By Frank Mulligan

After a few weeks of not listening to the endless doom and gloom on CNN and the BBC (I was on holidays), I seem to have removed the monkey from my back.

It’s a liberating feeling to leave the downturn behind, even if only momentarily.

But not everyone is in this fortunate position. Most staff in China have never had to deal with an economic downturn before, and they are likely to go through a process of denial, anger, bargaining, depression and finally, acceptance. HR’s job is to get them through the stages faster than they can by themselves. It is not helping that the Olympics in Beijing happened so recently, but there is little you can do about this.

The faster you get them from denial to acceptance, the quicker you can tap into their inate abilities, and get them to contribute to solving the particular downturn in your company. But what could you do to help them through?

Here are a few suggestions:

A.  Open up the communications channels for them so that they can see the effect of the current crisis on China businesses. This will help them get past the denial stage, and overcome Beijing Olympic Delusional Syndrome.

You might want to look at the usual TV news bulletins as sources of information, but a better source would be the industry-specific websites and blogs that go into detail on what is happening in your industry. The more sources that are telling them that there is a crisis in China, the more likely they will move out of the denial stage.

If you have been reticent to report bad company news because it is seen as confidential issue, report bad company news. If you have an internal ban on staff blogging, remove the ban. Let staff tell each other how serious this crisis is.

B.   Make cost cutting efforts the responsibility of the entire staff and not the management. Those who get the current crisis will inform those who don’t why it is that cost cutting measures are being taken. Staff who are still at the denial stage will get the message, and those at a later stage will see a way for them to contribute to your success.

C.  Offer staff training on personal finances. Suggest that this is being done because they may need it soon. This effort will get across the seriousness of the situation and the possibility of terminations, but it will also help at all stages. The graduates of this training will understand the consequences of the crisis better, but also feel much more in control of their future.

D.   Make a significant sacrifice on the company’s part with the objective of getting across the seriousness of the situation. This should help the anger stage because it is hard to be angry towards someone who is making a sacrifice.

E.   Consider other sacrifices, for example, paying the employee portion of social insurance ie. The 4 Funds. Put this across as an attempt on your part to get cash into the hands of all staff. This cash, you can honestly suggest, may be needed in the very near future.

You could also take a more symbolic approach and cancel the big, annual management meeting in Hainan, again even if you can afford it. The objective here is to get the message across that the current situation is not sustainable.

F.   If the self-sacrifice approach does not work, you could look at a more punishment oriented model. Consider the possibility of cancelling this year’s CNY bonus, even if you technically you can pay it. Put it aside for payment later in the year so that you don’t feel like a complete heel, but get the message across that the bonus is contingent on increased market share and individual performance. If you think that, for whatever reason, most of your staff are at the anger stage, skip this measure.

G.   The bargaining stage will be difficult to handle, and you can expect to see many, many staff come to you with sob stories about how difficult things are for them, and by implication how they should be the last to be laid off. They are not lying.

The best approach would be to make it clear that all issues in the company will be dealt with on a professional basis ie. no special pleading allowed. Train your managers to deal with this issue, and show them how to keep a professional distance from their subordinates.

H.   The depression stage may be the easiest to deal with because staff just need to see that you care, and that there is a way out of this crisis. Together we can do it!

One of the many solutions you can try here is to create a wellness program. As a good corporate citizen you want to help staff improve their health, so that they will be able to weather the storm better. Many of the larger companies around the world offer the relatively cheap solution of influenza shots but it is too late for this now. You might want to look at general programs that include exercise and changes to the food in the company canteen.
If the money is available you could look at in-company annual medical checks that include blood pressure, cholesterol, X-ray, cancer markers etc.

I.  Transform your bonuses (the one you were not going to give), or excess cash, into training vouchers. The vouchers should be redeemable for training that can be shown to enhance the person’s company-related skills. This will help staff get through the depression stage.

J.  For whatever little recruiting you are doing, use the downturn as an opportunity to increase the quality of your workforce. More importantly, signal to existing staff that you are bringing in strong, experienced people to drive the business. Advertise this!. The good staff will see this as a solution, and the not-so-good ones ie. the non-contributors, will know where the door is. Specifically identify teams that need stronger management, and go get it for them.

K.  Start a Succession Planning program and signal to your key staff that there is light at the end of the tunnel, and that they are part of the solution.

Once you have gotten your staff to the acceptance stage you should see a big change in behavior. Your efforts will have given them the belief that the company cares, and the hope that a solution has been identified. It should also have made clear that they are part of the solution, and will specify their contribution.

I realize that this post is insufficient to the task of dealing with your particular version of the economic crisis. If you don’t have many more thoughts and suggestions that would get staff to the acceptance stage, I would be very surprised.

Frank Mulligan, Talent in China