Managing HR in a Recession


Like a Disc jockey struggling to play his music at the right pitch crescendo with bad speakers, managing people issues during economic downturns could be nightmarish. However loud the music may sound, people will be left standing still on their feet or glued to their chairs. It will require some bit of ingenuity from the DJ to getting people return to the dance floor. This form of ingenuity is what is required of HR professionals during challenging economic times.

The main role of HR to achieving competitive advantage for organisations through effective people management strategies is threatened during recession. Productivity being a major macroeconomic indicator is at an all time low resulting into many businesses folding up and job losses as immediate consequences. For companies that are able to stay afloat, they struggle to keep their employees engaged. The brunt of waning purchasing power due to inflation and the attendant depletion of savings of the working class is transferred to the workplace.

Some of the HR challenges associated with recession include performance issues, agitations for pay raise, pressures from organised labour, tax and other compliance matters. When the well-being of people is threatened as it is often the case during recession, it negatively affects all activities of human existence including their work. This often puts pressure on HR as agitations for pay raise will be on the increase in the face of dwindling sales and revenue. Governments policies in reaction to unpleasant economic climate could involve raising taxes and clamping down on companies defaulting on tax and other statutory remittances.

Rather than adopting knee-jerk approaches to deal with the situation, companies should build a resilient workplace. While I admit I do not have the answers but companies that espouse shared vision and purpose are able to weather the storm during difficult times. No any other department does this better than the HR. While most leaders have ideas of the type of future they envision for the business, only few are able to communicate this in clear terms to the workforce. These few are also bad at listening to the aspirations of the people they lead. The result is a future of a company being built on a foundation which is not in sync with what really matters to employees.

How well companies weather turbulent times will also depend on their adaptability. Building institutions on tenets and values that are long lasting. Enshrining strong corporate governance and ethical values can help during unfavourable climes. As aptly put by the CIPDorganisations will need to redefine success, to question values which underpin their actions and to accept new frameworks” in order to be enduring. This is the hallmark of organisation design and development which is HR’s call.This will surely test our competence and values.

We need to stand up and be counted amongst those who could institutionalize sustainable culture change by leading our companies through recession. Remember the popular saying “tough times don’t last only tougher men do”.

Bashir Mudi Baba can be engaged on Twitter @El_De_Bash. Photo courtesy: