Recession-Proofing Your Staffing During a Trade War

​How can a prairie CEO and their leadership team plan in advance to reduce staff expenses if needed during a potential recession?

Last week, I shared how to prepare a scenario plan to prepare for a looming recession due to the ongoing trade war.

Part of scenario planning is determining in advance what changes you would make to the business for each of three potential scenarios (worst case, best case and middle case) to be proactive about protecting and optimizing the business.

This includes, if needed, identifying any expenses that would be cut. In this kind of scenario, planning to reduce non-staff expenses may not be enough to protect the business.

So, how can we plan to reduce staff expenses while retaining great talent to ramp up quickly when things pick up again?

Some ideas our coaches and clients have chosen or considered in preparing for previous downturns include:

• Asking staff to take a voluntary pay cut with senior managers making a bigger, committed sacrifice? Plan to repay salaries afterward if possible, with interest, again, if possible.
• Reducing all staff to 80% time.
• Having people take all their leave and/or holidays while things are slow.
• Letting people take leave without pay as much as they want.

Look at things from a long term perspective. And the key is to explain in detail why you’re taking a certain approach and sharing all the other actions you’re taking to protect the business.

If ultimately you had to plan to reduce staff, who would you remove and who would you keep? It’s best to know this in advance and be prepared to act swiftly when needed, as letting people go can otherwise be something that is avoided and drawn out, significantly affecting the company’s financial health.

• Use a values-performance talent assessment matrix to identify A players to keep and what B players to keep to develop. Plan to make adjustments at the C and D player levels.
• Plan to let A and promising B players know you want to keep them to encourage them to not look for work elsewhere out of worry for their future.
• In extreme scenarios, a business may go into hibernation and pivot, hibernating their current business while creating a new business that works in the new environment. In this case,  plan to keep the people that would be needed to take you forward with the new business.

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Plan the staff expense reductions for any scenarios that need it, in order to be prepared to take swift action, to conserve cash, protect the business and protect the most jobs possible.


For other ways to navigate these challenging times with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below.

Access Your Trade War Success Guide

If you are a prairie CEO who wants to grow a thriving company more quickly, more easily and with less stress and headache, please contact me here.

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