A Project Report On: Importance of Human Resource Role During The Recession

A PROJECT REPORT ON
IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION
SUBMITTED TO
PROF. Nupur Sharma
Center for Management Studies
Ganpat University
SUBMITTED BY
MBA (AGRIBUSINESS) SEM - II
Vishvak Baxi – 02
Batch
(2010 – 2012)
IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION Page 1

PREFACE
The practical training is a part of studies for the students

of management. The practical training helps us to know
the working problems of industries before we enter into
any organization as an employee or executive. This will
help the students to come out & exhibit by theoretical
training.
Under this practical training collect the information &
prepare a report on importance of HR policy and there
need in organization in recession time.
I am glad to present my report based on

“IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION”

ACKNOWLEDGEMENT
A Practical project is a golden opportunity for learning and self

development. We consider our self very lucky and honored to have so
many wonderful people lead us through in completion of this project.
My grateful thanks to Mr. Gurang Shah (HR Manager) who in

spite of being extraordinarily busy with his duties, took time out to
hear, guide and keep me on the correct path. I do not know where I
would have been without him. A humble ‘Thank you’ to Sir.
Prof. Nupur Sharma whose patience I have probably tested

to the limit. She was always so involved in the entire process, shared
her knowledge, and encouraged me to think. Thank you, Dear Madam.
Last but not the least there were so many who shared
valuable information that helped in the successful completion of this
project.

ABSTRACT
The Topic of our Study is:
“IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION”
The objectives of our research are to determine the management

of Human resources in the recession period at the corporate level,
to identify factors which affect Human resources in one way or
other, to determine ways to cope with it and managing it in the
superior manner, to make a safe workplace from the point of view
of the job-security during recession. The population for the subject
study is the employees working in the Corporate.

OBJECTIVE OF STUDY
The Objective of study is
“MANAGING HUMAN RESOURCES DURING THE

RECESSION PERIOD”
The objective of research is to determine ways by which “Human

Resources” can be managed in the recession period, to know
about the effects of recession, to determine the most sensitive HR
functions with respect to recession. A careful review of these
questions areas led to the development of the following specific
research objectives:
 To determine the perception and views of the employees.
 To determine how HRM can play an important role in coping

with recession.
 To identify effects recession has left on the employees.

Table of Contents____________________________________
PREFAC ...….…………………............................................................................................................I
ACKNOWLEDGEMENT .................................................................................................................II
ABSTRACT …................................................................................................................................III
OBJECTIVE OF STUDY ..................................................................................................................V
Introduction.................................................................................................................................01
Journalism Survey of Importance HR in Corporate…………………….........................................02
HRM Roles in Recession..............................................................................................................10
Main HR Recession Initiatives ……...........................................................................................................................12
HRM Priorities and Recession.....................................................................................................................................13
Recession and Employees’ career options .........................................................................................................16
Affected HR Processes by the Recession...............................................................................................................17
The HRM Recession Quick Wins should include the following actions............................................18
HRM Communication in Recession...........................................................................................................................19
Talent Management in Recession/Under Pressure.......................................................................................20
Recession and Recruitment…………………………………………………………………….………….................21
Strategic Role of HR During Recession................................... ..............................................................................22
Role of HR During Recession……………......................................................................................................................25
HRM Innovations in Recession...................................................................................................26
Recommendation ……....................................................................................................................28
Top ten bad HR Practices ...............................................................................................................29
Top ten bad HR Tips for Beating the recession ……………….......................................................32

INTODUCTION
Recessions are not sprints; they are endurance events. To find out how nonprofits are
faring during the toughest recession in more than 30 years, in the surveying 100
nonprofit executives across the United States at six-month intervals since late 2008. As
of October 2009, some 80 percent of our respondents had experienced funding cuts,
and a full 93 percent said that they were feeling the effects of the downturn. Stuart
Flagg, ninemsn Money August 2008 said, So far this year, the word ''recession'' has
been bandied about with alarming regularity. In fact it's running a close second to
''inflation'' for the most overused and least understood financial term of 2008. So what is
a recession? Technically, an economy is in recession if it experiences two consecutive
quarters of negative growth. By negative growth, I mean shrinkage. That's the technical
term, but the word itself has a wider meaning — it generally refers to a downturn across
a broad range of economic indicators like spending, business investment, a fall in
demand and so on. However, a prolonged period of economic stagnation generally
stops being referred to as a recession and becomes a depression. There is no official
definition of recession, but there is general recognition that the term refers to a period of
decline in economic activity. Very short periods of decline are not considered
recessions. Most commentators and analysts use, as a practical definition of recession,
two consecutive quarters of decline in a country's real (inflation adjusted) gross
domestic product (GDP)—the value of all goods and services a country produces.
Most of us have an intuitive idea of what a recession entails - job losses, plant closures
and tough times for families. But what exactly is a recession? There are a few similar,
but not identical definitions. To learn what economists mean by a recession,
Economists officially define a recession as two consecutive quarters of negative growth

in gross domestic product (GDP). The National Bureau of Economic Research cites "a
significant decline in economic activity spread across the economy, lasting more than a
few months" as the hallmark of a recession. (Davis, 2008) According to The National
Bureau of Economic Research (NBER), a recession is a downturn in a nation's
economic activity. The consequences typically include increased unemployment,
decreased consumer and business spending, and declining stock prices. The
indications are all in places, even the leading companies stumble left and right from the
overwhelming effects of the recession. Desperate measures are being seized apart
from the layoffs, bailouts, mergers acquisition etc… besides these measures; everyone
should realize that it is as important to adjust in managing HR during recession. In fact,
Human Resource Management plays an even superior role in difficult circumstances
than during periods of growth and prosperity.

JOURNALISM SURVEY OF IMPORTANCE HR IN
CORPORATE
Officially define a recession as two consecutive quarters of negative growth in gross
domestic product (GDP). The National Bureau of Economic Research cites "a
significant decline in economic activity spread across the economy, lasting more than a
few months" as the hallmark of a recession.
Economic recessions are caused by a decline in GDP growth, which is itself caused by
a slowdown in manufacturing orders, falling housing prices and sales, and a drop-off in
business investment. The result of this slowdown is falling employment, and rising
unemployment, which causes a slowdown in retail sales. This creates a downward
spiral in manufacturing and increased layoffs. A stock market decline, known as a bear
market, can either be a result of a recession but is often a cause itself. According to The
National Bureau of Economic Research (NBER), a recession is a downturn in a nation's
economic activity. The consequences typically include increased unemployment,
decreased consumer and business spending, and declining stock prices. Recessions
are typically shorter than the periods of economic expansion that they follow, but they
can be quite severe even if brief. Recovery is slower from some recessions than from
others. The reality in all organization is that the directors and board are in the position of
highest influence and their primary responsibility is leadership. As such, considering the
consequences of a recession such as we currently face is not the time for directors to
abdicate their responsibilities – it is time for governance leadership. The directors and
the board must think and respond strategically.
The recession can change the HRM priorities promptly, or at least, they have to be
adjusted. The HRM can be asked to produce cost savings on current programs when
the organization has no resources so that the new initiative can be added. The quick
scan of the ongoing procedures and policies has to be made by the HRM to prepare for
the termination/cancellation or change, when asked to make important cost cuts. The
recession is about the cost cuts, planning, designing efficient cost-effective HR
policies.5 There has to be an assessment of the HR priorities for selecting the
processes and policies which have to be discontinued. Simple matrix is the least tool to
be used in which the processes and procedures are divided according to their costs and
the impact they have on the organization.
As recession takes a choke hold on the economy, you might find that there are fewer
new customers walking through the doors of your business. Your existing customers
may also seem to have shut their wallets tightly as they also try to control their rising
expenses. If your small business that has a mortgage loan on it, then you could be in
deep trouble. This is because lenders have been steadily hiking their interest rates in a
bid to cover their losses due to other borrowers not being able to pay their monthly
installments. If your current mortgage is about to end, then you could find that there are
no lenders available who are willing to provide you with a new mortgage at low interest
rates. This could put enormous pressure on you, as you would be forced to decide on
which loans to clear off first - all on a steadily-decreasing income. The first casualty
during any recession is usually sales. Once sales are down, then it usually isn‘t long
before profits could follow the southward trend. If in the past your sales have been
excellent, and if you can afford to take a little downward trend in sales in stride then
don‘t worry; but if you really need to increase sales even at the cost of incurring
additional expenses, then there are two ways to achieve this. One is to lower profits in
an attempt to achieve higher sales figures. The other way would be to spend more on
marketing and advertising while keeping your profit margins unchanged. This will still
lower your profit figures due to an increase in your marketing expenses. However, this
move would not only increase your presence in the market but you could be the first to
reap the benefits as soon as the economy emerges from the recession. A recession
accompanied by high inflation will mean that your monthly expenses could increase,
even as you face the daunting task of maintaining your profits. This could eat into your
savings and pose financial problems as the days go by.
You can reduce your expenses by cutting down or splitting them. Unnecessary
expenses should be totally avoided - and only those expenses related to your business
should be attended to on a priority basis. The indications are all in places, even the
leading companies stumble left and right from the overwhelming effects of the
recession. Desperate measures are being seized apart from the layoffs, bailouts,
mergers acquisition etc… besides these measures; everyone should realize that it is as
important to adjust in managing HR during recession. In fact, Human Resource
Management plays an even superior role in difficult circumstances than during periods
of growth and prosperity. Priorities of the organization get changes by the recession. HR
strategy and priorities should reflect the changes in the organization‘s precedence. The
Human Resource Management cannot live on its own; it has to chase the general
business strategy.
Generally, the processes and procedures which have the maximum cost and minimum
impact on the organization should be terminated by the HRM. As the termination of
some of the policies
Can be very for employees, the HRM has be very cautious. These are those processes
which have highest impact. A quick response has to be made by the HRM to changed-
conditions emerged by the termination of the least important procedures and policies as

the recession changes the HRM priorities, but the HR strategy needs to have a constant
or steady approach throughout the recession period. In the recession, the HRM
priorities has to be changed by the HRM in a very sensitive way, so that the employees
feel some consistency and security and they do not lose trust in the victory of the
organization in the war against recession. It is important her to understand also that the
recession does not mean at all to change or terminate everything; the change in the
HRM priorities should not touch the corporate culture during the whole recession period.
Different HR processes get affected by the Recession. It can affect some HR processes
very badly and at the same time, some other processes can be completely immune
from its impact. The reaction of the HRM has to be very fast and the whole HRM team
has to be included in it, as all employees have to help other employees who have got
affected badly in order to the level of satisfaction intact. The organization has a need of
saving cost to discover and potential added source for the cost effectiveness and start
of new era of growth. A new HRM vision and HR strategy has to be prepared for the
approaching period as the cost cutting is not the ultimate way to built a strong enough
organization fighting against the recession.
The most affected HR processes are:
Recruitment is a first of HR processes which gets affected and changed in the

recession. The jobs vacancies are terminated and HRM has to arrive with the new
recruitment strategy. A new set of skills and competencies can be hired to strengthen
the market position organization. Global Hunt says that "recession is not the end of the
road for recruitment firms but it actually has given us a Picture that what kind of profiles
floating in the market”.
Eventually, one can say that go in the market but with utmost care. Training; as it‘s an
instant cost-cut, the trainings are cancelled. The organization can focus later on the
more specialized training sessions and can introduce more internal training courses.
Compensation and benefits is another affected HR process. The HRM can ask the
department to come up with new compensation schemes, which will be cost-effective
and will serve as a motivator for employees to be more proactive. One of the most
affected HR processes by the recession is Recruitment. Vacancies are not offered by
the companies and the job applicants’ number increases rapidly and recruitment
process has to be managed smartly. The organization has to make a change into focus
of the recruitment and the recession is the opportunity to focus on the redesign and the
development of the recruitment process. The recession is related to the organization‘s
focus on the strategic initiative in order to make the stable income of the organization
and the future growth. Usually, the organization does not stop recruitment completely
and some new job opening can come into view. The HRM should be asked to make a
swift SWOT analysis of the employees in the organization in order to have an

unambiguous view about the gaps in the skills and competencies. These gaps have to
be filled by the organization with new and fresh employees from the job market who can
bring more creativity into the organization with them and ready to work hard to save the
organization.
The top management has to tell the HRM for the approach through the crises so that it
can decide about the needed skills for the victorious fight against the HRM for the
approach through the crises, so that it can be decided about the needed skills for the
victorious fight against the recession. Usually, the proposal is designed by the small
team for the solution and recognition of the skills. A mix of current employees and new
hires constitutes a team recommended by the HRM. In order to find a complete different
set of skills and competencies, the recruitment team has to be prepared.
The focus of the organization can be changed by the recession and the new employees
play an important role to secure the organization in the recession time. As the most
immediate effect of the recession is on the recruitment, the recruitment-freeze is a
common solution in the start of the recession. Usually, for the depth of the recession,
the organization is unprepared and the recruitment-freeze seems to be a quite usual
solution.
For the organization, the recruitment freeze sounds a good solution, but lots of issues
brought by it, for the smooth operation of the organization, the complete recruitment-
freeze can be a big danger and the organization is in need of exceptions to be done.
From the beginning, the recruitment-freeze has to be done smartly. The majority
managers need to trust the HRM. Rules will apply on all the requests. Basically, the
recruitment-freeze is related to have faith in the top management and the HRM that the
expectations and requests from all the managers will be managed and evaluated fairly.
The recruitment freeze is an opportunity to make organization slimmer. But for this,
good decision is made by the top management and the HRM. Companies have started
realizing that HR recruitment, selection, retention etc., is quite a cumbersome process
calling for high amount of time and resources and inflicting cost. Thus, they are warming
up to the idea of outsourcing HR function to offshore firms. Multinational companies are
saving millions of dollars by outsourcing HR. Advantages associated with outsourcing
the HR departments include:
 Great Reduction in Costs:
HR outsourcing (HRO) converts fixed cost to variable cost and can produce quality
performance in low cost. Companies have started realizing that off shoring HR
department to low-cost areas will help in reducing cost while maintaining the quality of
performance. Gradually, offshore outsourcing firm becomes an inbuilt function of the

organization and the combined effect of their partnership further strengthens the
process of the company.
 Simple Global Models:
Outsourcing takes HR functions to a global scale. With entrance of global service

providers in the market competition has become tough; however the service delivery
model has become mature and highly satisfactory for global clients. Outsourcing helps
in moving HR executives from local role to global. Few advantages of global
engagements for HR are:
1. Expertise: HR Managers of varied expertise from all over the globe improves the
recruitment process.
2. Cost Effective: As stated earlier, hiring HR personnel from low-cost countries

helps in providing same or better service at lower price.
3. Workplace diversity: Globally functioning HR brings employees from across the

globe and makes the work environment culturally more diverse.
In a tough competitive global market, the benefits of global HR model are too valuable
for a company to miss.
 Best of Breed Solutions:
With outsourcing talent hunt has become broad spectrum. Now finding the desired
candidate satisfying all selection criteria is not the main area of focus, instead, best-of-
bread approach is taken to find the leaders in the field.
 Risk lessening:
Many a times companies faces crisis due to sudden loss of the key HR person. A tight
labor market delays finding a suitable replacement. Hiring and training a new person for
knowledge transfer becomes difficult and costly in recession. An outsourced HR
engagement helps to almost terminate these problems. In HRO, hiring new
replacements and training them are the responsibilities of the service provider, thus,
ensuring a continued hassle-free service.

 Value Addition
Generally, in-house HR functions are primarily visualized as cost-centre; whereas, HRO

models chiefly focus on strategies which would improve business and reduce cost.
Unlike in-house HR personnel, outsourced HR team does not get caught up in internal
issues and thus can concentrate on cost-reduction, talent acquisition, training and
retention. This results in the following benefits:
Increases process efficiency by concentrating on important issues.
Increases flexibility of business and makes it more dynamic.
Increases employee satisfaction and productivity.
Increases the business network and help gain market access.
Increases sales and business during recession.
In the current volatile market the need to focus on core business activities has become
an absolute necessity. To cater to core activities, companies are opting to outsource
non-core process like Human Resource management. Like every process, outsourcing
too has its own pros and cons. Few disadvantages of HR outsourcing are:
It requires lots of coordination with the service provider.
It reduces the scope of learning for an organization.
It reduces the control over the support function thus affecting the integrity of the
company.
To minimize these disadvantages organizations has to understand their ultimate motive

of outsourcing. A clear vision of goal and transferring only the functions and not
responsibilities will certainly prove to be fruitful in smooth outsourcing of HR functions.
This is no cakewalk and requires a great deal of knowledge, planning, skill and
commitment.
The recession usually does not attack the recruitment agencies. And to have a better
relationship with recruitment agencies, the recession is a good time. These agencies
are pushed by the recession to offer better conditions and the quality of job candidates
catches the better level as well. The era of economic growth is the time for the
recruitment agencies while the recession is the time for the companies. The willingness

is shown by the recruitment agencies to re-negotiate the contracts in order to keep their
and they are fighting for the job vacancies. But the recruitment process can be changed
by the company as it pays fees to the agency, but asking more flexibility from the
recruitment agency is the best option in the recession. For searching good potential In
other companies, the recruitment agencies can be used as a weapon as they needs
business to be on the roll, the best contacts can be found in the competitors on the job
market and the good employees can be hired by the organization cheaply.
Talent will never be affected by any kind of recession and to hire the top potentials from
the market and competitors. To hire the top-class employees, the HRM has to act
quickly before the actions are taken by their current employees for their protection. The
managers and key employees of the organization should always be asked about
excellent people in their knowledge on the job market. The list of candidates should be
with HR recruiters to whom they can ask to join the organization. The talent can be
made more sensitive by the recession to the job offers from the competitors as the
talent is usually known in the industry. For the organization, the personnel expense
does not increase due to the talent in the job market, but the new sources of revenue
can be brought by them and the trust of the current employees can increase big time.
The HRM is in the fast reaction to the recession, having good contacts with the
recruitment agencies and making a proposal to the top management for the hiring of
prospects to be started as soon as possible. For this, there has to be a co-operation
between the HRM and the top management because from them, the talents in the job
market need to know the clear plan and expectations. The clear expectations cannot be
communicated but the HRM itself, but it can co-operate for the job positions with the
middle management which they create for the top talents.
Personnel expenses added to the pay roll of the organization has to be monitored by
the HRM as the agreed rules cannot be exceeded by the company and the close co-
operation between HRM and the agencies is necessary to get the top-class employees
from the market. The recession undoubtedly is a difficult time and the top talents from
the market will definitely help organization to win the battle against the recession. The
management of talent in the recession time is also very important. A small or minor
mismanagement can dent the organization in the shape of losing the talent in this
critical time. Since the talent is the best asset in the recession, this is necessary for the
organization to mobilize the entire top potential in the company, so that the new and
innovative solutions can be brought to fight with the recession. There is a huge pressure
on the talent management in the recession period. The HRM has to leverage the
resources of the organization. Each manager tries to protect the resources in the unit. A
clear group of employees has to be defined by the talent management in order to be
separated from their current units in finding a new successful way to the future. The top
management has to give mandate to the HRM in the decision about the staffing of the
special taskforce to define a new and bright future of the organization. In the times of
economic growth, the talent management works nicely. In the recession, it gets under
an enormous pressure from the time management and the top management as their
interests is not aligned.
The survey of 600 small businesses to determine how the recession is affecting their
outsourcing plans. The survey results showed that 41.9% said they planned to
outsource more in the near future, either because they‘ve cut full-time staff (7.0%) or
because they‘re simply unable to hire full-time staff (34.9%). They are also outsourcing
more functions than ever before – 28.5% said they are now outsourcing something that
they previously thought they couldn‘t. In light of such numbers, it‘s hardly any surprise
that 14.6% of them report that they have replaced employees with contractors in the last
year, and 14.5% have hired a contractor who would have been otherwise unemployed
or a victim of the economic downturn.
HRM Roles in Recession

The recession is healthy, from time to time. The recession helps to stop the businesses,
which are not bringing value added and the human capital is transferred to more vital
businesses at lower costs. In the companies, which survive the recession, the HRM
Role is very important.
The recession is very dangerous for the companies. During the times, when the
business grows dramatically, the HRM Function introduces different policies, which are
focused on spending money. The company was able to carry all the costs and the
employees started to take the policies as the standard.
In time of the recession, the HRM Role is to make cost cuts and the HRM Function has
to provide the list of the policies and the procedures to be cancelled or discontinued.
The employees do not like it, but the company has to return to the healthy basis for the
future growth.
The HRM Function has to be able to identify the top potential in the organization quickly
as the company needs to make the cuts in the human capital of the organization. The
HRM Function needs to provide the tools to managers to inform their key employees
about the security, the company wants to offer to key employees.
The HRM Function is not a department to make employees happy, the role of HRM
Function is also about the cuts in the costs of the organization and the HRM Function’s
role is about minimizing the damages to the organization.
The recession can be a very interesting period for the HRM Function. The HRM
Professionals can design, develop and implement a lot of new HRM Processes in the
recession, which are simple and really efficient. But they need to have a clear vision of
the HRM behavior in the recession to be really successful.
The HRM Management has to define the HRM Vision for the Recession. The
employees in Human Resources have to understand the goals for the difficult period of
the recession. Many activities in the organization can be cancelled, but the HRM
Employees have to understand the reasons.
The HRM Vision for the Recession is needed for the employees of the HRM Function as
they should serve the organization as the change agents. Many procedures, policies
and processes can be cancelled during the recession or they can be strongly changed
and the HRM Employees have to be able to explain the reasons for the change or
cancellation of the policies.

The HRM Management has to push the top management to define the vision of the
organization for the recession as the roles in the organization can be clearly defined.
The top management has to set the vision for the strategic initiatives as the whole
organization can share the same goals. It is very painful for the top management to
define such goals, but the employees and managers can support the painful way to
prosperity, when they believe and trust their leaders.
The HRM Function can serve as the navigator and facilitator for employees, but the
HRM Vision for the recession has to be defined and clearly communicated and
explained to HRM employees. The HRM Management has to communicate the full story
as the HRM Employees have usually access to confidential information and they can
build a good picture of the organization’s health very quickly.
The HRM Vision for the Recession should be about the trust and honesty. The HRM
Employees have to understand the need to make changes and to make the cuts in the
procedures they introduced and run for the organization. The HRM Management has to
be proud to announce the cutting of job positions in the HRM Function and to explain
the reasons for selecting the employees to be fired.
The HRM Vision for the Recession can play a significant role in the success of the HRM
Function in the recession. The HRM Management Team has to set it as a priority and
the vision has to be transformed into actions quickly.

Main HR Recession Initiatives
The HR Function has to conduct several HR Recession Initiatives as soon as the
recession is recognized in the organization. The organization can grow rapidly, when
the recession ruins companies around your organization. But, when the organization
feels the pain from the recession, the HRM Function has to start several HR Recession
Initiatives.
The HR Recession Initiatives have to be focused on the analysis of the current situation
and the unlocking the potential for the future growth. The HR Recession Initiatives are
not just about the cost cutting, the recession initiatives have to be focused in more
areas:
 Cost Cutting
 Key Groups of Employees
 Process Efficiency
 Honest Information for Employees
 Management Consulting
The HR Recession Initiatives have to be balanced well. The cost cutting is about the
immediate activities to decrease the personnel expenses of the organization, but the HR
Recession Initiatives have to be focused on the future as well.
The employees are told to be the best capital of the organization and the HR Recession
Initiatives cannot be focused on the full destroy of the human capital of the organization.
The employees to be fired have to be selected carefully and the rest of employees have
to sure about the future of the organization. The organization has to guarantee the
future for the most important employees – the key employees, high potentials and the
managers.
The HRM Function has to focus on the honest communication in the recession. The
HRM Function has to inform the employees fairly about the bonuses, salaries and
number of employees in the organization in advance as the employees can prepare
themselves.
The HRM Function has to have a good balance in the HR Recession Initiatives. The
employees and managers have to feel the fairness and transparency in the initiatives as
they can build the trust to the HRM Function.

HRM Priorities and Recession
The recession changes the priorities of the organization. The change of the organization
´s priorities should be reflected in the HRM Function priorities and HRM Strategy as
well. The HRM Function cannot live alone; it has to follow the general business strategy.
The HRM Priorities in the Recession can change quickly or they need to be adjusted at
least. The organization has no resources to add to the new initiatives and the HRM
Function can be asked to produce cost savings on current programs.
The HRM Management has to make a quick scan of current procedures and policies to
be prepared for the cancellation or change, when asked to make an urgent cost cut.
The recession is about cost cuts and designing efficient, cheap HR Processes.
The HR Priorities have to be assessed using a simple tool for selecting the processes
and policies to be discontinued. The best tool is to use the simple matrix, which divides
the processes and procedures according their costs and impact on the organization.
Generally, the HRM Function should cancel the processes and procedures with the
highest costs and lowest impact on the organization. The HRM Function has to be very
careful as cancellation of some policies can be very sensitive for employees. Those are
the processes and procedures with the highest impact.

The recession changes HRM Priorities. The HRM Function has to make a quick
response to changed conditions by the cancellation of the least important procedures
and policies, but the HRM Function has to change the HR Strategy to have a consistent
approach during the whole recession period.
The HRM Function has to adjust the HRM Priorities in the recession very sensitive way
as the employees feel some security and consistency and that they can trust the
organization and its success in the war with the recession. The HRM Function has to
keep the role of the employee advocate and this should be reflected in the decision
matrix as well. The recession is not a chance to change and cancel everything, the
corporate culture should not be touched by the change of the HRM Priorities during the
recession.
The recession is about the creative Human Resources Management. The HRM
Function is asked to bring new ideas, to change the HRM Processes and to develop or
change the procedures. And this effort has to be cheap or it has to cut the costs of the
organization. The HRM Innovation is easy in times of the business growth, but the
recession is not good for big innovative HRM Initiatives.
On the other hand, the top management understands the effort to innovate the HRM
Processes better. The top management is in the search for the potential cost savings
and they count every single penny brought by the line management. The HRM Costs
are usually a very significant cost to the organization and the HRM Function has to be
proactive.
The HRM Function has to focus on unpopular innovations during the recession as the
role of Human Resources during the recession is to save money to the organization.
The top management expects all the support functions to bring innovative solutions,
which will have to make the organization stronger, when the next growth era comes.
The HRM Innovation during the recession has to focus on the following topics:
1. Reduce the number of employees in the organization

2. Strategic initiatives to increase the productivity and efficiency of the whole
organization
3. Redesign of the compensation scheme
4. Cancellation of several benefit schemes
5. Training and Development Programs cutting

On the other hand the HRM Function has to find innovative solutions for the following
topics:
1. Identifying the real key employees and to keep them in the organization
2. Identifying the real top potentials and to strengthen their development program
The second two topics have to be done with the minimum additional costs and it is a
really hard task to accomplish. The HRM Function has to have priorities in mind and the
strategic impact of the HRM Innovations in the recession time. The role of the HRM
Function is not to cut the costs for the time being, but to make the organization stronger
and ready for the future growth.

Recession and Employees’ career options
Affected HR Processes by the Recession

The recession affects different HRM Processes. Some HR Processes can be affected
by the recession very hardly and other processes can be completely immune from the
recession impact. The HRM Function has to react very quickly and the response has to
include the whole HRM team as all employees have to help the most affected
employees to keep the level of the satisfaction.
The organization needs to save the costs and it needs to identify and potential
additional source for the cost saving and starting a new growth era. The HRM Function
has to prepare a new HRM Vision and a new HR Strategy for the coming period as the
cost cutting is not the only way to build a stronger organization fighting with the
recession.
The most affected HR Processes are the following:
1. Recruitment - The first HR Process with the change in the recession. The job
vacancies are cancelled and the HRM Function should come with a new
recruitment strategy. The organization can hire a new set of skills and
competencies to strengthen the position of the organization on the market
2. Training – The training are cancelled as it is a quick cost cut. The training can be
later focused on more specialized training session and more internal training
courses can be introduced.
3. Compensation and Benefits – The department can be asked to bring a new
compensation scheme, which will save the costs and motivate employees to be
more proactive.
4. HR Front Office – The HR Front Office have to be present at clients all the time
as they will need a strong guidance and facilitation during the recession.
The HR Processes are heavily affected by the recession, but the HRM Function has to
take this as the opportunity to change and to bring new ideas on the scene. The
recession is the best time to design a completely new approach of the organization to its
human capital.

The HRM Function should be ready for the recession, which comes from time to time.
The HRM Function should be always very careful about the costs added to the
organization as cost cutting always hurt. The HRM Function has always to predict, the
recession will come and the nice initiatives can be then very painful initiatives. The HRM
Function has to prepare the HRM Recession Quick Wins.
The HRM Recession Quick Wins should include the

following actions
1. Stop and prioritize the recruitment process. The vacancies should be cancelled
and all the vacancies should be strategically re-shifted. The organization can
need a completely different set of jobs to survive the recession. Why the
continuing recruitment process should make the situation even worse?
2. The FTEs in the organization has to be evaluated. The number of FTEs can be
fine, but the structure has to be reviewed. There is no company in the world,
which cannot decrease the number of FTEs. The HRM Function has to offer the
methodology for the FTEs review and the HRM Function has to act as the
facilitator in the process of the FTEs review.
3. The bonus schemes have to be reviewed. The bonus scheme can support the
organization in the time of the strong growth, but it can de-motivate employees in
time of the recession. The HRM Function has to prepare a good analysis of the
bonus scheme performance and its impact on the motivation of employees. The
HRM Function can propose additional changes to the bonus scheme to provide
the employees with some kind of the stability.
4. The talents have to move around the organization to play their strategic role in
the change of the organization during the recession. The organization needs to
awake its creativity and the shift of the talents can help a lot.
The HRM Recession Quick Wins are not hard, but they need a lot of courage from the
HRM Function. The HRM Function has to reflect itself and it has to be proud to say, it
made some mistakes in the past. The recession is always about the restart and the
HRM Function needs to restart its processes quickly at the beginning of the recession.

HRM Communication in Recession
The HRM Function is always responsible for the mass communication to employees in
the recession. The HRM Function should be responsible for the consistency,
transparency and fairness of the crisis communication to employees. The recession is
usually not about the good news, but the HRM Function has to be the employee
advocate and the messages should provide the employees with the clear outlook of the
future.
The crisis and recession communication have to be targeted, as not all the employees
should receive the same amount of the information. The Sales employees should have
completely different details from the Operations guys.
The HRM Communication in the Recession is about defined and agreed target groups.
The organization cannot publish the details about its business position to all the
employees, but some groups of employees have to know more to feel comfortable and
more secure.
The HRM Communication is one of the strongest tools for the retention of key groups of
employees. The talents and key employees have to receive more information from the
organization to keep their own security and their value for the organization.The organization
needs to raise the level of the motivation and the honest communication is one of the best tools
for motivation. But the HRM Function has to act as the consultant to make sure, the employees
are not de-motivated and frustrated by the amount of messages and the details provided.
The HRM Function has to provide the advice on the communication channels used as not all the
messages should be sent via email. The HRM Function is the only function in the organization
to have a general picture of the target groups and it can provide useful consultancy in the
description of the target communication groups. The HRM Communication in Recession is
about a clear description of the organization´s position on the market, the economic outlook for
the next period and about the strategic products and services, which will be the leading the
growth in the era after the recession. The employees should know about these topics as they
can prepare themselves.

Talent Management in Recession
The talents are the best assets in the recession, as the organization needs to mobilize
the entire top potential in the company to bring new and innovative solutions to fight with
the recession.
The talent management is under a huge pressure in the recession. Each manager tries
to protect the resources in the unit and the HRM Function has to leverage the resources
of the organization.
The talent management has to define a clear group of employees to be separated from
their current units in the finding a new successful way to the future. The HRM Function
has to have a mandate from the top management in the decision about the staffing of
the special task force to define a new and bright future of the organization .
Talent Management under Pressure

The talent management works nice in the time of the economic growth. In the recession,
the talent management gets under a huge pressure from the line management and the
top management, as their interests are not aligned, at least fully.
The HRM Function has to be able to mobilize all the talents across the whole
organization and the line management can be fully confused by such an activity. The
top management can have a nice plan to use the top talents of the organization to have
a new opportunity to win the war with the recession, but the line management likes to
have the talents in their units to have the smooth operations certainty.
The talents usually like the challenges and the recession is the challenge for them. The
HRM Function has to find the plan to allow the top potentials to be freed from their
current units and to propose a good plan to the line management to keep their
satisfaction and buy-in.
The talent management is usually set as the long-term activity of the HRM Function.
The recession makes the whole talent management a lot quicker. The talents have to
be set to new teams, they have to learn to co-operate quickly and they have to learn to
make quick decisions.
The talent management in the recession is about the quick assessment of the top
talents of the organization and assigning them to the special tasks from the top
management. The role of the line management has to be minimized as they have no
chance to prefer their own task above the strategic tasks of the top management.

Recession and Recruitment
Recruitment is one of the most affected HR Processes by the global recession on the
market. The companies do not offer vacancies, the number of job applicants grows
rapidly and the organization has to manage the recruitment smartly.
The organization has to change the focus of the recruitment and the recession is a good
moment to focus on the recruitment process development and redesign.
The Talents on the job market

The recession is a good moment to hire the top potentials from the job market and other
competitors. The HRM Function has to act quickly to hire the best class employees
before their current employers take the action to protect them.
The HR Recruiters should always ask the managers and key employees of the
organization about the excellent people, they know on the job market. The HR
Recruiters should have a list of the job candidates, who can be asked to join the
organization.
The talents are usually known in the industry and the recession can make them to be
more sensitive to the job offers from the competitors. When the organization has a clear
plan for the fight with the recession.
The talents from the job market do increase the personnel expenses of the organization,
but they can bring new sources of the revenue and they hugely increase the trust of the
existing customers.
The role of the HRM Function is in the quick reaction to the recession, making the
proposal to the top management and having a good contact with the recruitment
agencies to start the hiring process as soon as possible.
The HRM Function has to co-operate closely with the top management, as the talents
from the job market need to know the clear plan and clear expectations from them. The
HRM Function cannot communicate the clear expectations itself, but it can co-operate
with the middle management of the job positions, which can be created for the top
talents from the job market.
The HRM Function has to monitor the personnel expenses added to the payroll of the
organization as the company does not exceed the agreed rules and the HRM Function
has to co-operate closely with the recruitment agencies to get the best class employees
from the job market. The recession is a tough time and the top talents from the job
market will definitely help to win the battle on the market.

STRATEGIC ROLE OF HR DURING RECESSION
The recession is an opportunity for HR professionals to step and contribute strategically.
In the classicalstrategy paradigm, we begin by looking at the macro economic
environment. Then we look at the micro-environment - what affects us and our
competitors. Next, we establish which strategic factors HR influences directly. Finally,
we drop down to our tacticsThe recession is about the creative Human Resources
Management. The HRM Function is asked to bring new ideas, to change the HRM
Processes and to develop or change the procedures. And this effort has to be cheap or
it has to cut the costs of the organization. The HRM Innovation is easy in times of the
business growth, but the recession is not good for big innovative HRM Initiatives.
The HR Management has to focus on unpopular innovations during the recession as the
role of HR during the recession is to save money to the organization. The senior
management expects all the support functions to bring innovative ideas and solutions
which will lead to stronger organization, when the next growth era comes.
The point has to be focused by HR management during recession are as follows:
 To optimize the manpower strength.

 To take strategic initiatives to increase the productivity and efficiency of the entire
organization.
 To work on compensation benefits.
 Redesign training and development programs.
 Ensure your organization’s policies and handbooks are up to date. Remember
that an annual review of your employee handbook for compliance by an
experienced professional is highly recommended. Also, each employee having a
copy of the employee handbook is not enough. They have to be able to read and
understand the content. Be sure that you provide employees a handbook in a
language they can read and understand.
 Layoffs are never easy. Ensure you are familiar with your legal responsibilities in
a lay off to minimize your organization's risk. Be sure that you have properly
defined the criteria you are using to determine who will be let go.
 Alternative Workweek Schedules and Flexible Scheduling can maximize
production and cut-back on overhead costs for organizations. Be sure you follow
all of the DLSE rules when deciding if an Alternative Workweek Schedule or
Flexible Scheduling is right for your organization.
 Cutting Pay may be an option to consider saving on today’s costs. Is this really
an option for your organization? How are you pay scales as related to the
market? Are you willing to risk losing key employees whose talents may be
needed by other organizations, because you chose to reduce their pay at this

time? Remember, you should not cut pay without a recovering strategy of how
you will re-adjust when the economy has turned.
 Downsizing does require internal document maintenance for your organization.
As jobs are modified and responsibilities are increased changes also must be
made to your job descriptions.
 On the other hand the HR Management has to find some innovative solutions
during the recession like,
 To identify the real key employees and to intact them in the organization
 To identify the real top potentials and to strengthen their development program
The HR Management has to have priorities in mind and the strategic impact of the HRM
Innovations in the recession time. The role of the HR Management is not to minimize
the costs for the time being, but to make the organization stronger and ready for the
future growth.
Recommendations while your employer facing negative challenges during recession:
1. Top management should know the contingency plan.
2. Do the brainstorming session with your top management and contribute in their
strategic planning.
3. A complete or partial job freeze, however, communicate to the workforce that the

company many continue to recruit key individuals even in difficult times
4. Review the employee performance evaluations to determine the key people that

company cannot afford to lose.
5. Flow of Communicate should be from top to down that will help in making
conducive atmosphere within the organization
6. Make prepare yourself for individual and group concerns therefore there should be

a proper counseling session.
7. To maintain a calm atmosphere
8. Review all HR policies, processes and procedures to ensure that they are
purposeful and contribute directly to the success of the company.
9. Suppose the company has to lay-off staffs ensure that there are no other
opportunities for them in other functions or divisions of the organization.

10. Advise managers to deal the process of managing change.
Managing Human Resources (HR) in a difficult economic environment is even more

demanding than working in times of rapid growth. Therefore the
Task of HR is very important to maintain equilibrium throughout the hierarchy.
How to intact your employee during recession:
Here is how to keep your employees with you and away from your competitors during
tough economic times.
· Differentiate Between Your Good and Average Employees
· Redirect Your Employees to Other Departments (Job Rotation)
· Listen to Your Employees
· Keep Them Motivated and Busy (Communicate-Communicate and Communicate)
· Show them the long term vision
The above steps will enable the employer to hold its team together during a recession,
and will even make bond between all of you stronger. Employees should be motivated
enough to stick to the employer during tough times and put in the extra effort required
for the organization growth.

ROLE OF HR DURING RECESSION
The most recent survey, which was conducted among 117 employers in early
December, found that other popular cost-cutting measures included:
 Downgrading/canceling holiday party (35 percent)
 Increasing benefits communication (32 percent)
 Eliminating/reducing seasonal workers (28 percent)
 Organization-wide restructuring (23 percent)
 Raising employee contribution to healthcare premiums (20 percent)
 Increasing pay communication (16 percent)
 Restructuring HR function (14 percent)
 Implementing a salary freeze (13 percent)
 Having a mandatory holiday shutdown (13 percent)
 Reducing/eliminating other employee programs (12 percent)
The percentage of employers that have already implemented salary freezes jumped
from 4 percent in October to 13 percent in December. Sixty-one percent of employers
reported that they reduced their planned merit increase for next year from 3.8 percent to
2.5 percent.
HR role in strategic people management
HR is still more focused on transactional activities and HR operating efficiencies than on

high level strategic people issues.
However, the executives' concern about people is not translated into increasing
importance for HR. In fact, the HR function, which executives believe is concerned with
activities such as reward and benefits, performance evaluations and HR operating
efficiencies is often seen as being unconnected with how a business will deal with key
strategic HCM challenges such as talent management, workforce productivity and
leadership development.

HRM Innovations in Recession
The recession is about the creative Human Resources Management. The HRM
Function is asked to bring new ideas, to change the HRM Processes and to develop or
change the procedures. And this effort has to be cheap or it has to cut the costs of the
organization. The HRM Innovation is easy in times of the business growth, but the
recession is not good for big innovative HRM Initiatives.
On the other hand, the top management understands the effort to innovate the HRM
Processes better. The top management is in the search for the potential cost savings
and they count every single penny brought by the line management. The HRM Costs
are usually a very significant cost to the organization and the HRM Function has to be
proactive.
The HRM Function has to focus on unpopular innovations during the recession as the
role of Human Resources during the recession is to save money to the organization.
The top management expects all the support functions to bring innovative solutions,
which will have to make the organization stronger, when the next growth era comes.
The HRM Innovation during the recession has to focus on the following topics:
1. Reduce the number of employees in the organization
2. Strategic initiatives to increase the productivity and efficiency of the whole
organization
3. Redesign of the compensation scheme
4. Cancellation of several benefit schemes
On the other hand the HRM Function has to find innovative solutions for the following
topics:
1. Identifying the real key employees and to keep them in the organization
2. Identifying the real top potentials and to strengthen their development program
The second two topics have to be done with the minimum additional costs and it is a
really hard task to accomplish. The HRM Function has to have priorities in mind and the
strategic impact of the HRM Innovations in the recession time. The role of the HRM
Function is not to cut the costs for the time being, but to make the organization stronger
and ready for the future growth.
As a leader and strategic partner in your organization, you have the tools to assist your
company in surviving and thriving through these difficult times. First you need to start
thinking strategically…
 How can the organization make effective and economical changes that will help
through these difficult times?
 What can I do to minimize our organization’s risk for fines, violations and/or
unnecessary legal proceedings?

Following area should be looked upon:
 Ensure your organization’s policies and handbooks are up to date. Remember
that an annual review of your employee handbook for compliance by an
experienced professional is highly recommended. Also, each employee having a
copy of the employee handbook is not enough. They have to be able to read and
understand the content. Be sure that you provide employees a handbook in a
language they can read and understand.
 Layoffs are never easy. Ensure you are familiar with your legal responsibilities in
a lay off to minimize your organization's risk. Be sure that you have properly
defined the criteria you are using to determine who will be let go.
 Alternative Workweek Schedules and Flexible Scheduling can maximize
production and cut-back on overhead costs for organizations
 Cutting Pay may be an option to consider saving on today’s costs. Is this really
an option for your organization? How you are pay scales as related to the
market? Are you willing to risk losing key employees whose talents may be
needed by other organizations, because you chose to reduce their pay at this
time? Remember, you should not cut pay without a recovering strategy of how
you will re-adjust when the economy has turned.
 Offer Professional Development as a reward or incentive to employees for
performance and hitting goals. Professional Development courses are an
economical way to reward employees with the gift of education and skills they will
use throughout their lifetime.
 Downsizing does require internal document maintenance for your organization.
As jobs are modified and responsibilities are increased changes also must be
made to your job descriptions.
 Remember that the law is very specific on what positions can be considered
Salaried – Exempt and what constitutes an Independent Contractor. Looking at
adjusting your staff to fit into one of these two categories is NEVER the answer
when trying to save money.

RECOMMENDATION
Recommendations while your employer facing negative challenges
during recession:
1. Top management should know the contingency plan.
2. Do the brainstorming session with your top management and contribute in their
strategic planning.
3. A complete or partial job freeze, however, communicate to the workforce that the
company many continue to recruit key individuals even in difficult times
4. Review the employee performance evaluations to determine the key people that
company cannot afford to lose.
5. Flow of Communicate should be from top to down that will help in making conducive
atmosphere within the organization
6. Make prepare yourself for individual and group concerns therefore there should be a
proper counseling session.
7. To maintain a calm atmosphere
8. Review all HR policies, processes and procedures to ensure that they are purposeful
and contribute directly to the success of the company.
9. Suppose the company has to lay-off staffs ensure that there are no other
opportunities for them in other functions or divisions of the organization.
10. Advise managers to deal the process of managing change.
Managing Human Resources (HR) in a difficult economic environment is even more

demanding than working in times of rapid growth. Therefore the task of HR is very
important to maintain equilibrium throughout the hierarchy.

Everybody talks about the best HR practices, it is
Good, but merely bringing in the best cannot give the
Desired results if some Bad HR practices co-exist in
The organization.
So what are those Top Ten Bad HR
Practices which caution & alert an organization.
1. Employee has no access to personal data (over-confidentiality):
Can’t view, can’t update personal information; has no access to his/ her Leave records,
salary data, attendance record, training & promotion details. Not sure if the
management’s decisions are based on correct information. This breeds suspicion since
there is a perceived lack of transparency.. Impact is on employee-employer
relationships.
2. Lack of clarity on Deliverables:
Absence of a well-defined job-description leads to lack of accountability. Neither the

employee nor his/ her immediate superior (boss) are able to define the job-deliverables.
Result is the loss of focus & interest.
3. Absence of Goal-based performance:
Employee is unaware of the goals to be achieved during the year. There are no
quarterly targets and no process to track their completion. The organization carries out
merely an end of the year postmortem of an employee’s performance. The
unaccomplished tasks go unnoticed. Difficult to build a performance culture in such
organizations.
4. Employee development without his/ her involvement:
No opportunity is given to an employee to project his /her development needs. Training

manager nominates employees on various development programs. Even the Line
Manager is bye-passed. There is no formal process to collect training needs and do gap
analysis of skills & competencies. All this leads to unplanned employee development, a
wasteful effort, both in time & the dollars spent on training.
5. Rusting of Talent:
Long tenures in the same position with no avenues for job rotations make people
rust & relax. In the first 2-3 years in a job position an employee experiences new
challenges, innovates & contributes. Thereafter the routine takes over. Even a
change of location, if not the job, can provide the requisite challenge to an employee
this is enough to remove the rust and make the talent bloom again.
6. Non-performers lobby:
Each non-performer remains glued to his/ her chair. The worst happens when a non-
performing manager has to apprise subordinates who are professionally competent,
high-energy youngsters. Some of them leave the organization per-maturely and add to
the attrition rate. The end result is the building of a non-performers lobby which impedes
the progress of the organization. It is a vicious cycle which can be stopped only by
filtering out the non-performers.
7. Absence of schemes to retain performers:
Getting rid of the non-performers is important, but to be able to identify, develop & retain
high performers is equally vital. If your best talent is being lured by other companies,
your schemes to reward performance are simply inadequate.
8. Shyness to obtain Feedback:
Employees have individual opinions about the quality of leadership in the company.
They know their engagement levels at the workplace. They understand what hinders
their performance & satisfaction. Unless the management is prepared to receive and
analyze their objective feedback, no worthwhile initiatives can be launched to apply
timely corrections. The end-result could be lower productivity and increasing
disharmony.
9. Line Manager not a People-Manager:
If a Line Manager only performs his/ her operational/ technical role and has not been
groomed to become a people - manager, who is to blame? H R has probably faltered by
not institutionalizing a system which ensures that before appointing an employee as a
Line Manager, he is given training on how to manage people. Competencies are
needed for understanding your workforce, deploying HR processes, motivating people &
uniting them as a team. A good engineer at the work place has to be transformed into a
good manager for organizational growth.

10. Technology Phobia:
Many old timers, even in some big organizations, refuse to acknowledge that
introduction of technology can empower HR staff to provide timely, accurate & quality
information for employee oriented decisions. They sometimes feel that IT staff will need
to be hired to manage computer based systems. They probably need an exposure to
technology which neither requires elaborate hardware platforms nor software expertise
within your premises. The Vendor must do everything for you to implement & maintain
your systems as long as you like. Shed your phobia at least.

Top 10 HR Tips For beating the recession
A survey of HR directors and business leaders by recruitment firm The MBS Group has
produced what it calls 'ten tactics for tough times’. Those involved in the research were
all at board or senior management level, within the retail, luxury, and consumer goods
sectors. How useful these tactics actually are is open to debate, but they provide a
useful barometer of the current thinking taking place in top firms.
Tactics for Tough Times
1. Ride the storm - preparing for difficult times but not currently planning large scale
layoffs. Leaders of consumer, retail, leisure, and luxury industries are wisely shying
away from kneejerk staff cuts or talking about culls of more mature staff. This reflects an
innovative and creative approach to talent that other sectors would do well to observe.
2. See upside in downturn - the best business leaders see opportunities in turmoil.
Business leaders are focusing on the future, aiming to find new opportunities and
disrupt existing markets with innovation, based on consumer insights.
3. Show me the value - rapid response and appropriate price promotion are working for
some.’ Extreme value propositions’ are working well with increasingly cost-conscious
consumers. In an effort to grab market share, a race down-market is developing, to
capture consumer spending power with a ‘best-price’ message.
4. Pocket returns in pockets of growth - some sectors are positively booming, such
as online, home entertainment and some luxury brands. Online business continues to
defy gravity. The results seem to indicate a ‘digital divide’ between companies who have
older business models and those who have successfully incorporated e-commerce and
new technology platforms. The latter are now benefiting from this shift in consumer
behavior.
5. Refocus on emerging markets - opportunities in Asia are attracting increased

attention and investment whilst Europe and the US flounder. Many respondents
indicated that they are refocusing their businesses on the significant growth
opportunities in the Middle East and Asia and, to a lesser extent, Eastern Europe.
6. Keep up with customers - businesses must find a way to match or exceed

customers' increasingly agile changes in behaviour.Customers’ behavior is changing
faster than businesses are able to shift their strategies. Consumer loyalty is not
surviving the challenge of great deals and people are defecting to (own) brands that
previously they would not have considered.

7. Hang on to talent - attracting the best talent is increasingly vital, but also becoming
increasingly difficult. Business leaders are not planning for the large-scale lay-offs that
happened in previous recessions. Instead, they are focusing on whether they have the
skills and talent to take them through the downturn. They recognize that it will be
increasingly difficult to attract the best new talent into their organizations.
8. Empower your people - business leaders are recognizing the value of experience,
while also ensuring that their people have the right skills and training in place to survive
and prepare for the upturn. Internally, the focus is on having the right strategies in place
to retain the best people, as well as managing under-performers in a tougher way.
Incentives are being adapted to reflect these changed priorities.
9. Keep up morale - maintaining workforce morale will be a decisive benefit.

Businesses reported that they are redoubling efforts to demonstrate decisive leadership
via more internal communication. For example, several companies are making
increasing use of face-to-face communication to increase the CEO’s visibility, to set the
right tone and convince employees that their jobs are safe. They recognize the need to
avoid the creation of a bunker mentality within their businesses and build employee
confidence and trust in their leadership.
10. Engage your staff - keep staff members on your side.


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A PROJECT REPORT ON

IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION

IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION Page 1

The practical training is a part of studies for the students

I am glad to present my report based on

IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION Page 2

A Practical project is a golden opportunity for learning and self

My grateful thanks to Mr. Gurang Shah (HR Manager) who in

Prof. Nupur Sharma whose patience I have probably tested

IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION Page 3

The Topic of our Study is:

“IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION”

The objectives of our research are to determine the management

IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION Page 4

The Objective of study is

“MANAGING HUMAN RESOURCES DURING THE

The objective of research is to determine ways by which “Human

 To determine the perception and views of the employees.

 To determine how HRM can play an important role in coping

 To identify effects recession has left on the employees.

IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION Page 5

OBJECTIVE OF STUDY ..................................................................................................................V

HRM Roles in Recession..............................................................................................................10

Main HR Recession Initiatives ……...........................................................................................................................12

HRM Priorities and Recession.....................................................................................................................................13

Recession and Employees’ career options .........................................................................................................16

Affected HR Processes by the Recession...............................................................................................................17

HRM Communication in Recession...........................................................................................................................19

Talent Management in Recession/Under Pressure.......................................................................................20

Recession and Recruitment…………………………………………………………………….………….................21

Strategic Role of HR During Recession................................... ..............................................................................22

Role of HR During Recession……………......................................................................................................................25

HRM Innovations in Recession...................................................................................................26

Top ten bad HR Practices ...............................................................................................................29

Top ten bad HR Tips for Beating the recession ……………….......................................................32

IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION Page 6

Economists officially define a recession as two consecutive quarters of negative growth

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The most affected HR processes are:

Recruitment is a first of HR processes which gets affected and changed in the

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 Great Reduction in Costs:

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 Simple Global Models:

Outsourcing takes HR functions to a global scale. With entrance of global service

2. Cost Effective: As stated earlier, hiring HR personnel from low-cost countries

3. Workplace diversity: Globally functioning HR brings employees from across the

 Best of Breed Solutions:

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Generally, in-house HR functions are primarily visualized as cost-centre; whereas, HRO

Increases process efficiency by concentrating on important issues.

Increases flexibility of business and makes it more dynamic.

Increases employee satisfaction and productivity.

Increases the business network and help gain market access.

Increases sales and business during recession.

It requires lots of coordination with the service provider.

It reduces the scope of learning for an organization.

To minimize these disadvantages organizations has to understand their ultimate motive

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HRM Roles in Recession

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