subject: How a Recession Changes the Rules for Executive Staffing [print this page] How a Recession Changes the Rules for Executive Staffing
Copyright (c) 2010 Trey MarkelThe days of vice-presidents in every department and huge holiday bonuses have come to an end. For those who benefited from those practices, that is bad news for you. For those who run companies that once had that type of set-up, you now have an opportunity to make positive changes to improve your bottom line. The corporate structures of yesteryear, if used in today's economy, will lead you straight to the poor house, along with all of the hard-working men and women you employ. The recent recession has changed all the rules, especially when it comes to executive staffing.Having come to the conclusion presented in the previous paragraph, the next question is, "What do you do about it?" Don't be hasty and just fire all of your management personnel and lay off your vice presidents. That wouldn't solve any financial problems you might be having. On the contrary, it would create more. The severance packages alone would send your stock into a tail-spin. The potential lawsuits and union problems would cause additional headaches, leaving you with a new issue - thousands of dollars in legal bills. The best way to not have to deal with any of that is to set up a plan of systematic cuts and develop a new strategy for executive staffing.The Evaluation PhaseBefore you can make changes, you need to look at the existing structure of your company and determine where exactly those changes need to be made. If you're top-heavy, with too many chiefs to run only a small number of Indians, the solution is simple. Cut the fat. Get rid of the non-essential management personnel and combine responsibilities to create new job descriptions for those who remain. Unfortunately, if you've been in business for a while, you know that it's rarely that simple. How do you decide who to cut and who to keep? Can anyone who has worked for you for years really be classified as "non-essential". Tough decisions need to be made.Look at it from another perspective. If you have all of that management and administrative staff in place, obviously you don't need executive staffing. What about adding more non-executive staffing? As the country and the world crawl out of recession and the economic picture brightens, are you ready to expand? Give the chiefs a few more Indians to help them get the job done. If you do that, will you be taking on more than you can handle or is this an opportunity to finally become the company you always dreamed of being? There are certain niche markets where a select few will make a fortune in the next decade. Are you positioned to be one of them?Cost-Cutting with Outsourced Executive StaffingAnother option available to you is outsourced executive staffing. With internet technology, it's no longer necessary to have management personnel onsite. A lot of companies are converting positions that were traditionally onsite employee jobs into independent contractor positions that can be done remotely from outside the office. Executive staffing is no exception to this. If you outsource it and classify the designated party as a contractor instead of an employee, you'll save on taxes and benefit costs. You also won't have to pay for mandatory health care, an issue that is burying a lot of small businesses right now. Costs have gone up and profit margins have decreased during the recession. Things appear to be improving, but it's important to make adjustments that take into account the changes made in the past few years. Mandatory health care might last and it might not. Be prepared either way.The down side of outsourcing is that you lose a certain level of control. It's much easier to keep your finger on what's going on in your office when the people doing the job are actually in your office. With remote contractors you need to trust that they'll make the right decision. This is particularly true with executive staffing. If your Vice President of Asian Operations is someone from Asia and your company is here in the United States, you need to trust that person to make the right decisions over there on your behalf. Having them in place where your clients are located is a huge benefit, but only if they do the job correctly. Make sure you screen candidates thoroughly.Streamlining the Executive Staffing Search ProcessDetermining where to cut and what staffing changes you want to make are only two of the tasks involved in recreating your company. Streamlining the executive staffing search process is the third. Once you've decided how many people you need, what positions you want them in, and whether you will classify them as employees or independent contractors, you now need to decide how you're going to find them. Executive staffing search can be expensive and time consuming? Do you want to do it yourself or use an agency to do it for you? Is the fee you pay to an agency justified or does it cancel out the cost-saving philosophy of hiring new personnel?The tough decisions keep appearing in front of you. That's the price of being a business owner. In relation to executive staffing issues, those decisions have to be made based on numbers, but the human factor needs to be taken into account. Your company is the sum of its parts, and some of those parts are living, breathing human beings who have families to support and bills to pay. When you make cuts, it's not difficult to keep that up front, but what about when you add people to your workforce? The decision to provide someone a job can be harmful if you plan on eliminating that job in the near future. Make sure you have a definite long-term plan before you bring new employees or contractors on board. If the job is temporary, state that clearly from the beginning. If it's an executive staffing position, you can classify a temp as a consultant and take a tax deduction for the added expense.
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