Quick-fix Layoffs Strategy Could Hinder Long-Term Economic Recovery

Business tips from the Ascentive team

Companies relying on short-term measures to deal with current economic conditions, such as cost-cutting by way of layoffs for a potential increase in return-on-assets, risk long-term decline, according to Deloitte’s 2011 Shift Index, released today by the Center for the Edge. In fact, the Index reveals that corporate economic performance in the United States has been declining over time as even the highest-performing companies struggle to maintain strong ROA rates while increasingly losing market leadership positions.

ROA is an indicator of management’s efficiency at using assets to generate earnings. It is calculated by dividing a company’s annual earnings by total assets. Despite labor productivity gains of nearly 250 percent, Deloitte’s study finds that public companies in the United States have experienced a 75 percent drop in ROA over the last 40 years.  The negative ROA trend is playing out across virtually all industries tracked in the Shift Index, suggesting a long term decline caused by deep structural changes.  If companies remain too focused on the current economic conditions and the implementation of short-term solutions such as layoffs, they can be vulnerable to even greater competitive challenges in the long run.

“A profound structural issue weighing on our economy began well before the current economic downturn and likely will continue for the foreseeable future unless business leaders address the underlying challenges,” said John Hagel, director, Deloitte Consulting LLP and co-chairman, Center for the Edge. “In this recessionary period, companies risk making decisions, such as layoffs, traditionally seen as prudent quick fixes that instead weaken their workforces and disrupt the flow of important knowledge, leaving them highly vulnerable amid intensifying global competition.”

According to the Shift Index, a more effective approach for companies may lie in shifting their view of employees from cost items to be cut as pressure mounts to a powerful form of asset capable of delivering greater and greater value over time. Companies that invest in their workforces under tough economic conditions may be able to drive greater returns during periods of recovery.

The Impact of the Super-Empowered Individual

Deloitte’s report indicates that super-empowered individuals are driving companies to be more transparent and find new approaches to cultivate brand preference and loyalty among consumers. Technology provides individuals with the power to drive short-term market fluctuations and is allowing them to leverage digital tools to organize in ways that previously were not possible. The Consumer Power survey (the basis of one of the Shift Index metrics) finds that 49 percent of consumers strongly agree they have more information about brands and products than ever before thanks to the Internet and social media tools. As a result, consumers wield greater power via social networks and sharing information in real-time. The survey also found that consumers trust businesses less often and seek out information via alternate sources rather than “buying in” to traditional advertising, manifesting in greater brand disloyalty.

Companies have the opportunity to use these same digital tools to draw new consumers to their offerings.  According to Deloitte’s analysis, social software also can be used within companies to cultivate a passionate workforce and tap into critical knowledge flows at all levels in order to reverse declining performance.

“Super-empowered individuals and passionate workers connect with like-minded people through social media to advance dialogue, learn and collaborate,” said Hagel. “Organizations should tap into both when seeking champions for a particular cause or product.”

Tapping the Passion of an Aging Workforce

According to the Bureau of Labor Statistics:

The U.S. labor force is projected to reach 166.9 million by 2018;

This represents an 8.2 percent increase from 2008, with an increasing proportion of older workers;

Workers aged 55 years and older are anticipated to leap from 18.1 percent to 23.9 percent of the labor force during the same period.(1)

As the workforce ages companies should consider how to engage workers of all ages and enable them to tap into diverse knowledge flows to deepen their experience and allow for increased collaboration. The 2011 Shift Index suggests that fostering effective participation among workers of all ages can be a key driver of performance improvement as companies draw upon the deepest set of knowledge and skills.

“The ability to ignite and sustain the passion of older workers is becoming more and more important as the labor force ages. Organizations should explore options to retain retiring employees as advisors within the company,” said Hagel. “Passionate older workers could be assigned roles where they can focus their energies on taking on performance challenges that have a measurable effect on a company. They often have well developed networks of relationships both within and across companies that can be very helpful in sustaining more robust flows of knowledge, accelerate learning and improve performance.”

(1) United States Department of Labor: Bureau of Labor Statistics, Occupational Outlook Handbook, 2010-11 Edition

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Ten Resume Mistakes to Avoid

Business tips from the Ascentive team

When hunting for a job, your resume is an important tool that you can’t go without. In digital form or hardcopy, a resume allows a prospective employer to quickly review your experience and evaluate whether you are the right fit for an available position. But there are a few mistakes you can make when creating your resume that can seriously impact your chances of getting job. Here are the ten worst mistakes you can make with your resume:

 

1) Typos

Typos are the worst offenders, and the easiest to avoid. Always proofread your resume and have a few friends read it over. Don’t just leave it to your word processor’s spell check program. The spellcheck will enforce proper spelling but may supply you with the wrong word for your needs. And when you are checking over your resume, be sure to read it aloud.

 

2) Flowery Objective

Don’t waste space with a flowery objective at the beginning of your resume. Replace the objective with an accessible tagline stating what you do and your expertise.

 

3) No Career History

Hiring managers want to see the career progression and impact you made at each position. When formatting your resume, start with a header followed by a strong profile section detailing the scope of your experience and areas of proficiency, a reverse chronological employment history emphasizing achievements over the past 10 to 15 years, and finally a summary of your skills and education.

 

4) Only Detailing your Job Duties

Go beyond showing what was required at your previous jobs and note how you made a difference at each company, providing specific examples. When developing your achievements, ask yourself how did you perform the job better than others and how did you overcome and project-related challenges.

 

5) Too Long

Keep your resume to a page. If you have to go over, include information that you definitely think will get you an interview.

 

6) Personal Pronouns and Articles

Always write your resume in a telegraphic style. There should be no mentions of “I” or “me,” and a minimal use of articles.

 

7) Irrelevant Information

Only include information relating to the job. This includes any hobbies and interests.

 

8 ) No Keywords

Keywords are crucial to your resume, as they allow hiring managers to better find you when doing a search online. Determine the keywords for your resume by reading job descriptions that interest you, and including those words in your resume.

 

9) No Summary

Always include a career summary that demonstrates your skill level and experiences directly related to the job. This summary is one of the most important elements of your resume, as it’s the element that should persuade the employer to hire you.

 

10) Wrong Contact Information

Finally, Always double-check your contact information, especially if it has been updated recently.