman Guide to learn how to be a trusted advisor your company needs.)

Trade

Out of the many financial implications of Brexit, trade is most likely going to be the most important macro issue companies need to address.

Let’s talk a little about tariffs on imports and exports. If you have a facility in the EU and need something from GB, then you’ll now have to accommodate tariffs within your selling price. EU tariffs on exports were cut about 50% since the 1990s. Great Britain is in a good position at this time with exports.

Manufacturing

Going back to our conversation about labor, take a look at the manufacturing connections between GB and the EU. This division may result in higher manufacturing costs not only to cover new export/import tariffs, but costlier labor in GB as well.

Caterpillar, a heavy machinery company, owns a manufacturing facility in GB that employees over 9,000 employees. GB was a strategic location for them to optimize GB’s free trade relationship to the rest of the EU and their close proximity to customers in Europe, Africa, and Asia. What once was a competitive advantage is now in question. The Independent illustrates that this decision to approve Brexit has a ripple effect that will impact companies across the world.

Capital Economics contracted Woodford Investment Management to research the possible impacts that this separation of Britain from the EU would cause. They found that 63% of Great Britain’s exports are tied with EU members. While this most likely will not turn into anything more than an increase of tariffs, GB has 2 years under the Treaty of Lisbon to negotiate their withdrawal agreement. This is similar to a divorce followed by custody agreements.

Regulation & Innovation

There are no strong theories of how regulations might change. But it is important to be aware of changing regulations, especially when it comes to manufacturing facilities, imports, and exports. Expect security to strengthen in GB. As a result, it may result in new taxes or security measures to compensate.

Great Britain, as the 5th largest economy in the world, is not in a position where all of its innovation and brain power has disappeared with their split from the EU. GB may come to a stage where they will partner with the US and other countries to create a pool of innovation and ideas.

What impact does Brexit have on you? 

As everything unfolds within the next two years, look at your projections. Understand that if you have any international connections, you may be facing financial implications.  Be sure to adjust them as needed while keeping an eye on the economy.  Now more than ever, solid future planning can be the difference between weathering the storm or getting swept away.

Just like during any period of uncertainty, it’s important to recognize the opportunities presented.  Take stock of your operations. See if there are things you can do to strengthen your business while everyone else is chasing their tails.  The uncertainty caused by Brexit is similar to that we discussed in the Trump Effect Part 1 and Part 2 and many of the same strategies can be employed to deal with or take advantage of it.

Conclusion: Financial Implications of Brexit

By addressing these 4 macro issues, you’ll be better prepared to reduce the impact of the unpredictability of big events. Some of these big events include presidential elections and the 5th largest economy leaving the only fully economically-integrated union in the world.

In any event, try to narrow possible areas of influence down to 4-5; then start drawing out all the consequences.  This will not only leave you feeling more prepared for the battle. But it will also reduce the stress the people in your company may be feeling.

After being in the financial sector for over 25 years, I’ve learned that stuff happens in the world and we always find a way to move on. Times are tricky and the future is murky, but fortunately, it’s not the end of the world. As the financial leader, it should be your priority to guide your company during this process of analyzing how economic decisions like Brexit will impact your business.  Acting in this way, you become your company’s wingman.

It’s vital for you as the financial leader to be the trusted advisor your company needs. If you’re uncertain about where to start, I’d like to offer you a free white paper on How to be a Wingman.

financial implications of Brexit

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financial implications of brexit

With all the drama caused by Brexit, we wanted to give you something to laugh about! Here are a few of our favorite jokes and memes that have come out of #Brexit.

financial implications of brexit

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Hiring Expectations for Recent Graduates

employer's expectation

It’s the first week of May which means that caps will soon be flying in the air and college graduates will be entering the workforce.  What these new workers may not know is that employers often have an unspoken expectation that graduates arrive job-ready on day one…

Sounds pretty reasonable, right?

But with advances in technology, many “entry-level” positions of the past have been automated.  The result – fewer opportunities for new graduates to get in on the ground floor of an operation and learn the ropes. Instead, today’s graduates are expected to hit the ground solving problems rather than spending time getting their feet wet.

Oftentimes, graduates make academic decisions in order to increase their chances of securing the perfect job. With $1.3 trillion (and growing) in student debt, graduates are faced with the decision of whether or not to incur more debt to comply with increased expectations of employers.

What should be the employer’s expectations of those newly graduated job candidates?

Hiring Expectations for Recent Graduates

Accenture, a consulting firm, provided research and insights on college graduate expectations of employment in 2015. The results show that employers’ expectations and young people’s assumptions are not line.

College Graduates & Young Adult’s Expectations

An average 69% of college graduates believe that they need more post-graduation education or training to land their dream job. This could include, but is not limited to, earning an MBA, getting further certifications, etc. In addition, 77% of college graduates expect their future employers to provide additional training.

(Are you hiring new college graduates? Download our exclusive 5 guiding principles for building a star-quality team here.)

If you or someone you know is a recent college graduate, it’s imperative that you prepare based upon the employer’s expectations. While roughly 57% of employers provide on-the-job training, graduates should prepare for transitioning into the workforce as well as acclimating to the high standards expected.

(Know someone graduating this May? Pass this tip sheet along to them!)

Employer’s Expectations

Almost half (43%) of employers do not provide on-the-job training. Instead, these employers expect for these graduates to know everything. I suppose it makes sense to expect a 22-year-old who has invested $100,000 (give or take) into their college education to have the knowledge, capabilities, and resources to succeed in a position without any training, right?

My involvement with the Wolff Center for Entrepreneurship as a lecturer has taught me that graduates need training. Some of the students I work with have had numerous internships at prestigious organizations, but they still require on-the-job training (it could even look like a mentorship). But no organization is the same. Each potential employee that you hire has to learn the systems, the culture, and more importantly, how to be successful within your organization.

There are two things that employers can look at: skills and talents.

Skill [skil]: the ability to do something well; expertise

Talent [tal-uh nt]: natural aptitude or skill

I can teach skills, but I can’t teach talent.

Here are a few expectations I have of all employees (including new grads):

There are appropriate expectations for any job, but it’s important to analyze the expectations that you have and the consequences they may create. An employer should focus on how to discover the natural talents that a job candidate has than to teach skills and further develop their talents.

Employee Turnover

Employee turnover accounts for the cost of acquiring, maintaining, and firing/resigning an employee. There are also costs in every stage in sustaining an employee within your organization. This includes employees that quit, are let go or retire.

Considering employee’s compensation,  your investment in your human capital, training, hiring, benefits, and so much more, it’s no wonder that the #2 reason why businesses fail is because of employee turnover!

While there is no perfect equation to calculate an organization’s employee turnover,  it can roughly be calculated as the number of employees who have left divided by the total number of employees in that segment (# left in time period/# total employees in segment.) For example, if Company A lost one of its fifteen employees in one year, then its annual turnover would be 6.67% or 1/15.

No matter how you calculate employee turnover, it’s important to keep your expectations of your employees (including your new grad hires) reasonable. If you’re not careful about how to care for your team, then your employee turnover ratio will go through the roof.

Hiring a Star Quality Team

There are many factors that go into running a successful company. Hiring a star quality team is essential to grow your company. For most organizations, people are at the root of the company’s success. Whether you own a mom & pop restaurant, manage a local hardware store, or own an oil & gas equipment manufacturing company, your team is vital to your success.

employer's expectationEven though the price of oil is slowly climbing up after it’s long economic downturn, fewer professional jobs are available during this time; however, the demand for talented candidates remains high. This becomes a cyclical issue that you as the financial leader, CEO or decision maker will have to continually face.

Unfortunately, universities fail to efficiently train students to transition their school-based skills and talents to the workforce. Until universities transition students into employees, hire based on the potential for the employee to grow.

(Are you trying to build a star-quality team? Download our free, exclusive 5 guiding principles for building a star-quality team here.)

Hiring Expectations for Recent Graduates, employer's expectations

Hiring Expectations for Recent Graduates, employer's expectations

Accenture 2015 College Graduate Employment Research

 

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Can You Grow a Company With Only “A” Players?

"A" Player

LeBron James: hate him or love him, you have to admit that he’s a talented basketball player. When he started out his career in Cleveland, he was a promising player. Unfortunately, his gifts were too much for the team since there wasn’t a support system to cultivate his “A” player qualities. After 7 years, James move to Miami to play for the Heat. Almost overnight, LeBron became a national champion, not just an MVP.

Can You Grow a Company With Only “A” Players?

First of all…

  1. There are not many “A” players to select from.
  2. If you can find an “A” player, you can’t afford all of them.
  3. Not everyone can be an “A” player.

The brief answer to that question (can I grow a company with only “A” players?) is no. If you had only “A” players in your company or organization, nothing would get done due to ego, competition, lack of compensation, etc.

When I first started The Strategic CFO, I thought to myself… “I’m going to hire people like me.” I quickly figured out that a company can’t grow if it’s comprised of the same type of person or the same level of skill.

What made the difference?

The organization made all the difference. It is absolutely imperative that you have an organization that is set up for success.

Optimize the employees that you have currently. While they may be “B” players, it is your responsibility to set them up for success. Put in procedures and systems for them to succeed in their own capacity.

Do I Hire 1 A Players OR 2 B Players?

It depends. Oftentimes, you have to assess the person’s motives. Is the “A” player just looking at the position you’re offering as a stepping stone or a long-term commitment?  If it’s the latter, you might want to think long and hard before hiring them.  High turnover costs more than you may realize…

Remember, “A” players are expensive. What would be better for your organization?

What I’ve learned in my own company as well as through working with clients is to hire people with talent. I’m not necessarily looking only for “A” players, but also “B” players that are willing to work and learn and invest in their company.

Regardless of your decision, you must optimize the talent you’ve hired and retain that talent for your organization to be successful. The Number #2 reason why businesses fail is because of employee turnover.  In my experience, “A” players are in greater demand and, consequently, have more opportunities to jump ship.  Investing time and resources to nurture and retain loyal employees with talent is often a better strategy than filling your bench with superstars.

(Are you trying to build a star-quality team? Download our free, exclusive 5 guiding principles for building a star-quality team here.)

 A few months back, we posted a blog about how when there is a recession, fewer professional job are available. Oftentimes, when companies are scrambling to fill in empty key positions, they hire anyone. This is one of the major mistakes that companies make!  Decide what you’re looking for and make the right hire the first time. Hiring just anyone because you need someone right away can cause huge problems down the line.

What are Your Expectations?

Steve Jobs once said, “I’ve learned over the years that, when you have really good people, you don’t have to baby them. By expecting them to do great things, you can get them to do great things. The original Mac team taught me that A-plus players like to work together, and they don’t like it if you tolerate B-grade work.”

As a leader, it is crucial that you set your standards. I’ve always found that by having “A” player expectations, “B” players are able to rise to the occasion. For example, I could hire the best sales and marketing intern money can buy. But I don’t. I hire for talent, not specific skills.  The intern may not have the experience or the skills, but if they have the drive to succeed and the talent to adapt, I’m willing to invest in them.

Demand talented people. Know that talent is more valuable than skill. You can easily teach skill, but you can’t teach someone to be talented.

What Can They Do vs. What They’ve Done

Are you hiring because of what is listed on their resume or are you hiring because they have X amount of potential to grow and add value?

Enterprise, the car rental company, hires trainee managers at around $40,000 a year. While their pay isn’t comparable to other car rental companies, their expectation is that you will be promoted within 9-12 months. They specifically hire people that they would love to have as their manager. This is why Enterprise dominates the car rental industry and is continuing to grow.

Enterprise knows that they can’t afford the “A” players, but they can mold and transform those “B” players to be successful. And every year, their sales increases. This is just one example of how a company can grow without hiring only the “A” players!

With oil prices slowly crawling up from a low point in February, this may be the right time to start growing your business. While the economy can be volatile at times, it is smart to prepare and structure your business to withstand storms.

Download our free whitepaper 5 guiding principles for recruiting star-quality team today to start building the team your company needs to grow.

Lead Magnet - 5 Guiding Principles for Recruiting a Star-Quality Team

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A Players

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The Hooter Meter: Main Street’s Economic Indicator

On Thursday, natural gas prices hit a 17-year low. Ouch…

We often talk about how to manage your company and the best way to judge what the economy is doing. One of the simplest (and most often overlooked) things to do is to look beyond what’s right in front of you to the hints the economy has left behind.

Main Street’s Economic Indicator

Confession Time…Hooters_logo_1983-2013.svg

About once a month, I go to Hooters because I genuinely enjoy their wings. I love Hooters! (but don’t tell my wife)

The last time I went, I noticed that the Hooters girls were out in the parking lot with hula hoops rather than inside the restaurant serving.  Were things so bad that they had to pay employees to hula hoop in the parking lot as a marketing plea for people to come and eat at Hooters?

“How’s business?”

As an entrepreneur, I’m always curious about how other people view the economy.  My favorite question to ask people is, “How’s business?”  When I put this question to my waitress, she told me how sales had slumped and the restaurant’s business was slow, hence the hula-hooping waitresses.  Not surprising given the number of layoffs in the energy sector over the past 18 months.

What I learned through observation (strictly in the name of economic research, of course) and talking to the people on the ground was that the economic crisis had made its way into other industries.  Something I had expected, but my new economic indicator, the “Hooter Meter”, confirmed it.

Halliburton just announced 5,000 more layoffs this past week. Many other oil & gas companies are struggling to maintain their economic status in the industry. If I had just chosen to eat my wings and watch the game, then I would have had little indication that restaurants are now struggling.

In management 101, we learned to walk around and talk to employees before making big decisions. You can apply the same technique to the economy.  When visiting clients, I always ask my standard question: “How’s business?” Often, a client will start talking about how the economy is making business rough and how they are beginning to struggle… or I get a shrug and “it’s good” to avoid further discussion.

(Have you read our recent blog post: Mistakes in Troubled Times? Click here to read more about how you might avoid making mistakes within your company.)

Economic Indicator: Monitoring the Economymonitoring the economy

Although economic indicators are important tools that can and should be used, the extent of their effectiveness is limited. As the financial leader of your company, you must be able to walk around outside your business to observe your external environment. How is the economy affecting your community? Your suppliers (upstream and downstream)? Your customers?

(You can see all of the economic indicators provided by the US Census Bureau here.)

The Strategic CFO often coaches and consults with oil & gas companies. Many of Hooters’ customers work in the oil & gas industry.  By observing the affect of the economy on Hooters, I’m better able to prepare my company to be adapting to the changing economy.

Be an Effective Wingman

A CEO needs a financial wingman who can observe the economy and how it affects the company. The goal of this is to be able to react and prepare the company for anything. One of the ways you can achieve this is by doing what entrepreneurs do: keep your eyes and ears open for non-traditional economic indicators.

(NOTE: Want more tips on how you can be a trusted advisor? Check out our whitepaper How to be a Wingman!)

Wikipedia says this:

The wingman’s role is to add an element of mutual support to aerial combat. The presence of a wingman makes the flight both offensively and defensively more capable by increasing firepower and situational awareness, permitting the attack of enemies, and increasing the ability to employ more dynamic tactics.

With fewer professional jobs being available due to the recession, it’s important to provide the best advice to your CEO to prove your value. Financial people are often seen as overhead, but if they are able to provide insight (even if it’s found over Hooters hot wings),  they will be better able to create value.

monitoring the economy

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monitoring the economy

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Fail to Succeed

Life is full of moments, with many of those moments being failures. But each failure is an opportunity to learn from those mistakes, leading to success. It seems as we progress further into a technologically-focused society, society expects us not to fail. After all, failure means the lost of money. And nobody can afford that… But the tables have turned, and now you have to fail to succeed.

Being at the front of the flagship, pioneering the company, is a position where one is bound to experience failure. Famous-People-Who-Failed-3

Ken Jones, the director of the Wolff Center for Entrepreneurship at the University of Houston, continually tells his students to fail early and fail often. This is the primary lesson that any entrepreneur or business person should learn and accept.  Success derives from those failures.

more failures = more opportunities to learn = more likely to succeed and succeed well

Think about a foundation of a home.  Early structural engineers likely experienced plenty of failures. A strong foundation is needed to support an entire home, but if it weren’t for extensive testing to discover the perfect “formula” for building a strong foundation, then the home would be set on an unstable and potentially dangerous foundation. Failure is vital to success.

Embrace Failure

thomas edison quoteBy empowering employees through failure, the entire company has the opportunity to see positive growth. To embrace is to accept and support something (failure) willingly and enthusiastically. Each employee in an organization should fully embrace that failure leads to success. Create an atmosphere where it is okay to fail. Give your organization the freedom to fail.

Encourage Failure

Define the ability to encourage failure as the ability to stimulate development. If an organization sees failure as a development process, the training to a) recover after a mistake and b) learn from a mistake will be substantially better than if an organization neglects to see failure as a good thing.wright brothers

In their quest to build the world’s first successful airplane, Orville and Wilbur Wright experienced many “failures”.  The brothers viewed each crashed plane, broken bone, and failed test flight as simply another opportunity to figure out the right combination of variables to get their craft to sustain flight.  In fact, their data collection and analysis (i.e. “failures”) is what set them apart from others in the race to flight and, ultimately, led to their success.  Had they decided to throw in the towel because of their repeated setbacks, the world would have likely had to wait quite a bit longer for the first successful airplane.

Accept Failure

To accept failure is to fully believe that success is a by-product of failure. Mistakes happen.  How you view and recover from mistakes is the key.  If you look at each mistake as a chance to learn something new, then success will follow.

For example, say you didn’t anticipate that the economic slump would last this long.  Profits are down and cash is tight.  You made a mistake in judgment, and now you have to decide the best course to correct and learn from the mistake.  Rather than beating yourself up for not seeing the trouble coming, develop a plan to address the problem.  Find ways you can improve cash flow and act on them now.  Make a plan for how you’re going to survive until things turn around as well as a plan to keep you on track once you’re out of the woods.

Need some ideas on how to improve your cash flow?  Download our free tip sheet 25 Ways to Improve Cash Flow.

Fail to Succeed

Malcolm Gladwell explains failure simply:

Human beings sometimes falter under pressure. Pilots crash and divers drown. Under the glare of competition, basketball players cannot find the basket and golfers cannot find the pin. When that happens, we say variously that people have “panicked” or, to use the sports colloquialism, “choked.” But what do those words mean? Both are pejoratives. To choke or panic is considered to be as bad as to quit. But are all forms of failure equal? And what do the forms in which we fail say about who we are and how we think? We live in an age obsessed with success, with documenting the myriad ways by which talented people overcome challenges and obstacles. There is as much to be learned, though, from documenting the myriad ways in which talented people sometimes fail.

fail to succeed

For more about Malcolm Gladwell’s article on “The Art of Failure,” click here.

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fail to succeed

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Recession = Fewer Professional Jobs Available

If you haven’t been living under a rock for the past 15 months, then you have probably noticed that the decline in oil prices has resulted in many Houston businesses experiencing symptoms of an economic recession. What does a recession mean for you? Historically, recessions equate to reduced availability of professional jobs.

less professional jobsWhile the effects of the free fall in oil prices may have not spilled over to your economic sector yet, banks are already restructuring the troubled loans of oil and gas companies. This could result in more layoffs in the energy sector. In addition, it will likely impact other industries as well.

But even greater than the oil and gas industry, we’re seeing international economic upsets in China, Latin America, and in other areas of the American market economy. Some are expecting to see in 2016 a recession greater than that of the 2008 recession.

How Most Companies React to Recessions

Most companies without effective leadership would begin to cut the upper management who complete the 20% of the work. This leaves the lower level employees that complete 80% of the work. Many of our clients lay off the CFO and other “non-essential” leaders within the company. Why pay $50,000-$100,000 more for an employee when they only complete 20% of the work needed? Fewer professional less professional jobsjobs are thus becoming available because those positions are now deemed obsolete or as overhead.

Companies are removing experienced professionals from their positions due to their higher cost. Therefore, we tend to see many “battlefield promotions”. The military coined this term as a promoted soldier due to the death or injury of a senior officer.

Like in the military, employees are often promoted during a recession not necessarily because of their skills. But because their supervisor left or was laid off. CEOs or hiring managers feel that if these employees can do 80% of what their manager did, then asking them to do the whole job isn’t too much of a stretch.  While they might have the talents to succeed, they may not have the skills needed to complete that last 20%.

One way a business can protect itself from such a situation is by making a practice of hiring star-quality team members. These members can rise to the occasion when faced with rough economic times.

NOTE: Want some guidelines to develop a star-quality team? Download the Guiding Principles for Recruiting a Star-Quality Team to make sure your team can adapt in rough economic times.

Fewer Professional Jobs Available

As difficult as it is for those receiving battlefield promotions to get up to speed quickly, the fired managers face an even tougher challenge. Suddenly, there are more qualified candidates in the marketplace than there are positions available and fewer professional jobs available. The available jobs have been filled from within through battlefield promotions.

Highly-experienced individuals found that they have to take positions they are overqualified for at reduced pay.  This is where the value of the network you have built (or will wish you had built) really pays off.  Your connections in the marketplace can mean the difference between securing a desirable position, or settling for what you can find.

When looking for a job with limited openings in the marketplace, find an organization where you fit and can provide value.  Even if that means taking a pay cut, the money should come when things turn around.

Hiring & Restructuring Human Capital

Regardless of how this emerging recession is impacting your organization, realize that the #2 reason why businesses fail is employee turnover. Think about it. The costs associated with replacing an employee include: hiring, interviewing, on-boarding, training, mentoring, and waiting approximately 6 months before they find themselves accustomed and productive in your organization. The hiring process is getting longer and thus, more expensive.

As you’re building a new team or assessing your current employees for possible battlefield promotions, consider how you can build a star-quality team. A star-quality team will carry your company through tough times. Assess your current employees as if you were hiring them for the first time. If a battlefield promotion is necessary, who will rise to the occasion and provide the most value to your company?

In tough times, companies generally try to run leaner.  There are ways to do more with less and to measure the productivity of those limited resources. If you’ve exhausted all resources within your organization, then look at how to hire the right people to build your team.

Check out the guidelines that The Strategic CFO uses as we advise our Retained Search clients to help find the perfect fit. Click here for your FREE download of those guidelines.

less professional jobs

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less professional jobs

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Dealing with Employee Fraud

employee fraudRecently, I was visiting with a potential client who had been the victim of fraud.  Talking with him brought back unpleasant memories of the first time I discovered that one of my client’s employees had committed fraud against the company.  Despite the fact that it happened a long time ago, all of the emotions associated with the violation came flooding back.

Dealing with Employee Fraud

Betrayal

The first, and perhaps strongest, emotion is betrayal.  Anyone who has been a victim of fraud feels violated.  It’s not unlike finding out that your spouse or significant other has had a relationship with another person.  Most likely, the violator’s motive wasn’t personal, but it’s difficult not to take such treachery personally.

Shock

The next emotion I remember feeling was shock.  How could this have happened?  How could we have been so blind?  It’s hard to believe that this person you trusted could steal from you without you knowing it.  You feel duped and, as a result, may question your ability to judge a person’s character.

Anger

Once the hurt feelings and shock have passed, you will be angry. You may seek retribution. Unfortunately, it is often difficult to get your money back and district attorneys are reluctant to prosecute such cases unless there are large sums involved.  Even if they go forward with prosecution or seek compensation, any recovery is often less than the amount stolen.

Despite this fact, it’s important to pursue the matter regardless of the sum. It’s not just about you getting your money back.  It’s also about ensuring that this person doesn’t have the opportunity to violate someone else in the future.  Often, this is not the first time the person has committed fraud.  Even if you recover less than your losses, the paper trail created by the prosecution will be a red flag to anyone who runs a criminal background check on the individual in the future.

Eventually, most people move on past the emotions and learn to trust again.  Most likely, they won’t trust to the same extent, though.  The painful lesson learned is trust, but verify.

One of the positive outcomes of such an experience is tightened internal controls.  Because of this, the company can come out stronger in the end for having survived the theft.

How do you know if employee fraud is happening in your company? Check out our free Internal Analysis whitepaper to create the roadmap for your company’s success!

Dealing with Employee Fraud
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Dealing with Employee Fraud

Check out our article:  7 Warning Signs of Fraud

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