How HR can use lessons from the last recession to get ahead of a coronavirus-led economic downturn
No business within the private sector will be completely immune to the economic distress that will follow the current coronavirus pandemic.
There will be pressure on budgets, and job security can't be taken for granted. And across the board, there will be a focus on efficiency and on cutting your cloth to suit the new economic circumstances.
We have already seen this during the global economic meltdown in 2008. This time around, the issues could be far worse because of the uncertainty it has brought, especially in human resources. COVID-19 directly impacts humans, first from a health perspective and later from an economic standpoint.
So what has the last recession taught us? First, it's never just a question of job losses and savings. The issue is always more complicated than that. Because along with restructuring in companies, there will be mergers, divestments, acquisitions, and business transfers. All of this implies change and pay structure harmonisation.
In that environment, HR really needs to help deliver commitment. Additional discretionary input by employees will make all the difference between companies achieving their objectives and becoming competitive in a difficult economic climate.
Business leaders will be paying attention to preserving credit lines, building cash, cutting costs, and working on the P&L. It's easy to lose sight in the midst of all this to what happens to post the recession.
After the crisis, we are going to find that there are enough talented people to perform the tasks that we need to engage in order for our companies to thrive. And at that point, CEOs might turn to HR and ask ‘why weren't you doing something about it?’ You can't say because you told me to cut costs.
Frontline managers are often the hidden casualty as they end up with greater responsibilities but fewer resources when companies cut costs to stay afloat. It is HR's job to alert leaders that they have to strike a balance between reducing headcount and maintaining productivity in the long run. Data on productivity, compensation, training, and other parameters related to financial results can help a company gauge the impact of downsizing even before the actual process.
One thing that all recessions have taught us is that roles will be greatly altered, especially at a time when most companies invest in technology and automation. HR leaders are also expected to orchestrate employees in developing new technical capabilities that can prepare them before a recession.
Such a situation has never been easy, but it's going to be more difficult than ever now.
In fact, headhunting companies could even look at people who had the experience of the last recession because they would know about dealing with large-scale restructuring. Also, it important to be up to speed on what you can and can't do when you are restructuring an organisation from a legal and compliance perspective.
During such stressful times, the whole company has to rally around employees and care about them as human beings. Checking on their well being is important even when money is tight. In the end, one has to start achieving that additional commitment from employees, and HR - with those kinds of skills, abilities, and track records - will be like gold dust over the next few years.
(Edited by Teja Lele Desai)
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)