HR has never been associated with decision-making, operations, or business data. It has always had this bumper sticker of being too "soft"; more of a shoulder to cry on than a hand that walks you through troubles.
As blunt as it may sound, that's exactly the perception of HR in other more strategic and business-critical parts of the organisation.
HR has been fighting a consistent battle in justifying its position in organizations. In good times, when budgets are adequate, organizations are more than willing to spend on hiring, training, incentives, employee engagement systems etc. Although when the finances are down, HR is the first to get a hard blow. In such troubled times, doing what HR does best—managing people—is an intimidating task. However, it is these tough times where HR can prove its mettle and showcase its worth as an equally powerful part of the organisation.
It's show time, folks...
Imagine a scenario where you are the HR person in the middle of a crisis and suddenly you become the most wanted department in the organization with all eyes on you. What do you do?
For all those question marks and speculations on how to go about dealing with a crisis situation, further up are a few measures that an HR manager needs to undertake to beat economic downturns and ensure the firm's survival.
Figure It Out
Figure out what your core attributes are. What is it that your business thrives on? What makes your business what it is at present? When things go haywire, there is an inevitable tendency to forget the basics, to do things that are most important to your business.
Concession bargaining prioritises employment over wage rates. It is a kind of union 'give back' to the business, which arises from the need for maintaining jobs. Unions adopt the strategy of saving jobs and preventing layoffs by agreeing to wage freezes and decreased benefits. An example of such a concession bargaining took place in 1979 when Chrysler Corp. went into bankruptcy. Chrysler and the UAW eventually came to an agreement that $200 million dollars were to be given in concessions and givebacks to sustain the company’s future.
Adjusting employment does not necessarily mean firing your employees. Employment adjustment can be done by bringing in policies of flexible working hours, work from home, fewer working days, temporary layoffs, bringing outsourced productions in-house, redeployment and sabbaticals. It would also be advised to discourage overtime and encourage short working hours.
This denotes increasing the number of part-time employees as opposed to full-time employees. It would also be of help to bring on-board interns who are willing to work for free (do check local laws first) or at a lower pay. This would work well with the company's environment, which is vulnerable to the constant change in employment and demand for products and services.
When in a crisis, it's better to be upfront about it and just say it out, "We are in the middle of a crisis and our backs are on fire. Brace yourself". Being straightforward in your approach will give the employees an idea of what to expect. This would prove indispensable in garnering employee engagement and commitment. Involving employees in the management's decisions will be indicative of the management's authenticity in trying to develop policies that are in the best interests of the employees. A report of the proceedings and current standings should be sent out to the employees to keep them informed and also shift their focus towards things that need greater attention.
In troubled times, firms should maintain the activities which are formulated to improve the organization's products and processes. Bad economic times should not hinder efforts undertaken towards restructuring and remodelling the HR system within the organization.
During a crisis, it becomes of utmost importance to increase productivity without increasing costs. The best way of doing this would be to have a well-engaged workforce. This is where employee engagement and training programs come in handy. Increase the number of training programs, carry out timely and stringent performance appraisals, and look into the overall development of the employees.
Generate Assessment Reports
The HR department should conduct an assessment of all employees. It should differentiate between people who are willing and efficient against people who are unwilling and inefficient. An assessment of the workforce carried out on an individual basis would be of great help to categorise employees and map out a solution. Such an assessment will give the organization a clear idea of those who could be potential liabilities and those who should be retained.
Carry Out Layoffs
Presumably, this should be the last thing that any organization in a crisis situation should resort to. It should be given consideration only when all other constructive methods fail. Because let's accept it, firing someone is the most dehumanising thing to do (usually). It scars a person's self- esteem and is a big life-changer. Make sure that the employees who are being fired have been given adequate chances to prove their value towards the organisation. In cases where layoffs are inevitable, let the people be laid off by the concerned authorities and not by an indifferent outplacement rep. HR should ensure that this duty not be delegated and be the one conversation that is personal.
If you have ultimately chosen to lay off people, make sure to do it the right way. Be fair and give every departing employee an equal deal. Nothing is more disheartening than seeing a fellow colleague get a better deal than you. HR needs to be just in its dealings and offerings. There is no room for playing favourites or being partial. You don't want to be labelled as hypocrites.
Lastly, be empathetic. Treat your departing employees with the same respect and attentiveness as you did when getting them on-board. HR needs to prove its worth by demonstrating a caring and empathetic nature towards departing employees, in short being a sponge. Absorbing pain and giving condolence. It is what defines HR.
Conventionally, HR has taken a very laidback attitude towards critical business strategies. However now is the time when HR finally needs to get on track and say, "this is what we think and these are the policies and strategies that we think should be implemented".
These troubled times are apt for HR to undergo a transformation in the way it's been functioning over the years and change the 'just a department for hiring, payroll and picnics' perception of HR in other more business-driven parts of the organisation. Since managing people is HR's forte, in times of crisis, the role of HR can be indispensable in helping leaders and CEOs step up and lead the organisations out of the potholes.
It's time HR goes over and beyond its traditional limits and develops into a strategic business partner that can contribute to the business as much as it does to its people.