‘There is a risk for HR that the role to be played
in a recession is that of "executioner's assistant"’ (Griffin
and Smith 2010). This is usually due to cost-cutting measures that are often a
characteristic of such periods and which are employed in an effort to keep
organizations afloat in such periods of uncertainty. It has become common for
firms, high profile or otherwise, to announce job cuts in response to fears of
any imminent recession. According to Allen (2012), this year Britons are facing
their worst employment prospects since the recession due to the growing number
of job cuts and redundancies planned in the Public Sector and by Private Sector
employers respectively. Statistics show that while - at 8.2 per cent in the
three months to March 2012 - the unemployment rate was down 0.2 percentage points
from the three months to December 2011, it
is still up 0.5 from a year earlier. And according to Peacock (2008), even
where HR professionals are not being told to make cuts, they increasingly have
to deal with reduced resources.
Redundancy is just one of the measures, albeit the
most prominent, which is employed during recession. It is no wonder then that
it is increasingly becoming a challenge to maintain employee morale and
engagement as well as satisfactory organizational performance in these
recessionary times.
It should now be a priority for HR in this era of
Strategic positioning to not only manage resources efficiently but also seek to
research, develop and recommend systems and practices that can be employed to help
organizations maintain optimum organizational performance not only through the
recession but most importantly in post recession recovery. This is because the
personnel loss caused by both voluntary resignations and redundancies during
the recession will always result in reduced resources as well as reduced capability
and productivity which can greatly affect an organization’s profit margin and
ability to maintain operations to satisfactory standards. As Grossman (2011)
recommends, it is indeed wise for organizations to ‘take stock of your [their]
HR strategies to make sure they address post-recession challenges’. As
previously mentioned, the current economic climate has spawned the prevalence
of downsizing and restructuring their workforces if many firms are to create a
lower cost base and remain competitive. However, this poses a multitude of
challenges to the HR professional, who must continue to maintain the support of
employees and, more critically, make sure that the organization is primed for
innovation. After all, the development of new products and services is one of
the keys to recovery.
Some measures than can be applied in place of or in addition to a
necessary redundancy include:
1. Cross
train employees: HR should seek to ensure that as much as possible employees
are multi-disciplinary. NO, not ‘Jack-of-all-trades’, but employees should have
one primary area of expertise and 2 or 3 areas of good knowledge. While the
areas of good knowledge may not be part of their daily workload, in the event
of a reduction in workforce they can then take on these areas as much as they
are able to. This will ensure that the organization can continue operations
with minimal disruptions and will reduce the feeling of large gaps left or
shortfalls in staff.
2. Flexible
working: This in the sense of industrial organizations. Where a company is
seeking to reduce work in a warehouse for example, rather than going through
redundancies, they can reduce the hours of work available thereby keeping all
employees on board and as soon as the company is out of danger and in post recession
recovery, as the work increases, hours on offer can increase. In the case of corporate
organizations, HR can seek to make certain positions part-time or reduced hours
rather than compulsorily redundant and offer the employee the necessary support
while adjusting to the new working hours. And then in post-recession again as
work picks up, full time status can be restored or hours increased. These can
be applied across industries and should always be done after due consultation
with employees.
3. Redistribute
workload: If a member of staff seems to have quite a large workload and work
overtime, this can be reduced and distributed to other colleagues who at that
point may have fairly light workloads and are willing to take it on. This way
people who may have seemed to have light workload and thus at risk of
redundancy will help cut cost of overtime and increase productivity in the
organization. This will also reduce the probability of employees developing work-related
stress or feeling burnt out because of increase in or heavy workload.
4. Balancing
out Compensation: If in the habit of giving bonuses to highly performing
employees, don’t stop because an attempt at cost-saving. Instead, the criteria
could be slightly adjusted to be a bit stricter. Also alternative and cost
saving rewards could be introduced in place of cash rewards to ensure that good
performance is still recognized, when productivity and profit increases the cash
rewards if the organization so- wishes can be re-instated. Also, more
importantly, HR must ensure that they steer organizations right so that they do
not overcompensate salary and bonus wise and then have to leave the employee
stagnant in recessionary times. They should ensure that any compensation is
fair but not excessive. HR must ensure that the organization is not being – as
the saying goes – ‘Penny wise, Pound foolish’. This is because more important
than attracting the right personnel is retaining them. There is no point hiring
a person on an outrageous salary and being unable to sustain it.
These are just a few measures that can be employed. Many more can be
developed but only if HR as Strategic Partners begin to take their role more
seriously and focus on not just the immediate problem but actually plan for any
contingency that may arise. HR need to understand that their role as a
strategic partner to the business surpasses administrative or advisory tasks
but more importantly includes the role of a ‘Forecaster’ who based on trends
and observations is able to almost accurately predict what may be about to
happen and in addition proffers suggestions on how to prepare so that the
organization is able to survive as best as possible any challenge that arises
whether now or in the future.
Bibliography
Allen, K.
(13 February 2012). Unemployment likely to worsen as private sector resorts to
redundancies. The Guardian [online].
Available from: http://www.guardian.co.uk/business/2012/feb/13/unemployment-private-sector-redundancies [Accessed 1 May 2012].
Griffin,
E. and Smith, G. (2010).
Recession: a shot in the arm for HR. Strategic HR Review,
9.1,pp. 17-22.
9.1,pp. 17-22.
HR Focus. (2011). Turnover, Globalization
Among Emerging Challenges Facing HR. 88.9, pp. 10-11.
Office
for National Statistics. (2012). Labour
Market Statistics, May 2012. Available from: http://www.ons.gov.uk/ons/dcp171778_264236.pdf [Accessed 15 May 2012].
Peacock,
L. (2008). HR in front line as recession fears force firms into corner. Personnel Today, 15, p. 1.
Prabhu,
J. (2010). The importance of building a culture of innovation in a recession. Strategic HR Review, 9.2, pp. 5-11.
PricewaterhouseCoopers
LLP (2011). PwC Saratoga’s 2011/2012 U.S.
Human Capital Effectiveness report. Delaware: PricewaterhouseCoopers
Robbins,
S. P. and Judge, T. A. (2007). Organisational Behaviour. 10th ed.
New Jersey: Pearson Education Incorporated.
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