Slower growth for the U.S. economy in Q3 2010
Today, it was announced that the U.S. economy grew at 2.4% in Q2 2010, much lower than 3.7% from Q1 2010. I would imagine lower growth to continue in Q3.
The usual factors such as, low consumer spending, high unemployment rate(9.5% in June 2010), debt and less access to credit will be responsible for lower growth in Q 3 also. However, the major factor that will contribute in Q3 and Q4 is absence of the homeowners tax credit.
Considering all these factors, I would say that the economy is expected to grow at a slower pace in Q3 (around the same as Q2). However, growth in Q4 will be lower than that.
Does Talent Management matter during Recession?
Before our recent recession started, most human resource managers were involved in innovative ways and means to keep employees engaged. With the onset of recession and millions of layoffs, we wonder how much employers are concerned about talent management. Many companies now are more concerned about how many people to layoff.
Employers should not be totally blamed for their actions. However, they had to be careful that in the process it can hurt their company in the long-term:
- If they layoff most talented pool, they will not be able to do well after the recession is over. So employers have to carefully weigh against who is the best fit for the job.
- They should not only consider the short-term consequences but also long-term effects too. Layoffs should be considered as the last resort. Employers should weigh against other possible alternatives before they layoff.
- Possible alternatives are temporary shut-downs, decreasing work-hours, freezing salary, and even temporarily suspending 401(k) contributions.
- It is important to understand that employees should not feel the uncertainty of their future in the company. On the other hand, less engagement by supervisors during recession can result in loss of interest for talented employees. Their lack of interest on the job can result them to seek other jobs. This is the time when many other companies will be in search of talent. The disengaged, dis-satisfied employees will be the first to leave the company after the economy improves.
So the big question remains how far employers should engage in talent managent during recessions?
Well, that’s an open debate. However, it is crucial that emlpoyees should feel that they are important to the company even during the recession. This is an important ingredient for the company’s long-term policy and commitments. Experts at Watson Wyatt Worldwide has discussed these issues wonderfully- http://www.watsonwyatt.com/strategyatwork/render.asp?pageid=roundtable&articleid=21163
