This has been the most frequently asked question of me over the past month. Employers are looking for any insights or trends to best prepare themselves for the months ahead. We are already seeing record highs in Oregon unemployment and anticipating the “free fall” of initial workforce cuts and layoffs to level off by Q2 2009.
While the number of unemployed may level, unemployment benefits will likely be extended, as has been the case historically, thus increasing the overall cost burden to businesses. Most of Xenium’s client activity this past month has been supporting the planning and implementation of these difficult transitions, managing the related risks, and lending assistance to find placement opportunities – relying on our staffing Partner, Express Employment Professionals, wherever possible.
Other claim costs to keep an eye on are the possibility of expansion of federal labor and employment laws, specifically the Employee Free Choice Act (EFCA) the number one priority for organized labor. Previously blocked by the Senate, this act would reverse current union certification process including open rather than secret voting. Similarly, reversals of Title VII and possibly amendments to the Civil Rights Act of 2008 relieving statute limitations or damage caps for lawsuits are other possible changes on the horizon.
These risks and costs can be daunting, but Xenium clients benefit from the expertise and experience we lend to proactively managing through difficult and threatening economic conditions. For additional insights on how best to prepare during this economic storm, read on for excerpts of “CEOs – All Hands On Deck” presentation by Sequoia Capital, a California-based Venture Capital firm.
Survival to Preserve Capital
- “Must Have” Product
- Established Revenue Model
- Understanding of Market Uptake
- Understanding and Forecasting Your Customer’s Ability to Pay
- Assessment vs. Competitors
- Cash is King
- Need for Profitability
CEO Operational Checklist
- Engineering: Decrease headcount for next release?
- Product: What features are absolutely necessary?
- Marketing: Measure and cut what’s not working
- Sales and Business Development: Are you getting full ROI on your expense increases?
- Pipeline: What’s probability of close?
- Finance and Cash Burn: Where can your payments be deferred? What departments are essential?
Solutions
- Perform Situational Analysis
- Adapt Quickly
- Use a Zero-based Budget
- Make Cuts
- Review Salaries
- Employ a Heavily Commissioned Sales Structure
- Bolster Balance Sheets
- Become Cash Flow Positive
- Spend Every Dollar as if it were Your Last