Don't Forget the Foundation...

The heartbreaking stories from the devastating earthquakes across the globe recently — Haiti, Chile and China — invariably talked about the increased destruction and loss associated with poorly constructed commercial buildings, schools and dwellings. Absent well-designed and constructed foundations and infrastructure, these structures collapsed or at a minimum experienced far greater damage than the rest. A clarion call for building structures securely in the first place and for avoiding the misery that can ensue otherwise.

I think this is a great metaphor for businesses. Particularly going into the recovery as we all get back to doing what we do best, delivering services, expanding sales, and running at that "faster, better, cheaper" speed in order to make up for all of the ground lost over the past 2 1/2 years.

The cautionary note however as busier times approach is to make certain you have put good foundations in place. They are the basics that support successfully growing and accelerating a business in any market condition (in a sustainable way) but particularly when planning for wherever "recovery" takes us. Basics that include (but that are not limited to):

• Clearly communicated business objectives
• Well-vetted staffing plans developed with input from the organization
• An appropriate, compliant employment process
• Competitive and compliant compensation systems including worker classification
• Timely employee, supervisor and management training
• Strategic risk management systems in support of all of the above

Creating foundations like these are definitely important in volatile environments like this, particularly when punctuated with new government programs and legislative requirements, a restless workforce, and anticipated job-churn once new job opportunities begin to emerge. Avoiding any additional stresses or disruptions to recovery efforts is probably one of the most important risk management efforts you could undertake right now.

As only one example we know the Department of Labor and the Internal Revenue Service have announced an interagency initiative to crack down on misclassification of employees as independent contractors. A new federal bill supporting this was introduced on April 22, 2010 that would further allow the two agencies to refer instances of misclassification to each other. This comes just at the time many companies are considering how they will utilize interim and contract employees as part of a flexible staffing approach going forward. They had better get it right to avoid complications.

Regardless, appropriate policies and practices designed with your specific business goals in mind, supported by consistent adherence to those business routines with everyone's understanding why they are important will make operating in this and any future environment easier. There still will be challenges but it will be easier to overcome them.

Beyond that, if you want to hedge your bets perchance everything else fails (certainly no reference intended to Wall Street) you might find Charles Wilson's risk management advice at RiskSmart Solutions of interest. He talks about additional preventative measures to consider to head-off potential problems and get you on solid footing.

Strong foundations support continued strength building, which is exactly what we need to be doing right now in our businesses. So don't forget the foundation.

Merit Resource Group has been helping businesses create solid business-HR structures for more than 20 years. If you have questions about how to create specific approaches to some of the basics mentioned above, contact us and we will be glad to help. We are the local market leader providing HR expertise and talent and we would welcome the opportunity to put that to work for you.

As always we are interested in your comments.