I am glad that President-elect Obama has his priorities set on economic reforms. After all, this is one of the most important reasons for those who casted their votes in his favor. More so, the effect of the US recession has spread the globe and unless a radical rescue or jumpstart of the ailing economy is made sooner, we will be experiencing a worldwide economic meltdown worst than a tsunami aftermath.Many business organizations, however the size, are getting the hardest hit. No wonder, the efforts are zeroed in on cutting costs in all areas of business operations to avoid closing shop. Unfortunately, the first on the list has always been streamlining human resource. I cannot blame CEOs and business owners if they still see that in a recession, in order to survive, you have to eliminate your extra baggage and that would mean laying-off a number of your employees. It is not that it is a wrong decision to make; however, this action adds more strain to the already faltering economy by further adding to the bloated unemployment rate. So, how does HRM (Human Resource Management and Managers) help the organization cope in a recession? What is the role of HRM in crucial times like these?
In my mind, here are the important roles and responsibilities that HRM should focus on during a recession:
Looking closely into the details of each business processes through an organizational assessment or audit will reveal that there are other areas where cost cutting measures can be made. The HRM should be the forefront in this activity being independent from operations. Besides, it has the competency to do such an audit.
It’s amazing that in some business process audits I conducted independently and in a team, reduction of personnel is at the bottom list of the recommendations. Improvement in processes, reduction of waste, recycling of materials, and quality monitoring rank almost always on the top recommendations.
Conduct Organizational Assessment or Audit
Accountants would readily point that labor is where cuts should immediately be made. As I pointed out earlier, this means streamlining the organization by laying-off employees. Usually, the non-permanent jobs or positions are the first to go. On an organizational competitiveness perspective, reduction of personnel is not necessarily the best or first option in cutting costs.Looking closely into the details of each business processes through an organizational assessment or audit will reveal that there are other areas where cost cutting measures can be made. The HRM should be the forefront in this activity being independent from operations. Besides, it has the competency to do such an audit.
It’s amazing that in some business process audits I conducted independently and in a team, reduction of personnel is at the bottom list of the recommendations. Improvement in processes, reduction of waste, recycling of materials, and quality monitoring rank almost always on the top recommendations.
Information Dissemination
Keeping employees informed on a timely basis is probably the most important role that HRM can play. Employees need to know where the business is going and what the intentions of top management are. In a recession what is more at stake are the investments made and employees come second. However, when job security is threatened due to a financial crisis, employees deserve to be informed about the status of the business and their employment’s fate. With many already unemployed (some are regretfully unemployable), and the job opportunities narrowing or disappearing, employees must be informed ahead and warned of the possibilities of losing their jobs so that they can prepare emotionally and financially. Keeping communication channels open put the HRM at a very crucial role of bridging the gap that may widen when the inevitable retrenchment of employees have been decided, and which may tend to put management in a bad light, especially in unionized companies.Providing or Coordinating Livelihood Skills Training
Employees need to look beyond the comforts of their salaries and job securities. They also need to develop other skills that will help then earned a decent living other than their current employment. The HRM should have integrated in its yearly training curricula training on livelihood skill development. With these new skills, employees are better prepared to cope in cases of unemployment and may consider home or small businesses as income alternatives; besides, many small home businesses do not require huge investments.Counseling and Guidance
A financial crisis that is global in nature has a psychological effect on the average employee. Especially when the news of bigger and more established companies are laying-off employees and/or are closing shop, they are likely wary also of their own job security. HRM should provide guidance on how employees can cope in case of the inevitable happen. It should help affected employees to find possible alternatives in cases of mass lay-offs.WHAT'S NEXT? Get your updates by emailor via RSS.Follow us on Twitteror like us on Facebook. Visit ourFREE Business Resourcespage.
About the Author
Nor Franco is the Managing Director and Virtual CEO of nextManager.net. He's a former corporate executive whose passion is bringing out the full potential of HR in Businesses. This time that passion is pursued through Virtual Management. He writes and blogs about his management views and insights here. Follow him on Twitter.
