Monday, March 9, 2009

Spend to End the Recession

A few weeks ago, I attended a small luncheon hosted by the President of one of Canada's largest bank.

He gave an overview of the economic crisis and I learned a lot.

The United States accounts for about 20% of the world's Gross Domestic Product (see CIA’s World Factbook for US and World) and the US consumer accounts for over 70% of this amount. This means US consumers account for a staggering 14% of the world's economy.

He also said that in the past, consumers led us out of recessions but this one is different. Consumers are hurting and economists believe government and corporations are our best hope for a quick end to this painful crisis.

Corporations need to start spending money again. But they need to spend money wisely... not on gazillion dollar bonuses to a select few but on things that matter.

Wells Fargo cut out all their recognition and reward programs. They did this to be politically correct. However their CEO publicly mourned their loss of these programs and commented on how important recognition and rewards are in today’s economy through an open letter in major US newspapers. (Click here to read Roy Saunderson’s, my friend and colleague's response to the Wells Fargo’s letter.)

I agree. Spending money on recognition and rewards is a wise investment.

But I also feel that a distinction must be made between rewards and recognition. Rewards cost money... if you need to cut costs, reduce your spend on them.

However, recognition is free. The only thing you need to spend is time. Never stop spending time recognizing your people!