You can listen to Brendan’s testimony, or read the summary below
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We are involved in an extraordinary situation at present one which we have not seen or experienced before. The greatest impacts on our business are:
“… We were forced into a situation where it was necessary to look at downsizing. Within the company we do not have an in-house human resources department. As a result the responsibility and the task of dealing with human resource issues have to be dealt with by the managing director, in effect myself. This was a very challenging situation there is nobody within the organisation who is trained or qualified in HR, We used external resources to advise us on what are the best practices, but just because the book says this is the way something should be done, that does not necessarily mean that it is the optimum way in the specific industry in which you are operating.
“… It was also necessary to deal with the situation giving consideration to the feelings of the individuals involved. We were making people redundant who had been employed by BMC from the time they left school. These people had never worked anywhere else. I had to deal with these people from a human point of view. We did our best at it worked out as well as can be expected in the circumstances. We were open and honest with everyone and thankfully we had no issues with any of the individuals involved. …”
Credit insurance companies …
“… We also have the additional problem of collecting money and how best to do that in the situation where we have companies who are not paying. It is not a situation that they have the money and they are taking advantage of the current environment and using it as an excuse but rather that they are also having difficulties collecting money. …”
“… In addition to this the performance and rating of each individual company in the current climate is dramatically and negatively affected by the opinion of credit insurance companies. The worrying and annoying aspect of this situation is that the opinion that they are taking is not on the basis of you as a company, it is on the basis of the sector that you are operating in and their exposure to that sector. So, they take a negative position because you are in the construction sector in Ireland which they know is very high risk from their point of view …”
“… all large companies use and pay for this credit insurance, but the bottom line is that the credit insurance which is given, it’s like people giving out umbrellas when the sun is shining, you know, these insurance companies were delighted to give credit insurance when there was no need for it, but now there is a need they say no …”
“… There is no point in paying these huge sums of money to insurance companies, who, in real terms, are not going to be there when we really need them, we are better off being selective about the companies we are doing business with and doing our best to protect ourselves in this way.
This whole situation needs to be re-visited in light of the current global financial environment in which we are operating …”
“… In effect, the future of small to medium size companies like us is at the mercy of these large insurance companies they could quite simply put us out of business, by removing credit insurance cover on us from our major suppliers as a result BMC are limited in what we can buy from our big suppliers, and therefore cannot trade, so even though we are in business and profitable our ability to trade has been restricted to an extent that we could be forced out of business. This is a situation that should not be allowed to continue …”
Articles I found useful to manage the situation :
Global explanation of the crisis (written on wikipedia)
A survey about how HR priorities & challenges have changed during the global economic downturn (conducted by Hudson)
You can also find interesting sites about credit insurance with this Google search
Other article published by Brendan MEEHAN : Switchboard service & maintenance: an attractive business!
Related post on the blog about Factoring: Yes!, being a small company I can finance big projects