Comments on: Workforce Planning: Preparing For the Next Economic Downturn http://www.ere.net/2007/09/24/workforce-planning-preparing-for-the-next-economic-downturn/ Recruiting News, Recruiting Events, Recruiting Community, Social Recruiting Mon, 23 Nov 2009 11:02:01 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Aaron Horvitz http://www.ere.net/2007/09/24/workforce-planning-preparing-for-the-next-economic-downturn/comment-page-1/#comment-3135 Aaron Horvitz Mon, 24 Sep 2007 06:56:00 +0000 http://www.ere.net/2007/09/24/workforce-planning-preparing-for-the-next-economic-downturn/#comment-3135 It?s absolutely astounding how much fear plays into investor psychology. Naturally people fear market down turns. However it?s important to note that market down turns are difficult to predict. Allan Greenspan addresses this point quite succinctly in his recent book, The Age of Turbulence. He clearly demonstrates that we are no better off then we were 50 years ago predicting business cycles. Too often analysts and CEO?s pour over econometric studies and stochastic models to determine the best approach to market down turns. If history is any guide, we can be certain there will be a market bust after a market boom. It?s inevitable. It?s also inevitable that poorly managed and ailing companies will lay off their most highly compensated and best employees in a turbulent economy. When those downturns do come, and inevitably they will, company presidents should look for opportunities for value based hiring. Conversely, employees should seek ways to maximize their marketability while the market is strongest. By hiring top flight professionals into a lay off environment, a company will be well positioned against its competitors when the market recovers. Just like there are busts after every boom, there is always a recovery after every bust. Therefore, I would argue that a company should take it?s cues from the best investor in the world, Warren Buffett 'A market downturn, doesn't bother us. For us and our long term investors, it is an opportunity to increase our ownership of great companies with great management at good prices. Only for short term investors and market timers is a correction not an opportunity.' - Warren Buffett It?s absolutely astounding how much fear plays into investor psychology. Naturally people fear market down turns. However it?s important to note that market down turns are difficult to predict. Allan Greenspan addresses this point quite succinctly in his recent book, The Age of Turbulence. He clearly demonstrates that we are no better off then we were 50 years ago predicting business cycles.

Too often analysts and CEO?s pour over econometric studies and stochastic models to determine the best approach to market down turns. If history is any guide, we can be certain there will be a market bust after a market boom. It?s inevitable. It?s also inevitable that poorly managed and ailing companies will lay off their most highly compensated and best employees in a turbulent economy. When those downturns do come, and inevitably they will, company presidents should look for opportunities for value based hiring. Conversely, employees should seek ways to maximize their marketability while the market is strongest.

By hiring top flight professionals into a lay off environment, a company will be well positioned against its competitors when the market recovers. Just like there are busts after every boom, there is always a recovery after every bust.

Therefore, I would argue that a company should take it?s cues from the best investor in the world, Warren Buffett

‘A market downturn, doesn’t bother us. For us and our long term investors, it is an opportunity to increase our ownership of great companies with great management at good prices. Only for short term investors and market timers is a correction not an opportunity.’

- Warren Buffett

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