In this guest post, Michael Fishwick (main photo), CEO at independent, Australian-owned and operated Venetian Media Group, explores why swinging the job axe to cut costs is chopping the legs out from under your business…
No matter what industry you work in, 2020 has been a challenging year.
Some businesses and people have suffered greatly, others have benefitted, and some are just getting by. We have all been impacted in some way, shape or form.
In March with only a few days notice, businesses were ordered to shut down and work from home indefinitely. No one saw it coming and many reacted by going into survival mode.
The advertising and media industry were hit particularly hard by the pandemic and within a month most media businesses had announced cost cuts in the form of redundancies, reduced hours, forced annual leave and pay reductions, all in an attempt to “save jobs”.
This is a natural cost-cutting reflex of leaders wanting to keep their companies afloat, but it got me thinking…has the pandemic put a price on people?
For me, this issue is twofold. Firstly, putting pressure on livelihoods through reduced pay or reducing staff (the backbone of your business) is only a short-term solution. If a business cannot survive a few bad quarters with reduced revenues then surely something greater is the problem.
Secondly and more importantly, what value do we place people in the first place?
And, it seems even those who have avoided the mighty job axe are being asked to work more for less.
A global study published by the US National Bureau of Economic Relations found that while the flexibility for employees to arrange their working hours to accommodate household demands, they’re also working longer. The average workday has increased by 48.5 minutes, the number of meetings increased about 13 per cent.
There’s no doubt businesses would have saved millions of dollars by trimming down their staffing costs and cutting back on their people power. But while cutting this expense may look good on the books, if we look at this on an individual level, it’s also the value of real talent and expertise for clients that you may be missing (or your competitor may be capitalising on).
Despite VMG’s out-of-home revenues declining significantly, we wanted to protect our people and their wellbeing even if that meant taking a hit on the bottom line.
We also made the decision to push ahead with our growth strategy. This placed a high importance on team as we consider culture to be a strategy, and that profits are an outcome of that.
As leaders we should be continually looking at long-term growth, and people are your company’s greatest asset.
Diversifying our business and the hard work that our team has put in to help grow VMG has enabled us to better weather the financial storm brought on by COVID. And as the economy has begun to open up again, we’ve been able to move quickly on opportunities because we placed people over profit in the short term.
The road to a full recovery is long and uncertain, and while incentives such as JobKeeper have enabled some employees to maintain their positions at minimal cost to businesses, it was never intended as a long-term solution.
And as the government begins to reduce its employment subsidies and mortgage holidays end, there is a potential threat of a second wave of these layoffs.
As a leader, I’d urge you to consider: at what point do you consider profits are more important than the people who work hard to procure them?
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