STRATEGIC ROLE OF HR DURING RECESSION

The recession is an opportunity for HR professionals to step and contribute strategically. In the classical strategy paradigm, we begin by looking at the macro economic environment. Then we look at the micro-environment - what affects us and our competitors. Next, we establish which strategic factors HR influences directly. Finally, we drop down to our tacticsThe recession is about the creative Human Resources Management. The HRM Function is asked to bring new ideas, to change the HRM Processes and to develop or change the procedures. And this effort has to be cheap or it has to cut the costs of the organization. The HRM Innovation is easy in times of the business growth, but the recession is not good for big innovative HRM Initiatives.

The HR Management has to focus on unpopular innovations during the recession as the role of HR during the recession is to save money to the organization. The senior management expects all the support functions to bring innovative ideas and solutions which will lead to stronger organization, when the next growth era comes.

The point has to be focused by HR management during recession are as follows:

• To optimize the manpower strength.
• To take strategic initiatives to increase the productivity and efficiency of the entire organization.
• To work on compensation benefits.
• Redesign training and development programs.
• Ensure your organization’s policies and handbooks are up to date. Remember that an annual review of your employee handbook for compliance by an experienced professional is highly recommended. Also, each employee having a copy of the employee handbook is not enough. They have to be able to read and understand the content. Be sure that you provide employees a handbook in a language they can read and understand.
• Layoffs are never easy. Ensure you are familiar with your legal responsibilities in a lay off to minimize your organization's risk. Be sure that you have properly defined the criteria you are using to determine who will be let go.
• Alternative Workweek Schedules and Flexible Scheduling can maximize production and cut-back on overhead costs for organizations. Be sure you follow all of the DLSE rules when deciding if an Alternative Workweek Schedule or Flexible Scheduling is right for your organization.
• Cutting Pay may be an option to consider to save on today’s costs. Is this really an option for your organization? How are your pay scales as related to the market? Are you willing to risk losing key employees whose talents may be needed by other organizations, because you chose to reduce their pay at this time? Remember, you should not cut pay without a recovering strategy of how you will re-adjust when the economy has turned.
• Downsizing does require internal document maintenance for your organization. As jobs are modified and responsibilities are increased changes also must be made to your job descriptions.
• On the other hand the HR Management has to find some innovative solutions during the recession like,

• To identify the real key employees and to intact them in the organization
• To identify the real top potentials and to strengthen their development program

The HR Management has to have priorities in mind and the strategic impact of the HRM Innovations in the recession time. The role of the HR Management is not to minimize the costs for the time being, but to make the organization stronger and ready for the future growth.

Recommendations while your employer facing negative challenges during recession:

1. Top management should know the contingency plan.

2. Do the brainstorming session with your top management and contribute in their strategic planning.

3. A complete or partial job freeze, however, communicate to the workforce that the company many continue to recruit key individuals even in difficult times

4. Review the employee performance evaluations to determine the key people that company cannot afford to lose.

5. Flow of Communicate should be from top to down that will help in making conducive atmosphere within the organization

6. Make prepare yourself for individual and group concerns therefore there should be a proper counseling session.

7. To maintain a calm atmosphere

8. Review all HR policies, processes and procedures to ensure that they are purposeful and contribute directly to the success of the company.

9. Suppose the company has to lay-off staffs ensure that there are no other opportunities for them in other functions or divisions of the organization.

10. Advise managers to deal the process of managing change.

Managing Human Resources (HR) in a difficult economic environment is even more demanding than working in times of rapid growth. Therefore the

task of HR is very important to maintain equilibrium throughout the hierarchy.

How to intact your employee during recession:

Here is how to keep your employees with you and away from your competitors during tough economic times.

· Differentiate Between Your Good and Average Employees

· Redirect Your Employees to Other Departments (Job Rotation)

· Listen to Your Employees

· Keep Them Motivated and Busy (Communicate-Communicate and Communicate)

· Show them the long term vision

The above steps will enable the employer to hold its team together during a recession, and will even make bond between all of you stronger. Employees should be motivated enough to stick to the employer during tough times and put in the extra effort required for the organization growth.

ROLE OF HR DURING RECESSION

• Downgrading/canceling holiday party (35 percent)
• Increasing benefits communication (32 percent)
• Eliminating/reducing seasonal workers (28 percent)
• Organization-wide restructuring (23 percent)
• Raising employee contribution to healthcare premiums (20 percent)
• Increasing pay communication (16 percent)
• Restructuring HR function (14 percent)
• Implementing a salary freeze (13 percent)
• Having a mandatory holiday shutdown (13 percent)
• Reducing/eliminating other employee programs (12 percent)

The percentage of employers that have already implemented salary freezes jumped from 4 percent in October to 13 percent in December. Sixty-one percent of employers reported that they reduced their planned merit increase for next year from 3.8 percent to 2.5 percent.

HR role in strategic people management

HR is still more focused on transactional activities and HR operating efficiencies than on high level strategic people issues.

However, the executives' concern about people is not translated into increasing importance for HR. In fact, the HR function, which executives believe is concerned with activities such as reward and benefits, performance evaluations and HR operating efficiencies is often seen as being unconnected with how a business will deal with key strategic HCM challenges such as talent management, workforce productivity and leadership development.

HRM Innovations in Recession

The recession is about the creative Human Resources Management. The HRM Function is asked to bring new ideas, to change the HRM Processes and to develop or change the procedures. And this effort has to be cheap or it has to cut the costs of the organization. The HRM Innovation is easy in times of the business growth, but the recession is not good for big innovative HRM Initiatives.

On the other hand, the top management understands the effort to innovate the HRM Processes better. The top management is in the search for the potential cost savings and they count every single penny brought by the line management. The HRM Costs are usually a very significant cost to the organization and the HRM Function has to be proactive.

The HRM Function has to focus on unpopular innovations during the recession as the role of Human Resources during the recession is to save money to the organization. The top management expects all the support functions to bring innovative solutions, which will have to make the organization stronger, when the next growth era comes.

The HRM Innovation during the recession has to focus on the following topics:

1. Reduce the number of employees in the organization

2. Strategic initiatives to increase the productivity and efficiency of the whole organization

3. Redesign of the compensation scheme

4. Cancellation of several benefit schemes

On the other hand the HRM Function has to find innovative solutions for the following topics:

1. Identifying the real key employees and to keep them in the organization

2. Identifying the real top potentials and to strengthen their development program

The second two topics have to be done with the minimum additional costs and it is a really hard task to accomplish. The HRM Function has to have priorities in mind and the strategic impact of the HRM Innovations in the recession time. The role of the HRM Function is not to cut the costs for the time being, but to make the organization stronger and ready for the future growth.

As a leader and strategic partner in your organization, you have the tools to assist your company in surviving and thriving through these difficult times. First you need to start thinking strategically…

 How can the organization make effective and economical changes that will help through these difficult times?

 What can I do to minimize our organization’s risk for fines, violations and/or unnecessary legal proceedings?

Following area should be looked upon:

• Ensure your organization’s policies and handbooks are up to date. Remember that an annual review of your employee handbook for compliance by an experienced professional is highly recommended. Also, each employee having a copy of the employee handbook is not enough. They have to be able to read and understand the content. Be sure that you provide employees a handbook in a language they can read and understand.

• Layoffs are never easy. Ensure you are familiar with your legal responsibilities in a lay off to minimize your organization's risk. Be sure that you have properly defined the criteria you are using to determine who will be let go.

• Alternative Workweek Schedules and Flexible Scheduling can maximize production and cut-back on overhead costs for organizations

• Cutting Pay may be an option to consider saving on today’s costs. Is this really an option for your organization? How are your pay scales as related to the market? Are you willing to risk losing key employees whose talents may be needed by other organizations, because you chose to reduce their pay at this time? Remember, you should not cut pay without a recovering strategy of how you will re-adjust when the economy has turned.

• Offer Professional Development as a reward or incentive to employees for performance and hitting goals. Professional Development courses are an economical way to reward employees with the gift of education and skills they will use throughout their lifetime.

• Downsizing does require internal document maintenance for your organization. As jobs are modified and responsibilities are increased changes also must be made to your job descriptions.

• Remember that the law is very specific on what positions can be considered Salaried – Exempt and what constitutes an Independent Contractor. Looking at adjusting your staff to fit into one of these two categories is NEVER the answer when trying to save money.

RECOMMENDATION

Recommendations while your employer facing negative challenges during recession:
1. Top management should know the contingency plan.
2. Do the brainstorming session with your top management and contribute in their strategic planning.
3. A complete or partial job freeze, however, communicate to the workforce that the company many continue to recruit key individuals even in difficult times
4. Review the employee performance evaluations to determine the key people that company cannot afford to lose.
5. Flow of Communicate should be from top to down that will help in making conducive atmosphere within the organization
6. Make prepare yourself for individual and group concerns therefore there should be a proper counseling session.
7. To maintain a calm atmosphere
8. Review all HR policies, processes and procedures to ensure that they are purposeful and contribute directly to the success of the company.
9. Suppose the company has to lay-off staffs ensure that there are no other opportunities for them in other functions or divisions of the organization.
10. Advise managers to deal the process of managing change.

Managing Human Resources (HR) in a difficult economic environment is even more demanding than working in times of rapid growth. Therefore the task of HR is very important to maintain equilibrium throughout the hierarchy.