67. Light at the end of the tunnel

Dear Gerard

It’s good to hear that in Eastern Europe the demand for labour is growing rapidly. This is a confirmation that the recovery from the crisis is continuing. The signals from the World Bank and the IMF and a number of economies are already more positive. Does this mean we can start to take it easier? No, certainly not. Growth in countries such as France and the Netherlands is fragile. In France, the problems are more urgent. Structurally, very little has been done. Labour costs are much higher than in Germany and the unions are extremely powerful. It is almost impossible to fire staff, people take to the streets because the retirement age was raised from 63 to 64, while 67 is the norm in neighbouring countries. Unrest in Ukraine and Syria also remain negative signals for the world economy.At the micro-level, entrepreneurs remain keen to keep their organizations ‘lean and mean’. Flexibility remains very important, organizations must be able to act quickly. One of my friends is the owner of a company in the infrastructure sector. He has seen falling volume and profits in recent years, but he is still standing, while many companies in this area have failed. The core of the company consists of experienced workers. When the market is growing and he receives more projects, he uses freelancers to do the work. When there is less work, he uses the core staff and less freelancers, but he continues to keep (potential) clients satisfied. Sometimes he undertakes work at below cost price in projects, but he does not deliver lower quality.

Your solution regarding your capacity problem to give more responsibility to staff who have customer contact is also a solution to increase flexibility. Indeed, good account managers know exactly how the market is moving and can anticipate. Communication with the customer, which is translated into adjustments, is essential. To assure the customer that you can deliver the most flexible bases staff you can catch on the demand. In addition, you must communicate more with clients to keep control and not only be dependent on the account manager, otherwise they may start their own businesses with your customers. Your employees can be creative as well as your customers! It’s your job to keep the top performers at your company loyal and motivated. This seems easier now because the crisis is fully visible on the radar screen, but soon all the problems of the crisis will disappear like snow when the sun is shining.

Regards,
Jan Stam