Silver Lining in the Recession, the Truth

Right away I will tell you this is definitely not a "Pollyanna" article about some positive spin on how great it is to get back to the basics by being broke and delusional. This article is a realistic look at the way we fool ourselves by being content with pat answers and smoke and mirrors business practices. And in a recession, the truth comes out.

When people hear about businesses going broke, stores closing, jobs being cut and homes are being foreclosed upon, etc. they are not thinking "wow, this is positive news". The above events are a sign of tough economic times. The problem about hearing this kind of news story or even if you are hearing it first hand from the employee or business owner is: you don't know all of the facts as to how this came about. And realistically, you never will.

Here are a few examples of "food for thought" when you hear some of these events in the business world:

1. Greed, mismanagement, poor business decisions, personal problems, I could go on and on, just because companies have labeled it "cutting back" or "out of business" or "economic downturn" don't think for a minute that they all deserve sympathy or even empathy. You never know which of these businesses should have closed or could have been shut down years ago. There are some great companies out there and there are also some very bad ones. The bad ones have just kept living on business loan after business loan and because they were "in business" they could keep getting loans and keep the doors open even if they should have been closed.

2. Cutting front line, low wage employees very rarely saves the company money. The reason this practice is so popular is because it "appears" to be a good quick fix, when in reality if you were to do a 5-10 year research/study on how these actions really affected this business, you will find that it wound up costing the company more money in the long run, not savings. If every one of the top executives or the owners in this company would take a 50% pay cut for that 5 years; now that will be substantial savings.

3. Some of these companies/franchises/offices that have cut their work force may not have needed to do so right now because of profit reasons. They are just using this timing as an excuse so they can get the restructure done now and not be thought of as the bad guy. Also, most managers jump at the chance to site "hard times" to get rid of someone who they see as problem employees.

4. Small businesses and entrepreneurs have their style of smoke and mirror tactics. Many an entrepreneur has opened their own businesses because they couldn't work well with others and could not keep a job. That translates into trouble in the business world. Small business owners are also known for being able to talk family members, friends, etc. into working for very little or for barter and that usually blows up after awhile. So if this company actually had to pay salaries, the business would go under.

I have been a business consultant for many years and because I am privy to seeing everything that goes on in a business, including behind closed doors, I actually have a positive reaction when I hear that some of these businesses are closing. I have often shook my head at some of the small business owners who really had gone broke after putting everything they have in their business, but yet they are too proud and somehow find a way to find more money to stick into this lost cause. Or the huge mega corporation that have let all of the minimum wage staff go and now have to pay agency fees that add up to about 120% more than the wages they just cut. Just because "Oh, my bad, I guess we really did need someone doing this and that position, but now we don't have time or people to interview or train the new hires".

So, in conclusion I have to say that some of this news that we are hearing, although it is traumatic to the individuals who are losing their sole income, these people really weren't working for the best companies in the first place. It was only a matter of time, and now hopefully the best companies will survive and need someone to hire, (soon).