Human resources input is key to managing recession risk

A rallying call has been sounded for HR to help save organisations from the dangers of recession.

After shares plummeted across the world last week, senior figures spoke out on the key role for the profession in a damaged economy.

Dave Gartenberg, HR director at Microsoft UK, said: “In turbulent times more than any other, there is not only the opportunity, but the need for HR to provide leadership to the business.

“The ability to attract and retain workers when times are tough really requires leaders to be at their best.”

The Chartered Institute of Personnel and Development – which has already issued a warning over the grim economic conditions – said HR had a huge role to play.

Reward adviser Charles Cotton said: “HR needs to step up to the plate. It is crucial to businesses getting through a serious recession.”

In the short-term, HR staff in the financial services sector will be the worst hit, he said, but if a full-blown recession develops, every sector will be dragged in.

“There may well be recruitment freezes, job losses and a lull in the war for talent,” he said. “There will be a need for pay restraint as budgets fall.

“Companies will have to focus on rewarding outstanding contributions – those people they cannot afford to lose. We will see an increased emphasis on talent management.”

However, he warned that training budgets could be deci­mated, and pension schemes closed – leaving HR professionals with a huge task keeping employees motivated.

Wayne Story, managing director of outsourcing firm Capita HR Solutions, said HR had to be on top of its game. “Proactive, early interventions will be expected along with strong credible plans,” he said.

Business leaders backed calls for more HR vigilance.

Patricia Peter, head of corporate governance and employment at the Institute of Directors, said: “HR is vital to an organisation in a recession. If you want to survive, then you have to keep your best people.”

While Susan Anderson, director of HR policy at the CBI, said: “HR should keep a steady nerve. We don’t want to talk people into a recession.”

How can HR help to beat the recession?

  • Have people statistics at your fingertips
  • Read the business press everyday
  • Justify and evaluate your spending
  • Check your contractual and legal obligations
  • Communicate extensively with employees

Source: CIPD

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