Human Resources in a Recession

One of the many topics that business owners are continuously asking me about is Human Resources and how to manage their people through these unchartered waters.

My response: Now is the time to do what we should always be doing and that is to use and develop our Human Resources to their fullest potential. Our employees are our most valuable resource and, therefore, we need to address this critical asset head-on.

• Do performance reviews diligently and more frequently. There is no better time to clarify expectations (and probably get a positive up-tick in performance) than now.
  

• Provide Leadership like never before.
  
  • Your employees look to you for stability and guidance during difficult times.
  • Give them articles or have short seminars about money management, positive news, and future challenges.
    
  • Educate and communicate.
  • Share positive news regularly.
    

• Consolidation of jobs is common place as volume decreases and activity reduces.
  
  • Good job descriptions and knowledge of your workforce’s abilities and potential are critical to doing this analysis well. These make those performance reviews a lot easier!
    

• Rank your staff by their contribution to the bottom line and/or the ROI of their cost to the organization. Sales and production staff become disproportionately valuable in an economic downturn.

• Adjust wages, benefits, and perks to better align with shrinking revenues and margins.
  
  • You are the steward of this economic ship and are responsible for its success and must make hard decisions.
  • Is there someone who is overpaid or underperforming?
    

• In many cases, layoffs are necessary.
  
  • Your best employees deserve consideration for their hard work and loyalty.
  • Many considerations need be thought through before taking actions: will several employees share in the layoffs and work alternating weeks to draw unemployment periodically; will you provide job attached status to key employees you want to return, will you offer a return to work bonus after the period of layoff ends, etc.

• Possibly reducing hours is an alternative, either in select slow parts of the business or across the board.

• The labor force market has turned around over the last six months and this might be a time to upgrade talent and experience.
  
  
• If you are hiring, there are some great people available. However, be aware that not everyone is a top performer. For many companies, when they are letting go of people, they are laying off those who are the poorest performers - their bottom 20%. May sure your hiring process includes Leadership and Communication Style assessments.
  

DO NOT WAIT to take the necessary actions required to right your economic ship until you are overly vulnerable and might not survive. DO WHAT IS NECESSARY so that you have cash yet are poised for recovery when the tide comes back in.