Nearly half of workers won’t be ready for the next recession, which will surely hit at some stage in the ear future.
The shocking data remind us of a Warren Buffett observation made several years ago: “When you see the tide go out, it’s easy to find out who was swimming naked.”
According to 89 leaders almost half of their employees lack the skills required to survive a financial crisis. This means that it will be very difficult for them to survive the next recession.
1,080 executives and employees have taken part in a study that asked them to rate their company on five key skills for coping with financial crises. These skills are important for an organization’s financial agility.
Open dialogue: Leaders and employees need to quickly recognize any changes that could threaten the status quo. If employees are not confident enough to voice their concerns, the company will be unable to respond quickly or effectively.
The most difficult challenge in recessions is mastering change. It is common to have to deal with budget cuts, staff reductions and reorganizations. Organizations that are able to quickly change from old habits and practices to more efficient ways of doing business will be able to weather the storm better.
Productivity: People are forced to work harder for less during financial recessions. Customers often demand lower prices so staff and resources are frequently cut. In order to compensate, productivity must increase.
Universal responsibility: Leaders under financial pressure may accept changes to reduce costs or increase productivity but fail to fulfill these commitments. It is a cultural norm to say, “I won’t hold you responsible if I don’t hold you accountable.” If accountability is not met, the organization will be unable to adapt to the effects of the recession.
Leadership: To meet the challenges posed by a recession, organizations must respond quickly and collectively. Leaders who can’t hold their employees together as they make changes to the company’s direction won’t be capable of making the necessary changes in the face of the recession.
It turns out that leaders don’t fear that their employees won’t have the skills necessary to manage a downturn in financial conditions. Respondents were asked about their skills and 52% of them said that their bosses didn’t have the necessary skills to manage a recession. On average, 7.3% of employees believe their bosses can plan, communicate and direct sustainable changes that will lead to success.
It was found that those leaders who had these skills in their teams were able to not only survive but also to rise from the 2008 recession. Recession-proof businesses have people, from executives to front-line workers, who are able to hold critical conversations about how to stay relevant, profitable, accountable, and accountable. Leaders and employees need to work together to become more agile, persistent, entrepreneurial, productive, and resilient before things get too complicated.
Leaders should practice and develop recession-proof scenarios as they prepare for possible recession.
Leaders must “train” their employees. Social skills training is often one of the first to be lost in a recession. These important skills, such as communication, leadership, and behavior change, are crucial when organizations and employees are under stress. Leaders who believe that recession is more likely should start training employees immediately, especially if their training budgets will be cut.
Employees may be able to rise in times of economic downturn. Employees who are proactive in learning new skills and volunteering for new tasks will be recognized and rewarded.
Even if the company has had to reduce its training budget due to recession, it may still have money available for professional development, especially if these skills are directly related to company requirements.
Remember that recessions do not last forever and new skills do.