Posts Tagged ‘Risk management’

 

Over the past several years, the news has been filled with huge layoffs by companies trying to cut costs. Is this a strategy that really helps a company? Every day, in the course of networking, I have the opportunity to talk with, not only people who are in transition because of cost cutting efforts, but also I have opportunity to talk with people “left behind” after the cost cutting. The story is so often the same. Significant resources of knowledge and skills have left the company, leaving those left behind swimming against a rip current. The more they struggle to make up for lost resources, the further fall behind on objectives. They are asked to do more and more, all with decreasing efficiencies and effectiveness. Managers are looking to leave the company because they no longer have the assets in place to meet the demands for the company to succeed.

In a corporate environment, every person in the company, through the tasks and projects they work on, needs to contribute in a way that they are helping the company do one of three things:

  1. Help the company generate revenue
  2. Help the company reduce costs
  3. Help the company mitigate risks

If an employee is not doing this to a degree greater than their annual cost, it really doesn’t make sense for the company to be paying them. The company should not wait for a crisis to let go of underperforming employees. Typically, companies expect to cost savings or revenue generation 3 to 5 times the cost of the employee. If the employee is achieving this success, it NEVER makes sense to cut the employee to save costs.

Does your company understand the true value brought by your employees? Is your company costing itself more by trying to reduce employee costs?

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What do you do? How do you answer this question? Most people I talk to respond by giving their title. When giving an elevator pitch, most people name tasks that they perform on the job, often giving a laundry list. When I ask an IT manager what they do, they might talk about implementing and or maintaining systems for a company. They may talk about particular architectures or programs that they have expertise in, but all this does is brand people as a commodity. It does nothing to demonstrate their value. What is the value of implementing a new system? What does that system do for the company? How are employees able to improve performance with the new system? Does the system actually achieve the goals that were envisioned? Was the system implemented on time and under budget? What were the skills (hard and soft) that you used to achieve your results? What were the actions that you took leading to the results? These are the types of questions that need to be answered so that you can articulate your value. Any work an employee does needs to do one of three things for the company. It needs to help the company generate revenue, help the company save costs, or help the company mitigate risks. If your work is not doing any of these, there is no reason for a company to pay your salary. By understanding the value your work or projects bring to a company, you have an ability to start articulating what value you can bring to a prospective employer. You are no longer a commodity, but you are a value added solution.