Research Reveals A Pervasive Lack of Competencies Central to Success in a Financial Downturn.
When the next recession hits, as much as half of today's workforce won't be ready. According to new research from VitalSmarts, a Top 20 Leadership Training company, leaders say nearly half of their employees don't have the necessary skills to weather a financial downturn.
The recession-readiness study asked 1,080 employees and executives to rate their company on five general skills which were thought to be most important to weathering a financial downturn. The skills examined were open dialogue, change mastery, productivity, universal accountability and leadership.
Although the 89 executives in the study rated all five skills as important to a company's success during a recession, in their assessment, 47 percent of their employees are not sufficiently agile, persistent, or self-starting to handle a recession. Similarly, 52 percent also believed their employees lacked the skills to engage in open, productive dialogue in a way that would be needed. On the upside, executives had relatively less concern about their employees' productivity in a financial downturn.
"As the threat of a recession looms, executives question whether their people have the skills to adapt, candidly speak up, and hold others accountable," says David Maxfield, author of the bestseller Crucial Accountability and VP of Research at VitalSmarts. "Unfortunately, our research shows leaders who find their teams and organizations to be on the short-side of these skills during a recession may not only struggle to weather the recession well, they may struggle to weather it at all."
And it turns out, leaders weren't the only ones fearful of how their skills stack up against a financial downturn. When the 964 employees were asked about their observance of these five skill sets, they felt even their boss and other key members of the organization struggled to practice the skills.
Specifically, 52 percent of employees said their bosses did not have the skills needed to successfully navigate a recession. Only an average of 7.3 percent of employees were confident their senior leaders could plan, communicate or lead the sustainable changes needed for success.
"Will you survive the next recession, or will you thrive in it?," prompts Maxfield's colleague, Joseph Grenny, coauthor of Crucial Conversations. "Recession-proof companies have people—from front-line employees to executives—who can hold crucial conversations on how to stay relevant, profitable, and accountable. Interestingly, a lot of executives may not be any more prepared than their employees. Employees across the board need to be trained in these skills."
Maxfield and Grenny outline five competencies central to recession-proofing a business and encourages leaders to inventory their own and their employees' ability to practice these skills when under pressure.
About VitalSmarts: Named a Top 20 Leadership Training Company, VitalSmarts is home to the award-winning Crucial Conversations®, Crucial Accountability®, Getting Things Done®, The Power of Habit®, and Influencer Training®, and New York Times best-selling books of the same titles. VitalSmarts has consulted with more than 300 of the Fortune 500 companies and trained more than 2 million people worldwide. www.vitalsmarts.com
The purpose of the Recession Readiness Study is to broadly explore whether workers, managers, and executives believe their organization has the skills to either survive or thrive in a recession. The particular focus was on soft skills, productivity skills, and people skills, but not on technical skills.
Sample Population: 1080 people completed the survey. They described their job as either an employee (n = 498), a supervisor or manager (334), or an executive (n = 89). Twenty-five did not respond to the question. These respondents had been recruited from an online panel of volunteers who receive a free weekly subscription to the VitalSmarts newsletter (n = 280,400). They were asked to be involved in the survey in exchange for a chance to win a $50 gift card. The response rate was .3% and the survey was conducted in October 2019.
Survey: Consisted of 42 multi-part questions that asked people to rate how strong their habits and abilities were in 15 different areas and to also rate the habits of their coworkers and their boss. The general areas included open dialogue, change mastery, productivity, universal accountability, and leadership. They were also asked how big of a role these different habits and abilities played in their company's past success, how important they would be if a recession hit, and how ready workers would be for that recession.
II. Basic Results
A. Executives Believe Their Workforce Isn't Ready for a Recession (Table 1). When analyzing the responses of the 89 executives, they believed the five skills of change mastery, productivity, open dialogue, universal accountability, and leadership had all played an important role in the past success of their company. (They scored these items as having an average importance of 4.1 out of 5.0.) But although these executives believed these five skills would be equally important in helping weather a recession, they rated their workforce as being much less prepared than needed (3.0 out of 5.0).
B. Employees are Worse at Change Mastery and Open Dialogue (Table 2). When specifically asked to indicate where employees were either not at all ready or only slight ready, two skill areas stood out as most seriously lacking. Executives believed that . . .
C. Employees Don't Believe They are Skilled Up or Prepared Today to Face a Recession (Table 3). When analyzing the responses of 964 employees and managers, their responses were similar as the executives. They believed the five skills of change mastery, productivity, open dialogue, universal accountability, and leadership had all played an important role in the past success of their company. (They scored these items as having an average importance of 4.0 out of 5.0.) But although these executives believed these five skills would be equally important in helping weather a recession, they rated their workforce as being much less prepared than needed (2.7 out of 5.0).
D. Employees Don't Believe Their Bosses Have the Skills Needed to Face a Recession (Table 4). When specifically asked to indicate whether their bosses were either not at all ready or only slight ready for a recession, an average of 52% said their bosses didn't have the skills to face a recession. The biggest skill problems bosses saw with employees were the same one's that employees saw with their bosses.
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