The recession brings a huge pressure on the HRM and the costs for the organization. The HRM has to change its focus quickly – from designing and implementing nice policies and initiatives focused on the employee satisfaction to the initiatives focused on the unpopular cost cutting activities. The recession needs a completely different approach from the HRM employees as the HR Professionals have to focus on very specific groups of employees.
The HRM Function has to follow on the following main areas of concern:
- Policies, which can be cancelled and the cancellation brings immediate savings to the organization. It hurts, but it is needed. You would be surprised how many policies are run in organization, which have on influence on the overall employee satisfaction and how costly for the organization they can be.
- Compensation Budget has to be deeply analyzed to find the potential to cut the costs with no significant influence at the employees. The employees are sensitive to their base salary, but the bonus can be lowered and the savings for the company can be huge. The new FTEs are usually the first item to be cut and the salary review budget is the next in the queue.
- The most important thing the HRM Function is about quick and dirty classification of all the employees in the company:
- Key Employees
- Top Players
- Low Performers
- Rest of the Organization
The segmentation is very important and the HRM has to put very strict limits on each of the categories as the managers has to identify the groups of employees with the significant decrease of investments and the group, which will be really kept as a group of key employees.
Many organizations have their segmentation from the time of the constant growth, but this has to be strongly reviewed as the numbers can be different. The managers do not like this task, but they have to do it as the groups of key employees and top players can be recognized and the special initiatives and special communication can be sent to them.
The most difficult item is about having just one shot. The HRM Function has to get the full support and buy-in from the top management and the managers has to do the identification right and at the same time without sharing any information with their subordinates.
The HRM Function has one goal in the recession – it has to decrease the personnel expenses of the organization. The managers have to understand to this goal and they have to support the HRM Function in this effort.
