Downturn a time of opportunity for HR

The past year has been tough for many HR departments as a slumping economy has brought increased pressure to control costs. Inevitably this led many organizations to trim head count or at least freeze hiring but fiscal restraint does not mean good HR management practices should be thrown out the window. Here are some readings on how HR was affected, and should respond to tough economic times.

Recruiting the next generation

This article is from the Wharton HR Executive Forum Report and is titled “Managing in tough times: Perspectives on leadership and change.” This PDF is eight pages and is excellent at going past some of the more superficial presentations. Included in the article, for example, is advice on how to convince first-time employees to view their job as more than a stepping stone to better things.

Keep the pipeline filled

In this article (PDF) professional recruiter Scott Hagen asserts “in this time of turmoil and economic uncertainty, human resources/staffing departments need to focus on three main areas: strategic staffing, future staffing and employee retention.” This short two-page presentation reinforces the idea that this is an ideal time to be proactive. Keep the pipeline full, he says. Even if your organization is in a hiring freeze, maintain relationships with top talent so it will be easier to fill positions later.

Bringing consultants in-house

Power dynamics shifted wildly in some cases during the downturn. This article explains how high-priced third-party consultants felt the brunt of the economic slowdown. “We’re able to exert more pressure for a better deal, to get a reduced hourly rate or additional services for the same amount of money,” explains one HR vice-president. Rather than rely on outside consultants another business leader says they were able to build up their in-house consultant pool with people looking for work.

Here’s your chance for growth

When times get tough it is time to take more risks, not less. Now is the time for companies to make sure they are keeping and hiring the best talent, says Clinton Wilder, editor of business technology magazine Optimize. “Some might view 2001’s biggest corporate story, Enron’s nosedive, as a powerful warning against risk-taking. The failure of Enron was about accounting fraud, not about taking sound business risks. The former should never be accepted, the latter becomes a springboard to success when the tide turns.

Coping with the last resort

While this column is looking at recruitment during a downturn, many organizations had no choice but to implement large-scale layoffs. This article looks at the issues of mass-terminations. While it is American and considers U.S. laws, the article still presents HR managers with some useful guidelines when it comes to sweeping staff reductions. For example, the first thing HR should do when a large layoff is announced, is to ensure layoffs don’t appear to discriminate against any one group.

Don’t cut too deep

When times are tough, an early reaction is to cut costs, with payroll being an easy target. This article reminds readers that a rebound is inevitable and asks whether their company will be ready. Trimming a little is rarely a bad strategy in good times or bad, but the reckless slashing of head count is an ill-conceived idea that presents future risks.

Time to refocus,1324,62211,00.html

This article is for those who are expected to show leadership in guiding employees through tough times. Training and retention are considered and the author is also of the opinion that downturns offer opportunity for HR. “Many are of the view that economic downturns are times of gloom, despair and despondency. Not so. The quiet time is the ideal opportunity to focus on your team members, build rapport, skills, de-stress and refocus on core business objectives.”

Avoid new grads

John Sullivan of San Francisco State University writes that “ the best college hires graduated two years ago.” Sullivan says there are too many downsides to hiring new grads. “Let some other ‘fool’ train them first, and then hire them away,” he writes. This presentation gives compelling logic for spending higher dollars on staff with experience. My question is if everyone took this road, how would the new grads ever get two years’ of experience?

Joe Nunes is an actuary and president of Actuarial Solutions Inc. in Oakville, Ont. He can be reached at (905) 257-2038 or [email protected]

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