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Addressing Challenges of Midsize Companies
At AchieveNEXT, we understand the concerns of midsize companies. As with all our services, we use our extensive expertise in this market to help the leaders of these organizations achieve their goals and realize their full potential.
Among the issues are:
- Attracting and maintaining talent
- Maximizing growth
- Optimizing leadership training
- Tackling complex human resources challenges
- Funding growth
Our recent five-part series of articles in Harvard Business Review, “Understanding Midsize Businesses,” address some of today’s biggest challenges for midsize companies and our strategies to address them. Read on for a summary of each article.
The Great Resignation hit middle markets companies especially hard, necessitating a fresh approach to attracting and retaining talent. While midsize companies have some weaknesses in this area, they also have some distinct strengths that their human resources leaders can leverage in this toughest talent market in recent memory.
The middle market grows, on average, faster than the rest of the economy, which means it has a higher demand for talent. But midsize companies often aren’t as readily recognized as some larger companies, don’t have as deep pockets to “throw money at the problem,” and often have smaller human resources departments.
To address this problem, leaders of midsize companies should pinpoint their specific challenges, including which types of positions are most difficult to fill, and expand their talent pools. Revamping the recruiting process, even with actions as simple as rewriting ads and job descriptions emphasizing the benefits of working with their companies, are another concrete way to tackle the talent shortage.
Lastly, midsize companies must craft successful retention strategies to include leadership development for “better bosses,” explicit internal career paths, an inclusive culture, and offer competitive salaries and benefits.
A common problem among midsize companies is that the CFOs’ sales forecasts often don’t match those of the sales leaders. That can be due to a lack of collaboration and subpar communication.
Sales leaders and CFOs should invest in sales training and improve forecast accuracy and transparency. Focusing on strengthening their relationships with each other and their customers will help them close the gap between finance and sales by developing common goals by agreeing on shared KPIs.
Many midsize companies believe they can’t fund growth when they may be able to do so simply by increasing efficiency and productivity. Becoming more efficient allows midsize companies to free up capital and direct it where it will create revenue, generate strategic growth options, and increase enterprise value.
To become more efficient, midsize companies should target more than just cost-cutting. They should look at equipment, inventory, technology, and materials, rather than just focusing on labor inputs. They can free up capital by avoiding paying bills early, collecting receivables too slowly, or holding inventory they don’t need.
Lastly, they should pivot if necessary. They also may want to get creative by rethinking real estate needs and being more strategic about digitalization.
Some midsize companies don’t conduct rigorous leadership training because they are short on money and time and unsure if this type of education fits their staff.
But not doing so could cost midsize companies because there is a correlation between superior talent planning and company performance.
Effective leadership programs address urgent problems, focus on scaling and growing, pass on culture and skills, and can be applied in the field. Middle-market companies must also provide internal career opportunities and pass on culture in addition to skills.
Today’s midsize company CHROs often must tackle significant challenges without the bigger budgets of large companies.
There are five main issues that middle-market CHROs are facing right now:
- Growing their workforce
- Training their current employees in new skills without extensive resources to do so
- Improving HR processes to accommodate the increase in online activity that began during the pandemic
- Motivating and engaging employees
- Addressing pressing DEI issues
CHROs should seek help from their COOs and peers and bring in external expertise when possible. They can also use their own company’s strategies to help set priorities and work to gain the attention of top leadership. In midsize companies, CHROs often have greater access to the top leaders.
Achieving the Next Level of Growth
AchieveNEXT helps business leaders, their teams, and enterprises to boost performance and realize their full potential to achieve their next level of growth. Our clients are large corporations, media companies, educational institutions, and trade associations. Tell us how we can help you!