How An HR Professional Can Plan For Recession
The cost-of-living crisis and other social and political problems create a feeling of uncertainty and fear on a global scale, while the recession is inducing anxiety in everyone, especially businesses. There is the real danger of losing customers and having to reduce the budget. Many employees, in turn, have a constant fear of layoffs or cuts in their wages. This can affect not only their workplace performance and productivity but their mental health. Fortunately, HR departments can provide solutions to most of these issues. HR professionals are trained to handle crises and can offer their insights on how to plan for a recession in order to minimize its negative effects on a company.
8 Ways You Can Ace Recession Planning
1. Build A Strong HR Foundation
Recession planning won’t be successful unless you have built a strong core for your HR department. As a professional, you know how important safety and stability are for a company and its employees, especially during rocky times. You need to continually update the company’s policies according to your people’s needs. Gather the necessary information to answer questions they might have and reassure them, and develop resources to support your staff during their moments of need.
2. Focus On Employee Engagement
Engaged employees are more focused and productive, therefore contributing more to the company. However, it’s your job as an HR professional to build enthusiasm and keep them motivated. Try team-building events or workshops that allow them to collaborate with peers and learn from SMEs. You can also practice transparency by sharing crucial company matters with them and including them in the decision-making process.
3. Provide Reskilling Opportunities
In difficult financial times, your recession planning must include reskilling, as every employee counts and is of value. How else can they contribute to the company? Make your employees feel appreciated by assigning them new projects and offering them training opportunities to reach their full potential in the workplace. This is often more cost-effective as you might be able to increase their salaries in order for them to take over more responsibilities instead of recruiting and onboarding new people. Get every team member involved, regardless of their experience levels or positions in the company, asking them which skills they would like to develop or enhance.
4. Clearly Communicate
By keeping an open line of communication, you ensure that every employee’s concerns are addressed as quickly as possible. This will also prevent false rumors from spreading, so you have to be clear about the company’s intentions. Communicate everything effectively to alleviate doubts. Even if you have to announce layoffs, do it with transparency. Even better, if you hear false speculations, arrange a meeting to debunk them.
5. Evaluate Benefits Packages
Instead of making cuts to benefits, determine if you can create more meaningful benefits that cater to your employees’ needs most cost-effectively. Focus on what you offer rather than how much. Some benefits may need to be reduced, but try to keep those that offer your company a competitive advantage when it comes to recruiting. To compensate for the leaner programs, you might offer each employee a personalized package that suits them while staying within budget. For example, some employees prefer more time off versus monetary incentives. Conduct a survey to gather their feedback and then create a plan of action.
6. Offer Flexibility
Another key step in recession planning is flexibility in the workplace. Staffers tend to prefer working from home and having a schedule that suits their personal lives. This offers them a sense of control and autonomy. However, this should also include setting new guidelines, like policies over remote work or PTO leaves. If layoffs happen, the remaining people are more likely to be stressed or experience burnout, and added flexibility can make them feel comfortable and secure in their jobs.
7. Know Your Expenses
Companies may come to the point where they need to cut expenses. However, do your homework first so that you’re well-informed. What are your highest costs? Do you need to reduce your workforce or stop specific programs? Consult experts if you can’t identify areas of overspending. Remember, it’s essential to weigh the impact of cost-cutting in the long term, as well. How do your spending or budget reductions affect your employees’ morale?
8. Create A Strong Company Culture
The recession will end, but what will remain is a company culture that trains and supports employees during any potential crises. This is also a lesson to be learned from challenging periods. You should make inclusion and diversity the core of your culture. This will offer different perspectives when it comes to company matters and innovation, thus leading to faster problem-solving. Ultimately, your company’s values are what will give you a competitive advantage.
Your HR team must have a stable core to be able to endure tough times and set an example for the rest of the team. They have the power to boost morale, motivate staff members, and analyze where the spending cuts can happen to minimize the impact on the workforce.
For more tips to hone your HR skills and improve employee retention, download our eBook Breaking Into The Industry: The Ultimate Guide For New Human Resource Development Professionals. It includes HR fundamentals, the qualities of a good HR employee, and 12 concepts that every Human Resource leader should master.