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Effects of Investing in Your Team Before, During, and After Economic Uncertainty

Posted By Kim Watson, Corporate Alliance Production, Tuesday, March 31, 2020

THE EFFECTS OF INVESTING IN YOUR TEAM BEFORE, DURING, AND AFTER ECONOMIC UNCERTAINTY

Research considered the impact of investing in team members before, during, and after times of considerable economic uncertainty. Those efforts included job-related selection activities (i.e. personality inventories, cognitive tests, interviews) and training. The researchers determined that the degree to which organizations made those investments in the quality of employees created a strategically valuable resource when the economic environment changed.

Firm-level data across 12 years from 359 firms was considered. Analyses indicated that investments in people influenced firm profit growth. Further, results revealed that firms who more effectively staffed and trained outperformed competitors pre- and post-recession, even after controlling for prior profitability.

Thus, selective staffing and training may be used strategically during economic uncertainty. That strategy will prime organizations for optimal growth and competitive advantage shortly after economic recovery.

I’m happy to provide a free 30-minute consultation to discuss strategy. Please reach out through my website: alliancepro.com

 

SOURCE: Kim, Y., & Ployhart, R. (2014). The Effects of Staffing and Training on Firm Productivity and Profit Growth Before, During, and After the Great Recession. Journal of Applied Psychology, 99(3), 361-3898.

 

1. EBIT scores based on Korean monetary unit (won)

Tags:  Competitive Advantage  Growth Strategy  Staffing  Strategy  Training 

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