The Case for the Importance of the HRM Function even in Recessionary Times
In these recessionary times, it is tempting for the companies to cut
the budgets of the HRM function and focus on cost control and trimming
as a means of profitability. Further, with the squeeze on hiring by many
companies, one of the key activities of the HRM function, which is the
hiring, and on boarding activity remains frozen. Therefore, there is
more the case for pruning the HR budgets. However, companies need to
realize that there is a strong correlation between people management and
economic performance that has been conclusively proved in recent
research by the consulting firm, Boston Consulting Group or BCG. The
research that focused on how companies that do well on talent
management, leadership development, and performance management have been
shown to have significantly higher economic performance. What adds to
this research is the anecdotal evidence from many multinationals that
seems to prove the hypothesis that excellent HR policies makes for a
well-motivated workforce that can ramp up their performance to match the
increased expectations of companies during recessions. The implications
are that in case organizations want to do more at the same cost, they
must focus on Processual cost cutting instead of on HR budgets alone.
Handling Laid off Employee Separations
The second aspect of the HRM function during recessionary times is
that it is often the case that the HRM staff are asked to handle the
involuntary separations. These exits that are otherwise known
colloquially as “pink slips” have to be handled with grace and respect
for the employee instead of condescension and arrogance. The point here
is that when employees are asked to leave, the HR managers and the HR
staff have the unenviable task of making sure that the message is
communicated to those employees who are being asked to leave and to
handle their exits in a structured manner. With the pressure on the HR
staff growing with the increased incidence of layoffs, it is not easy
for the HR managers not to get affected and take things personally.
However, the key aspect here is that the HR managers have to perform
well under pressure and ensure that the outgoing employees are offered
assistance with their job hunts for alternative jobs by giving them the
use of the office space and the facilities for a week or so after their
last day at work. The point here is that gestures like these go a long
way in convincing the other employees that the company is not an
opportunistic employer who is a fair-weather friend to them.
Managing the Motivation Levels of Employees
Talking about the impact of layoffs on the employees who have
remained in the organization, the HR staff also has the challenging task
of keeping these employees motivated and not making them look over
their shoulders periodically to check whether they are next in line to
be laid off. Indeed, this is a delicate and often-diplomatic exercises
that must be carried out with finesse in the same manner exits are
handled. The other aspect of the recessionary times is that more often
than not, companies do not hand out pay hikes and bonuses and hence,
there tends to be a slack in morale among the employees. This is another
of those tasks that the HRM function has to manage in recessionary
times. Given the fact that many companies are struggling to stay afloat
and which leads to resignations from key employees who do not see a
future for themselves in the companies, it is important to remember that
the HRM function must be bolstered rather than cut down to handle these
unpleasant tasks.
Closing Thoughts
Finally, the HRM function also has to cooperate with the
organizational imperatives on the need to reduce costs and hence, must
play its role and part in ensuring that the organization practices what
it preaches and does not merely indulge in cost cutting, layoffs, and
freezing of pay hikes and bonuses.
