HR in a recession: A change of focus

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5th May 2009
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John Pope examines how HR professionals' roles have changed since the downturn and how they must now adapt to the current climate.

Business is a bit like gardening. To get good roses in summer, you have to prune in winter, root out diseased old stock, get rid of those which flower poorly or are no longer vigorous, and get rid of those you are keeping for sentimental reasons. You also have to be able to see what looks right and what looks wrong. And the same with business.

"There will eventually be a summer, and HR's job is to help your business overcome the winter."

We now have an economic winter, and it looks like a long and hard one, but there will eventually be a summer and HR's job is to help your business overcome the winter and be in a good state for the recovery.

Recessions follow good times, during which time much that should have been done but was put off now has to be done. While the basic role of HR may not have changed, the priorities may be very different.

Clearing the 'rosebed'

You should already know who do not 'flower' well. They are those who don't contribute enough in relation to their cost; those whose performance needs regular stimulation; the one who has been passed from one manager to another in the hope that the new one might revitalise him.

There are those who choke the growth of others, get in the way or obstruct progress. You have, I hope, given them enough warning of the need to change, and refused to allow their managers to overrate them, or fail to take action over serious lapses.

Tough times are testing times

Tough times test and show up those who underperform. Those who do not perform well may be untrained or may never have had the basic aptitude for their work, or may need better, closer supervision. You cannot allow that to continue at any level in the organisation. HR has to advise and support management on the changes that are needed. Problems resolved at senior level can have greater effect on the performance of the whole workforce, provided that the reasons are clearly explained and not glossed over.

You can't afford them anymore. Identify those who can't or won't pull their weight after they have had a chance to respond to the managing director's stirring speech about the 'new world'.

You should know where the problems are

In your regular visits to the workplace, and your contact with managers, you will already know where the performance is poor and be able to advise on what is needed to strengthen the management. While HR departments may not be technical specialists, you will have seen and will have had to deal with the results of poor management; you know who the good managers are and who are the poor managers. You should know what could be done and advise top management accordingly.

Re-educate the management team

The management team may have a general idea of legislation regarding redundancies; it may be out-of-date. You may have to bring the team up-to-date on what can and cannot be done regarding closure, transfers and redundancy so that they are well prepared when discussing employment issues. You need to be there while the issues are being discussed, the decisions made and above all when the plans are being made. You are there to look after the 'human capital'.

"Problems resolved at senior level can have greater effect on the performance of the whole workforce."

Identify the potential

Some people will thrive in these testing times. You should be able to identify, and make sure of retaining, those who:

  • Are already high performers who could take the business forward – they will be needed when spring comes
     
  • Have potential and had shown it during the changes which had to be made – they will have been 'flame-hardened' and be needed in future

High potential people may need protection, especially if whole departments or functions are being closed. It is too easy to lose good people accidentally.

Reorganisation

When times are tough many organisations take refuge in reorganising. Sometimes this is right, sometimes tough, and as seems to be in government, the reorganisation is to show that something is being done. HR can and must advise management on the need for - and likely effects of - reorganisation as a whole and not just the usual, though important, aspects of job-grading, redundancies and so on.

Keep the management team well aware

The management team will have much on their mind, survival of the organisation being one of the major concerns. They may not consider the feelings and concerns of the workforce as a high priority. HR can and should help by keeping in closer touch with staff at all levels and be able to brief top management on current concerns and impending issues. And that 'keeping in closer touch' is much more than running attitude and engagement surveys. It requires face-to-face contact.

Ensure good communications

Rumours spread quickly when the staff are worried about their future. You can help by making sure that the management keep the staff very well informed. Your questions are:

  • What can we tell the staff? How will we explain the issues and the plans? Who will do it, when, how shall we do it, how will we follow up the announcements, and where?
     
  • How will we get and use the staff's ideas and views of what could or should be done?
     
  • How will we discover the real feelings and concerns of the staff and make these clear to top management?
     

My own view is that this is only possible by face-to-face informal meetings, in very small groups. If there are to be 'secrets' – how shall we keep them secret and how shall we make sure that senior managers don't blab?

"HR can and should help by keeping in closer touch with staff at all levels."

HR can help management understand the likely responses of the staff and identify opportunities to resolve long-standing issues at the same time.

Help senior management communicate

Senior managers may need help, they will need rehearsals where their remarks and delivery can be improved. They will need to be able to answer the difficult questions. They may need help also when they have to face an 'edgy' workforce. Not many managers seem to be able to keep their mouths shut over the delicate issues when dealing with the media.

Prepare for spring

Well, for the upturn at least. There will be key staff you must retain, there will be people who are key to your succession plans, there will be others identified as being of high potential, some of whom will have shown it in hard times. You will need to advise management who they are and how they might be persuaded to remain. But preparing for spring is much more than that, it requires having the organisation and workforce to be well prepared, healthy and in good shape. HR can help management achieve that.

See also: Vox pop: HR's role during a recession.

 

John Pope has been a management consultant for 40 years and has worked to improve the development and performance of managers and management teams at all levels for most of his career. He can be contacted at [email protected]
 

Replies (5)

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By Yuvarajah
06th May 2009 09:22

I certainly wouldn't want to liken the HR business as customised gardening according to the 4 seasons.

I feel saddened over how the human capital is misperceived, unappreciated, mistreated and undermined. Isn't it an irony that you hear of a large scale witch hunt for "underperformers", whenever you face an economic crisis.

Does it mean you only start removing problematic people during a bad spell, after condoning them all along. Does this not sound lacking in integrity, competence and common sense on the part of management.

Can I naively ask, "How does an employee become an under-performer, without contribution from the work situation, including the phenomena of "Peter principle". I recall what Sir William Slim once said, "There are no bad soldiers, only bad officers".

I feel it is time for HR professionals the world over to wage a crusade in redressing the abuse of HR. HR is not given its due place and position in the business process and accountabilities.

Instead of looking for quick fix solutions in trimming costs by slashing headcounts and seeking redundancies, why not start questioning on what the world of business need today - beyond survival - called Good Corporate Governance (GCG). Instead of just looking at the feet, what if HR could stretch their role and responsibility to replace unhealthy practices that could have long term and far reaching impact - turnaround in creating a disciplined environment and engaged workplace that is self- correcting and accountable for values driven leadership and business ethics.

How about if HR start with the Board - their role, responsibilities, performance and rewards. How many HR really know what these people are suppose to perform and be accountable for. Do they get paid to sit at quarterly meetings, flip through reports and listen to the CEO spread the good news.

I am not so sure about UK, but in Malaysia we have come out with a code of conduct for Boards on GCG. There is even mention on ensuring Succession Planning!) Of course, as usual, the biggest challenge lies on the "political will" or enforcement. How I wished the job was given to HR. Just imagine the leverage HR would gain in authority and credibility having to provide unbiased reporting on the performance of Boards!.

Whether good times or not, I feel HR should do its job function professionally in articulating the priorities of HR within the context of GCG.

Priorities should be based on the order of strategic importance, not situational convenience and should never be at the expense of values. You don't cry for financial aid and then help yourself to bonusess. If there are financial constraints, extreme measures should be led by leadership example not witch hunting. Hold management accountable for the business results. Engage your people as a TEAM - "No one should get left behind! Invoke the potential and creative talents in overcoming bad times.

 

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By JShenton
05th May 2009 17:57

John,
Your views are well repsected in the industry and your comments in the main are obviously valid if contentious to many HR professionals as this is the harder side of business management - ie plan to get rid of non performers and look after the good.

I have a concern however that your article in places seems to suggest that HR should take a dual role in the management of people.

Just to calrify then I belive we all agree the role of a manager is to manage the people. If they are incapable of doing this then they shouldn't be managers. You comment on regualr visits to the work place covers this.

I have seen the result of staff reporting to more than one manager and conflict is always the end result. The employee who gets two views of the same situtation is left with no common thread to beleive in and therefore HR need to be very careful HOW they represent views of managers and management issues to employees over managers.

The role of the director is surely to set the strategic values for the business that management are able to relate to staff with a single voice.

Clarity and focus are required.

The role of the HR professional to aid business in a recession is therefore to assist management in the creation of job role profiles that meet the business needs and to ensure that management are in a position to measure and feedback individual performance to individuals such that they can deliver against these business requirements.

These issues are objective rather than subjective and must in my opinion be open to a single interpretation.

HR to my knowledge are not experienced in line management of individuals and are rarely on the front line, having little experience of the challenges facing individual employees.
It is often the job of the line manager to "Stand Up For" a member of his staff when these conditions cause problems.

You also comment on the refuge of reorganisation. Here I would venture a comment that re evaluation of a business stratgy is critical in an economic downturn as the business focus needs to change at a pace equivalent to the changing market place. Once again we are left with the dilemma - how many HR professionals understand the need for business values in relation to the changing market and how this impacts on the communication required to bring members of staff in line with any changes that must be made to strategy?

I would be interested to understand how HR professionals see their role in the business scheme of things.

What input does the board of directors NEED from HR to ensure the business survives the recession rather than what plans are they going to make for a future that might not happen if the business doesn't make money today, and HOW is this going to be communicated?

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By Jon Ingham
07th May 2009 09:50

I agree with John that HR can play a key role in helping move organisations from summer into winter, and with Yuvarajah that corporate governance plays a major role in this.

I also think that John is right in suggesting that HR should get their hands dirty and develop relationships with employees - at least those most critical groups - key leaders, talent, high potentials etc.

I don't think having a relationship implies detracting from the line manager's own relationship with their employee.

In the very best organsaitions, I agree this role isn't required.  In most, it still is.

 

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By JohnPope
07th May 2009 11:01

Hello Vuvarajah,

It is gratifying to get a comment from Malaysia, thank you.  I am sorry that you do not like my analogy with gardening.  Perhaps I can put it differently.  In good times many organizations become sloppy; they tolerate under-performers; they carry extra staff - at all levels; they allow waste; they become complacent.  They ought not to, but they do.  They should have thought more about the direction the business is taking; they should have prepared for the future, but many do not.  When tough times come unexpectedly, they have to change and they have to change fast.  Most find that they have to reduce staff because the business is just not there and because they cannot afford to keep people idle.  They should be selective and keep the best wherever possible; those who do not perform well enough should be the first to go - at whatever level in the organization - including the Board.

Regards, John

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By JohnPope
07th May 2009 11:08

Hello Jon,

Thank you for the compliment and your comments. I did not intend to give the impression that HR should have a dual role in managing the people.  I did intend to make the point that HR should have more face-to-face contact with the staff, at all levels, so that they know what really goes on in the organization, what the mood is, what the staff feel, what issues there are, and where those issues are so that HR can advise management accordingly.  Unfortunately in too many organizations HR is relegated to dealing with employment details and does not get out.  In one Local Authority, which I know well, staff never see anyone from HR from one year's end to another - staff do not even know the name of the Head of HR or who to go to if they have problems.  HR certainly do not know what is going on!

Regards, John

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