When the ship is sinking, you realise that you need to squeeze every ounce of potential from your people in order to keep it afloat.
The added value of HR is harder to quantify when business is booming, but when you are starting from a lower base, every marginal improvement is far more noticeable. As we approach ten years since the start of most recent recession, a few people are wondering about the impact of the next one – where will these marginal improvements come from?
When tough times hit (or even appear on the distant horizon), the first thing to suffer is the mind. Vivid memories of previous hardships suddenly feel so real, and no matter how different our situation, we can’t help but feel the chill wind of trepidation. How important are we to our employers? Maybe it is time to look for something more secure?
Dealing with that initial “fight or flight” fear response on a personal level is something that every HR department and business leader should be thinking about whenever the economic storm clouds gather. People leave (and even change careers) for no logical reason other than “I might lose my job one day” and they want to pre-empt something that may never happen. No company can afford to lose their top performers for this reason.
HR and top management need to identify the critical top 25% of their workforce and do everything they can to ensure that they stay, develop and even grow through any crisis.
That is not an easy task, but retaining your very top people is crucial if your company is going to maximise its chances of riding it out. People retention is what HR does. Losing a top performer in a recession may well have a bigger impact than losing a top client.
The focus of HR needs to shift from the collective to the individual. While company wide initiatives and strategies work well when times are good, when tough times hit, worried individuals need to know that they have someone to talk to. They may not feel comfortable talking to their boss, so their HR contact is the next natural option. HR have to make themselves available, impartial and compassionate – the more people that trust them with their worries, the more people will come to them with their worries. A company of people fighting their demons on their own is a ticking time bomb.
If HR is absent, that time bomb will detonate.
I’m not sure that enough thought has gone into the proactive role of HR in an economic crisis. As much of their activity will unfortunately involve managing a downsizing process, it may mean that employees are less open to discussing their issues. However, if HR takes a considered and personal approach, their contribution cannot be underestimated.