Having been in the working world for many years I have been through a number of economic cycles.  They are pretty predictable. The economy starts to grow and businesses expand and then the economy contracts and companies try and “right size.” Right size is a euphemism used in the business to describe getting costs in line with revenue, a process that typically involves laying off people. 

Here is the thing that no manager in his or her right mind would ever admit to you: when business starts to slow and the meeting is held where managers are informed that they need to reduce their headcount by 10 percent, there is a collective sigh of relief in the room. Why is that? It’s because the managers who did not deal with their problems early on now have an easy way out. 

Let me explain further. Most managers do a lousy job of selection. That doesn’t change, but the economic environment does. It expands and contracts. During an expansion period companies are hiring left and right. It is like a feeding frenzy.  A warm body is better than nobody. When times are good and a company is making a lot of money, it can cover up a myriad of sins. 

When business starts to slow, the finger pointing starts. The “C”-level player that the manager had hired is becoming more difficult to find work for because of his or her lack of competence.  The time of year for performance appraisals rolls around and due to lack of managerial courage, our management cadre fails to deal with its problem. They do not give accurate feedback to their poor performers and they do not put them on a performance improvement plan. I guess they assume that divine intervention will fix the problem and maybe it does.  The economy worsens, and they get called into the management meeting and are instructed to submit their list of the 10 percent of their workforce that will be affected by the layoff. 

The sigh of relief I mentioned earlier is that the manager’s performance problem just got fixed. The non-performer is being laid off and the person’s separation can be blamed on economic conditions and not the real problem, which is his or her lack of performance. 

In these downturns, things don’t usually stop with one layoff. Now you have gotten rid of your deadwood, but the next 10 percent affected by the layoff are good performers who have been doing their jobs well, and through no fault of their own lose their paychecks. 

The managers do a little soul searching and admit, if only to themselves, that they played an important role in this scenario. They promise themselves that the next time they start hiring, they will do a thorough and an effective job and never hire poor performers just to fill open positions. They will study the person’s resume before the interview and not just walk in the room and say, “Tell me about yourself.” They will be clear about the skills they want to assess in candidates and ask for specific examples of where the candidate did that in their last job. They promise they will not come out of an interview and ask their people what they thought of a candidate and accept the answer, “I liked her,” without that being backed up with specific data.

They keep saying this mantra, and not doing anything different, until the economy turns and they start interviewing and hiring talent the same way they did the last time the economy started growing. How did you like that candidate? I liked him. Me too. Let’s make him an offer. Three months later you find yourself frustrated that that person you hired is not performing. He may be a good guy, but that doesn’t make him a good performer. When I teach people selection skills I often say, “In God we trust; everyone else bring data.”

You know what? If you keep doing the same things, you will keep getting the same results. Why would you be surprised that the results were any different this time than all the other times?

EASI·Consult® works with Fortune 500 companies, government agencies, and mid-sized corporations to provide customized Talent Management solutions. EASI Consult’s specialties include individual assessment, online employment testing, survey research, competency modeling, leadership development, executive coaching, 360-degree feedback, online structured interviews, and EEO hiring compliance. The company is a leader in the field of providing accurate information about people through professional assessment. To learn more about EASI Consult, visit www.easiconsult.com, email ContactUs@easiconsult.com or call 800.922.EASI.