So how can corporations continue to cut costs coming out of the Global Financial Crisis? They have laid off the workforce to the bare bones, closed divisions and departments, consolidated and closed facilities.There really is no place else they can cut.
So although this will not be a popular process for those of you in the current workforce it should allow you to understand where the world of business is trending and plan accordingly. I have spoken to quite a few CEO’s over the last few months and I can tell you that they are still looking to cut costs. In one of my discussions, the CEO and I discussed how to use the incoming workforce to do this.
So if you listen to the news today they are saying that employee confidence is up and that productivity is up. What does this mean? Well I am not an economist but they are saying that companies are looking to hire and expand their workforce. Gallup stated today that although
“…79% of employees saying the financial situations at their companies are good/excellent and 76 % say they are getting better. …findings also reflect profit/growth concerns in the U.S. business community, as fewer employees say they are very/extremely confident that their companies will grow (52%) and be profitable (64%) during the next six months.”
The latter part of this quote is what I am hearing from CEO’s. So how do you use the trend of Social Media to cut costs? We have talked about ways to increase sales and warm leads, how corporations are using social media for customer and employee communication to increase productivity, and how to strengthen a corporations brand. So what else is there?
Well we began this week discussing “Relational Onboarding”, and this is the key. Not the way we onboard but the key is the incoming digital workforce. You have heard me discuss “digital natives” Wikipedia defines this as a
“person for whom digital technologies already existed when they were born, and hence has grown up with digital technology and computers…”
“A digital immigrant is an individual who grew up without digital technology and adopted it later”
There is a discourse that states that neither statement is completely true. Not all children and young adults have a fluid knowledge of technology and not all older adults have a corresponding awkwardness with technology.
But corporations can definitely capitalize on the incoming work force. Gen Y is the largest group in the workforce this year, 2010, surpassing the Baby Boomers. The key areas to help corporations cut costs are the following.
- Hire this work force at a lower rate of salary than the current work force.
- Pay them a commission on top of that salary.
- Use their talents (digital talents) to move the corporation toward doing business differently.
So here is an example. You have an employee working for the organization and they are being paid a salary plus commission that equals $250 to $350k. You hire a Gen Y at a starting salary of $50k, pay them another $50 to $100k for commission and they now make a total salary of $150k. This is a savings of $100 to $200k annually per employee.
This Gen Y workforce also brings with them the skills and knowledge needed to sell and communicate with the digital consumer and businesses. This group of individuals will work with companies that provide the tools they are used to. Gen Y and other consumers and businesses will also, in the very near future, only do business with businesses that do business the way they want to do business. All that means is they will do business with companies that communicate with them, allowing them to join the conversation in real time. Purchase through electronic means and yes even look at the values of the corporation to make sure they match up with theirs.
Gen Y brings all of the above to the table.
Change is always hard. But it is time for a change and corporations can use this change to their advantage. When I got my MBA one of the things I discovered was that corporations only goal is to “increase shareholder wealth”. Executives understand this. With Social Media they can bring about the change and “increase shareholder wealth” by hiring Gen Y’ers.
The above is usually only spoken about in the board rooms. Now you know. Depending where you are in the spectrum plan accordingly.