The looming recession has been a regular topic of discussion for months now. Some argue it’s started; others say it’s still on the way. Wherever you land on that, it’s essential to prepare your business for the more challenging days to come. We believe HR can help.
With a forward-thinking approach to human resources, your business can shore itself up against the effects of the recession. Though the difficulties of a slowed-down economy will impact your business one way or another, there are steps you can take to weather the storm.
HR professionals are uniquely qualified to help your business handle some of the rigors of a recession. In this blog, we explain some of the HR strategies that can prepare your company for a downturn.
Maintain DEI Efforts
The absolute last thing you should consider when cutting costs is scaling back your diversity, equity, and inclusion strategy. Not only will less focus on DEI hurt your company today, but it’ll also shine a bad light on your organization when you’re ready to spend again. Of course, scaling back on hiring is understandable, but don’t lose sight of your responsibility to maintain an equitable and inclusive workforce.
The recession won’t last forever. By focusing on DEI, you’ll have a more robust talent pool and avoid damaging your company’s reputation. A commitment to DEI is both the right thing to do and the smart one too.
Learning and Development Initiatives
Learning and development is an investment that may seem counterintuitive when you’re cutting back. However, you may not be able to hire much in the near future. So when facing a downturn, empower the employees you have right now. Then, when the economy picks back up, you’ll have a workforce that’s ready to tackle what comes their way.
Of course, use your discretion here. Work with your employees to identify critical areas with the most room for improvement, and focus your efforts there. Investing time, energy, and resources into L&D upskills your workforce and fosters greater loyalty.
Analyze job openings for necessity
Adhering to a more rigid hiring strategy will be critical during the recession. Your HR team needs to audit current job openings and assess new ones based on need. Under normal circumstances, the bar to clear for a necessary hire might be a bit lower.
But less thoughtful recruiting in a recession hurts everyone involved. This economy affects the applicants to your roles as much as it does your business. Upfront collaboration between HR, finance, and hiring managers saves everyone the trouble of hiring for a position you won’t be able to afford in the months to come.
Handle employee relations and support
Entering a recession without proper HR support is a recipe for an employee relations disaster. As the year progresses, you will likely face some difficult conversations. Those encounters need a skillful touch to protect all parties involved.
Additionally, economic struggles affect morale. But what if your work environment could be an escape from the stress of a recession? Your employees need support at work from professionals who know how to give it to them. Employee relations expertise will keep your company culture afloat through hard times.
Assess alternatives to layoffs
You’ve spent countless hours and heaps of dollars acquiring, training, and developing your employees. Talent is as important an investment as anything. Don’t lose it if you don’t have to. We understand that staring down recession-induced cutbacks is daunting. But remember that many companies are in similar spots. However, with some HR expertise, alternatives are possible.
For example, consider restructuring aspects of your organization to better suit the talent you have. You may find that employees appreciate the new responsibilities and utilization of other skills. But even more so, you can find ways to save jobs in the process.
Another early step to take would be freezing hiring. Pay cuts and reductions in hours may also be necessary in some cases. Likewise, reducing benefits costs and postponing pay raises could help. By saving money outside layoffs, you’ll be helping your business in the long run.
Whatever approach you take, remember that the talent market remains a strange one. Recruiters still struggle to fill roles. Moreover, many companies are labor hoarding even in the face of the recession. So if you let employees go, there’s a good chance you won’t be able to get them back.
Conduct strategic layoffs if necessary
Unfortunately, reductions in force (RIF) are sometimes needed during a recession. Though we hope this would be close to a last resort for your company, human resources professionals know how to guide this process.
Some choices will be easier than others. For example, you may identify positional redundancies to cut as you restructure your organization. However, the actual layoffs themselves are no easy matter.
Your HR team should be able to conduct them empathetically while also ensuring the legal bases are covered. Beyond the legalities, assess how well-documented processes are on each team. Will you have to start from scratch if you cut certain people? Don’t skimp on your due diligence.
RIFs are delicate processes. Ensure your HR team is prepared to handle them with the attention to detail and humanity they deserve.
ADDA provides recession guidance!
Navigating a recession tests the mettle of every business leader, but you don’t have to do it alone. ADDA’s consultants prepare our clients for recession conditions with strategic HR planning and execution. So schedule a call today to start building your plan!