The Role of HR in Economic Slowdown due to pandemic

The Role of HR in Economic Slowdown due to pandemic
This is an ironic situation where attrition suddenly comes to an all-time low since jobs are not easily available, but organizations want to reduce headcount.

See-saw sacred own…the downturn certainly doesn’t stay down!

As I jogged in the park, my eyes fell on three kids who were playing on the see-saw in a very unique manner. While two kids were going up and down on the see-saw, the third one was precariously trying to balance the two at the same level. Worried that she might fall and hurt herself, I tried to convince her to get off the see-saw.

She did jump off finally, but with a few words of innocent wisdom. She said, “Things go up and down all the time, but it is important to balance the ups and downs. That’s what gives the thrill since most people don’t do it!” This kept me wondering at myself and I started reminiscing about my HR journey.

I have had the unique experience of putting my foot into an industry just when the recession is about to hit that particular industry. This happened so many times that I have even earned the title of “Downturn specialist” by my friends in the fraternity. Living through an economic downturn can be a grueling experience both for the employer as well as for every employee.

Economic Slowdown is an ironic situation where attrition suddenly comes to an all-time low since jobs are not easily available, but organizations want to reduce headcount.

The hiring freeze gets announced, but there is a lot of fresh talent waiting to be tapped. The talent demand-supply equilibrium sways like the see-saw in the kids’ park! Who is going to balance this like the third child of wisdom?

Great organizations convert economic downturn to their advantage and decide to take it in their stride. They utilize this time for an inward gaze. Almost all the time organizations have been focusing on the customers and the external stakeholders.

Perhaps the Economic Slowdown is a blessing in disguise for organizations and they are left with no option but to take a look at themselves. Organizations that understand this have shifted their focus to their employees in tough times. Morale is often low and it becomes HR’s prerogative to keep employee engagement high. How does HR achieve that?

This is a daunting task as it seems since Economic Slowdown also means budget cuts. Driving any initiative with a slashed budget is by no means a cakewalk. Pressure mounts on HR Leaders to come up with ideas to reduce headcount, handle hiring freezes, and manage morale despite unattractive salary revisions.

Here are some tips and tricks for HR to do the perfect balancing act. HR can take a three-step approach.

Reinforce Trust in the Leadership

The role of HR is to build employees’ trust in leadership through honest, effective, and frequent communication, regardless of the circumstances. The Economic Slowdown is a time when jobs are scarce and employees find themselves caught between the devil and the deep sea. Many a time, low morale and frustration can cause negativity to spread in the organization.

HR’s role here is to keep reinforcing trust in the minds of the employee by showing that they care. An interesting observation is seen in Leigh Branham’s book titled, “The 7 Hidden Reasons Employees Leave: How to Recognize the Subtle Signs and Act Before It’s Too Late.”

Branham studied more than 19,000 exit interviews produced between 1999 and 2003 by the Saratoga Institute to write his book. When HR or company leadership neglects communication, the result is that employers risk their employees losing confidence in them. During a slowdown, it’s all that more important to communicate and build employees’ trust.

Strengthen Reverse Mentoring

Another large organization realized that they are having to deal with the multi-generational workforce. They hence decide to utilize the downturn to brace themselves to face the future workplace. Of the various methods of getting all generations together is the oft-used term ‘reverse mentoring’.

This helps bridge generation gaps and break abrasive barriers. This organization not just got the younger generation teach new skills to the older folks, but strategically worked on critical problem statements in order to fuel organizational growth.

The millennials in the organization took up important assignments like brand building and repositioning and the combination of the experienced old brain and the tech-savvy youngsters training them on the latest skills and technologies was an extremely valuable way to cross the downturn phase.

Pay Cuts instead of layoffs

Several organizations have resorted to paying cuts at senior levels of the organization sparing the ones at the bottom with an understanding that the accrued deficit will be corrected when business improves. If this comes about voluntarily it is even better and such a move sends a strong signal to the employees that everyone is in it together, creating a strong bond.   

A healthy company that knows where it wants to be in two to five years’ time will be constantly evolving, and HR will always be an important change agent at the heart of key decisions. If yours is an indomitable go-ahead company then a recession will be an opportunity to move ahead faster at the cost of your rivals and not a time to offload staff, many of whom have experience and skills your organization will need as it continues to grow.

“Our greatest glory is not in never falling but in rising every time we fall”, said Confucius. This is true for every organization as it navigates through economic downturns. Great organizations emerge even greater.


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