Ways to Effectively Control Recession Effects on HR Performance

Financial crises and downturns are forcing businesses and companies to strive to control recession effects on HR performance by going back to the basics and focusing on their people.

Financial crises, recessions, and economic depressions are not new phenomena, but their occurrence is definitely a cause for great concern among many. This is because no matter how well we study the history of downturns such as these, dealing with them when they do happen again is still just as difficult. Most organizations will wonder, for instance, how to control recession effects on HR performance, and employee performance in general. For the most part, this would fall to the efforts of the human resource department. In fact, the HR department would probably need to handle the most important part of the recession coping strategies.

This is because, essentially, what crises force organizations to do is to go back to the basics and try to maintain an intact, dynamic core. This core consists mainly of the organization’s leaders and employees – all united towards accomplishing their mission and achieving their vision. The panic and worrying induced by uncertain, or worse, poor economic conditions will tend to obscure this simple fact, but human resource departments should strive to realize this, better sooner than later. The sooner HR is convinced of its central role in surviving the crisis, the sooner planning and implementation could start as well.

Drops in sales and profits will inevitably lead management to consider laying off employees, especially the poor performers. While this may be necessary in a lot of cases, it should also be realized that this often has unintended consequences. This is manifested in the loss of productivity caused by layoffs, however small, as other employees suddenly feel less secure in their own jobs. Another effect may be lowered morale, since those who were laid off were friends and close colleagues of those who remain in the organization. The best thing to do to try and lessen these side effects would be to maintain open channels of communication among the management, human resources, and the employees. They should be able to ask questions and get straight, honest answers. This will, in the long run, lead to a better understanding amongst the different parts of the organization, which is crucial for long-term survival.

HR should also do the best they can with the employees and resources available, in terms of training programs. While recessions are usually seen as periods where organizations should do all they can to just stay afloat, it would not do to neglect the future for the present. That is, training budgets are often cut mercilessly during tougher times, with the rationale that they give no immediate payoff. However, companies that follow this policy too closely may find themselves unprepared to cope with the changed situation once the crisis has passed. Strategies should be made looking at the long term, and not just the short term, no matter how tragic the short term may seem to be.

HR departments truly do have their jobs cut out for them in times of crisis, but with a smart and sensible plan, managers can effectively control recession effects on HR performance.

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