Where should HR be focused during an economic downturn?
I recently entered into a similar debate in an HR forum on LinkedIn... I got a little carried away with the topic so thought i'd open it up to the community...
I see there being something of a perfect storm brewing in the UK at the moment. On the one hand you have the downturn in the economy, businesses are experiencing decreasing revenues, shrinking budgets and increasing uncertainty...and on the other, you have fundamental changes in workforce demographics. We all know about what's going on with the baby boomer generation, workers are less loyal than they used to be - the war for talent has never been so aggressive.
The knee jerk reaction for most businesses in a downturn is to look at cost cutting, businesses cannot afford to focus on talent! Right? Actually, i wholeheartedly disagree. This is exactly the time when new market leaders emerge - HR needs to be empowered to go on the offensive to ensure their workforce engine for strategy execution is focused on the right things. Everyone shares in the same pain so why not invest to make relative gains against your competition and avoid knee-jerk or ineffective responses to external pressures that destroy value?
There's been a recent research study that examined the responses of industry market leaders in adverse economic conditions. We've seen a distinct pattern within their forward thinking HR departments and the resultant white paper highlights 4 distinct strategies that are being employed to drive results in a downturn economy, they are:
1. Establish clarity of goals and rapidly align your workforce to execute the new strategy — When change is forced upon your business by the external environment, you cannot afford to lose focus or to delay the necessary course shift.
2. Cut with precision, if you must, but don't do it bluntly — If layoffs become necessary, view them as your chance to weed out the low performers and let your best talent grow - thus, optimising your workforce.
3. Focus on your core talent and invest where it counts — Identify the talent that will be essential for your new strategic direction and invest heavily when others are cutting. Turmoil is when leaders emerge.
4. Be transparent — Avoid the rumor mills. During uncertain times, transparency drives trust and employee engagement. Companies with high trust financially outperform those with low trust.
For all you Social folk, i've attached the whitepaper for your interest... my thanks to Erik & Alex @ SF
How is 'the crunch' effecting you?
I see there being something of a perfect storm brewing in the UK at the moment. On the one hand you have the downturn in the economy, businesses are experiencing decreasing revenues, shrinking budgets and increasing uncertainty...and on the other, you have fundamental changes in workforce demographics. We all know about what's going on with the baby boomer generation, workers are less loyal than they used to be - the war for talent has never been so aggressive.
The knee jerk reaction for most businesses in a downturn is to look at cost cutting, businesses cannot afford to focus on talent! Right? Actually, i wholeheartedly disagree. This is exactly the time when new market leaders emerge - HR needs to be empowered to go on the offensive to ensure their workforce engine for strategy execution is focused on the right things. Everyone shares in the same pain so why not invest to make relative gains against your competition and avoid knee-jerk or ineffective responses to external pressures that destroy value?
There's been a recent research study that examined the responses of industry market leaders in adverse economic conditions. We've seen a distinct pattern within their forward thinking HR departments and the resultant white paper highlights 4 distinct strategies that are being employed to drive results in a downturn economy, they are:
1. Establish clarity of goals and rapidly align your workforce to execute the new strategy — When change is forced upon your business by the external environment, you cannot afford to lose focus or to delay the necessary course shift.
2. Cut with precision, if you must, but don't do it bluntly — If layoffs become necessary, view them as your chance to weed out the low performers and let your best talent grow - thus, optimising your workforce.
3. Focus on your core talent and invest where it counts — Identify the talent that will be essential for your new strategic direction and invest heavily when others are cutting. Turmoil is when leaders emerge.
4. Be transparent — Avoid the rumor mills. During uncertain times, transparency drives trust and employee engagement. Companies with high trust financially outperform those with low trust.
For all you Social folk, i've attached the whitepaper for your interest... my thanks to Erik & Alex @ SF
How is 'the crunch' effecting you?
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Permalink Reply by Jo on -
Hi James,
Before we do any of this, we have to take a step back and create flourishing mindsets. This will be an ongoing task as the flood of negative yet wooly info on the media worries everyone.
My list is this.
1. Establish a budget for R&R for the HR team and insist upon. Just as the first task of a doctor or nurse is to be healthy and free of infectious/contagious illnesses, the HR team must sincerely believe in the possibility of a positive future and the future of the team together. They will have to dig deep for patience and good will quite often So set up some bulwarks and also a way to debrief people who are dealing with upset.
2. Managers who are upset will make bad decisions and will not spot opportunity. I include union officials and informal leaders. Set up a rosta spending time with each and monitoring their moods. Someone in a bad mood must go into quarantine (take the day off) and come back when they can see the future and the organization positively.
3. Then work with the entire organization and ask each and every person to consider their life goals and how the organization helps them to succeed, even if it is in a very small way. Collect these small ways and keep people focused on the reason why they are together.
You can be relatively sure that everything else will fall into place but if you lose the sense of community, nothing else will work. A private Ning platform would help as well. Simple pictures of what people aim to be and the skills they are learning now. Pictures of future retirement and savings plans. All these visual characterizations of people's dreams in one place keep a human picture. Then pictures of the work will come in to. Here is this client and this is how we helped them.
Hope this helps,
Jo
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Permalink Reply by James Hendy on -
Some fascinating insights Jo, I particularly like your idea of allowing upset Managers to take a day off! Come to mention it I am starting to feel quite emotional...
Have just come back from London Business Forum Event on a very similar theme - 'People People People' presented by Adrian Webster, author of 'Polar Bear Pirates' - will be reading my free copy with interest over the coming weeks as was a really thought provoking session... (check out http://www.polarbearpirates.com/)
The subject of helping managers to get the best out of their employees has never been more important than in the environment we find ourselves today - take a look at this:
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