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Name: Rajesh Sridhar College: Symbiosis Institute of International Business (SIIB) Year: First Address: D-816, Symbiosis Infotech

Campus D Hostel, S.No 141, Hissa No 1, Phase-1, Hinjewadi, Pune 411057 Contact no: +91-7709981050

Role of HR during Recession

Recession is that curve on the economic circle wherein there is a slowdown in the economic activity characterized by fall in GDP, investment spending, household income etc and a rise in unemployment rate. In that gloomy state, executives in the top echelons of a Corporate would wish for this period to phase out fast. If one could infuse positivity into the ergonomic setup during this lull, the positive energy associated, perceived through a magnification lens, would bring about the much needed vibrancy for reversal in fortunes. This amplification widens the scope of influence and has far-reaching implications on the future. The above mentioned positivity could be infused by the HR department of a business organization and this is one of the opportunities for it to step in and ascertain its strategic role in business. In this article, we shall see how the role of HR during economic recession can be strategic being creative, bringing in new ideas to the table, changing/developing HRM processes and procedures in a cost-effective way.

Strategic Role of HR
Articulate Communicator
Accommodative Mediator

Talent Nourishment


Motivator Increase affinity quotient Advisor to CEO Retention of best talent

Economic recession is the time when HR professionals need to develop and retain talent amidst retrenchment, recruitment freezes, salary-cuts, and drop in budgets. They need to be proactive and chip in with early interventions as for any organization to survive during

recession the ability to retain its best talent is must. During these uncertain times, companies realize the need to possess competent workforce, which shall ensure that focus stays on trainings. But ironically there may be a constraint in training budgets. This is the time for HR professionals to leverage technology by implementing e-learning solutions with rapid authoring tools which enable creation of content efficiently. The use of technology can be extended to the usage of messenger services that offer free PC to PC calls. This considerably cuts down travelling costs. An HR professionals ability to articulate is very important. He/she needs to be an eloquent communicator and an accommodative mediator. In the role of the former, it helps stop grapevine discussions among employees regarding company financial position when there is delay in salary/appraisal. In the role of the latter, it solves conflicts between the management and the employees so as to create a distress-free work environment. It would not be a bad idea to be transparent and make employees aware of the status quo. This paves way for an HR professional to don the hat of a motivator he/she should suggest employees required measures to improve productivity by which they could make a difference and emerge stand-out performers. Besides, he/she needs to bring to the attention of employees the long term plans of the organization and strategies in place and how they could contribute to implementing them. This establishes a feeling of belonging in employees, which is key to increasing the affinity quotient and thereby translate the same into higher motivation levels. As far as the staffing aspect is concerned, its an opportunity to replace hiring with nourishing talent with extra responsibilities. This helps assess the potential of employees, future capabilities and estimate future staffing plans. A check on attrition rate needs to be maintained as employees, doubting the financial stability of the company may feel demotivated and contemplate on queuing up to quit. This shall enable the organization not lose credibility which is very important in the long run. On the flip side, performance evaluations are to be reviewed to determine the employees the company can afford to lose the best time to get rid of non-performing human resources. This would be perceived as a natural aftereffect of the economic recession and do not much harm to the companys image as well as to the effectiveness of its HR policies. Compensation structure is another facet in which the HR department can make a significant contribution. Restructuring could be done in an intelligent way that would help employees save taxes. This would lessen the employee perceived cut in pay. Also, the benefit

schemes shall be marginalized to only the top performers. This helps achieve cost cutting as well as retention of best talent in the organization. Professional Development as a relational reward for top performers is an economical way to appreciate employees. The gift of education and provision of opportunities to hone skills greatly help in future. Former NASSCOM Chairman, Mr. Ganesh Natarajan, in a keynote address on The Role of HR in Trying Times organized as part of the annual conference of the Pune Chapter of the National HRD Network in 2008, emphasized on the need for HR managers to perform the role of a lighthouse and not get carried away by the effects of the global economic meltdown. He further stated that in tough times, they must act as advisors to the CEOs. A strategic role played by the HRM Function helps not just cut cost for the organization for a short time period but also make the organization more stable and ready for the future. These measures sow the seeds for rapid economic growth by retaining the best talent and ensuring availability of well-equipped and highly motivated employees.