Spring 2009
Kingdom Magazine

9 HR Strategies to Help Overcome Economic Obstacles
By Paul J. Sarvadi

That Arnold Palmer’s last round of professional golf came at the 2006 Administaff Small Business Classic is a bittersweet honor. That event marked the end of one of the most enduring professional careers in the history of sports; one spent effectively managing the physical and mental challenges and pressures of being a world-class pro athlete on a daily basis. The drive and determination Arnold Palmer exhibited throughout his professional golf career has also been showcased in his career as an entrepreneur and small business owner. He understands what it takes to succeed in both arenas, and his ability to successfully deal with adversity and unforeseen challenges is something to which all business owners can relate, which is just one of the reasons why he serves as an Administaff spokesperson.

Taking risks, facing adversity head on and coming out a winner, succeeding when the odds may be stacked against you – these too are issues business owners face every day, especially in today’s economic climate. And while some may see the current economic situation as a challenge or outright threat, Administaff sees it the way the best entrepreneurs, such as The King, see it – as a unique opportunity to build upon their success. Now is the time to maximize all of your resources and seize the opportunity to beat the odds.

The following strategies are designed to complement your unique business plan and help your business grow and succeed, even in today’s climate. These practical human resources concepts have produced proven results, helping thousands of small and medium-sized businesses succeed. Determine how they can best help you implement a course of action for your company in 2009.

Focus intensely on profit-generating activities.
Business leaders should invest as much time as possible in front of clients. Personal interaction with your customers can go a long way toward easing fears and uncertainty. It gives you a chance to thank them for their business and ensure customer satisfaction. A face-to-face meeting with prospective customers might alleviate questions and prevent you from losing out to the competition. In addition, calling on former clients may rekindle relationships and generate additional business.  Outsourcing non-core, but essential, human resources functions provides business leaders with the additional time necessary to focus on this important strategy.

Capitalize on new opportunities.
A volatile marketplace may serve to your advantage by providing an array of potential new business ventures you might not normally consider. Shift your focus on these opportunities, such as an acquisition, or products and services that may enhance your existing offerings. Making smaller investments now may yield greater results in the future.

Upgrade your workforce.
One of the most powerful tools any business owner can have during times of adversity is a solid workforce. Layoffs from big corporations have produced an abundance of talented employees for smaller companies to consider. If you are planning to hire or downsize, take a conservative approach. This is the safest way to avoid costly mistakes that could do more harm than good. A closer assessment of your current staff, along with restructuring, may help optimize your organization.

Provide peace of mind in trying times.
A shaky economy often requires owners to make tough decisions. Demonstrating compassion for employees who leave your company can send the right message to employees, their families and the community. Offering valuable human resources services, such as outplacement assistance, shows your willingness to go the extra mile. Sometimes the smallest actions can make a world of difference.

Make use of incentive compensation plans.
Studies have shown that when employees are happy, a company’s bottom line is positively impacted. Motivation is a powerful concept and can serve as a persuasive tool to help achieve new goals. The best incentive plans not only increase productivity, but also strengthen client satisfaction. When aligned with your company’s objectives, an incentive program can help employees adjust their focus on new priorities. Oftentimes the simplest gestures, such as a gift card or an extra day of personal time off, provide the necessary encouragement to achieve results.

Head off rising employment risks.
Employment-related claims and litigation are two of the most costly headaches for business owners. As you reshape your organization, your exposure to employment-related risks also increases. According to some estimates, the average lawsuit in the United States can cost as much as $650,000. Therefore, it is imperative for business owners to protect themselves and the company by carefully examining and properly managing their risks.

Reduce your company’s operating expenses.
While you are reassessing your organization, look beyond the typical cost-cutting measures. One of the biggest areas of concerns for business owners is the rising cost of health care. Take a closer look at your employee benefits program. Are you getting the most for your money? Is reorganization a possibility? Researching all of your options might help you find a better solution, or prevent you from paying unnecessary expenses. In addition, make sure you and your employees are taking advantage of all value-added services.

Make the most of your training resources.
Many businesses overlook the importance of training. It provides employees with the latest skills to hone their performance, which is important during slower times. Training can also help increase productivity without adding more overhead. In addition, managers and supervisors can gain effective leadership skills to help them better manage employee performance. Many training resources are available online, which greatly reduces travel expenditures.

Improve employee communication.
Communication is a vital pathway that links employees to an organization. It is a fact of life that external factors, such as the economy, are going to affect employee attitudes and emotions while at work. The best way to help reduce fears is through open and honest communication. Allowing employees to share their concerns and ideas will help ease fears and provide them with a chance to participate. People are more likely to accept change when they are instrumental in the process. In turn, rumors will be put to rest and employees can focus on their work.

Owning a small business in today’s unpredictable economy can be challenging. But dealing with adversity is nothing new to most entrepreneurs. Remember why you decided to start your own business. That same unwavering commitment, determination and innovation that brought you on this journey in the first place will help you succeed in the long run.

Paul J. Sarvadi is the chairman and chief executive officer of Administaff (NYSE:  ASF), the nation’s leading professional employer organization (PEO).  Administaff serves as a full-service human resources department that provides small and medium-sized businesses with administrative relief, big-company benefits, reduced liabilities and a systematic way to improve productivity. The company operates 51 sales offices in 24 major markets.  For more information about Administaff, call 800-465-3800 or visit http://www.administaff.com.

Reprinted with permission from Kingdom Magazine, Spring 2009.