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The Upside of a Downturn

Steve Pogorzelski, Jesse Harriott Ph.D., Doug Hardy

May 07, 2008

"A slowing economy has tangible burdens, as employers become cautious in hiring (or even lay off workers). More subtle and insidious is the way even a gentle slowdown in consumption can trigger a well known vicious cycle: Lower corporate revenues lead to job insecurity, which causes consumers to tighten spending, which hurts revenues, which causes more corporate belt-tightening, and so forth until something (government spending, easier credit, unforeseen demand) halts the cycle. This cycle offers a break in the fevered efforts to attract and acquire the most talented employees, a chronic problem that has beset booming economies for the past decade. To take advantage of a temporary lull in the chronic shortage of top talent, managers in HR and executives leading companies must adopt the longer-term practice we call the Engagement Cycle."

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