Suppliers’ and the business media are pumping out messages that we should learn from the late 90s downturn by:

• avoiding cutting people overhead without careful planning;
• continuing people development ;
• retaining ‘talent’, or whatever you call your key staff.

Well, they would say that wouldn’t they!

Actually it’s good advice.  In the ‘90s organisations lost muscle as well as fat.  Their performance in the downturn was affected as well as how quickly they reacted to better conditions in the long or (let’s hope) medium term.

But it’s generalised advice.  Soft sales lines, a mismatch between projected revenue and committed spend, recent increases in headcount or a very antsy bank manager need immediate fixes.  How can you act quickly while not damaging the people core of your business?

Tests might seem a luxury in such times.  I’m not so sure.  Here are a few ways I think they help – and where they can’t.

• You still have to recruit some people, even if less frequently.  With 3 million unemployed by the end of ‘09 you’re going to get more applicants for each job, a lot of them time-wasters.  Tests are at their most useful in this situation– saving time and money.

• We shouldn’t trust subjective judgements in recruitment decisions.  The same is true in evaluating the performance, skills and effectiveness of existing staff.  Managers’ ratings and appraisal are as prone to the Barnum and Halo effects as their short listing of candidates.

• Should you use tests in making decisions about redundancy – for deselecting?  This is controversial but my answer is a resounding ‘No.’  The situations are different.  But tests can help people you have let go by giving them advice on their next steps.  Support redundant staff in this way and you’ll be – and be seen to be – a good employer.  This will help your local brand.  It’s also the right thing to do.

• Tests are development activities.  Offer existing staff a good non-threatening test with feedback and you’re investing in their growth.  It’ll have benefits for you and them.  And it costs a lot less than a training course.

During hard times people get worried and mistrustful; they spread rumours.  Culture and commitment suffer when you can least afford it.  Think of tests as a renewal of a contract between you and them.  They sway that your staff matter to you as whole people, not just as units of production.

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