HR and the economic climate

Ask any HR professional what’s keeping them awake at night, and they’ll answer ‘the recession’. Personnel Today has carried out a survey with Hays Specialist Recruitment, looking at the economic climate and its impact on HR and recruitment. Tara Craig reviews the findings.

Perhaps the biggest question any of us ask or are asked these days is when the recession will end. The respondents to this survey take a fairly positive view. While the largest group (38%) expected the economic recovery to start within the next 12 months, 21% predicted an end to the recession within six months, and 11% by the end of 2009. Most optimistic of all were the 13% who believed the recovery has already begun – 16% of them in the public sector, and 11% in the private (see graph below).

Julie Waddicor, managing director of Hays Human Resources, says: “It is likely this confidence comes from the stabilising of recruitment and a decrease in redundancies and headcount freezes.”

Just over half of respondents (52%) felt that HR’s role in taking their organisation successfully through the downturn was very important. The same proportion believed that HR’s role would remain the same, in terms of importance, as the recovery progresses, while 46% said that it would become more important.

Asked whether the recession had raised HR’s profile within the organisation, respondents’ answers were evenly split. Key areas where HR’s profile had risen included: assisting in redundancies, restructuring, giving advice, and greater involvement in people issues.

But has HR done enough to justify an ongoing improved profile? Recruitment is a key area, particularly as the economy picks up, with many organisations still feeling the effects of having come out of the last recession short-staffed. Six in 10 respondents said their talent pools contained skills for the future, while 29% said they were having to recruit externally. Worryingly, 14% said they have neither the necessary skills nor are developing their talent pool.

As the economy picks up, companies may find themselves having to fill vacancies with little warning, but the survey found that seven out of 10 respondents take more than three months to find and hire a senior executive. The methods used for recruiting senior staff were met with varying degrees of enthusiasm, depending on the sector. Employing agencies was popular in both the private (86%) and public (75%) sectors, whereas three-quarters (75%) of public sector organisations used printed recruitment advertising, compared with only 44% of private sector companies. The private sector (11%) was keener on using social networking for recruitment than the public sector (3%), but both figures may have been higher had recruitment for junior roles been included. Almost three-quarters of participants have no formal onboarding policy. Among those organisations that do, 84% said that responsibility lies with the HR department, and 48% with the department that the newcomer had joined.

Attitudes towards senior newcomers were wide-ranging. While 83% of people said that regular meetings with the recruit’s line manager would take place during the probationary period, and 75% said that these continued beyond probation, one in 10 said they provided nothing and expected people appointed to senior roles to hit the ground running. But as Waddicor says, communicating with someone during their probationary period can show the organisation how successful the placement has been, and will give a strong indication of what they can expect from their hire in the future.

Retention has also come to the forefront during the recession. Keeping good people makes better financial sense than replacing them, and with many companies having to make redundancies, it has become more important than ever to keep the people they will need when the recession ends. Few companies are in a position to offer pay rises or bonuses this year, so there is a growing need to be creative when it comes to motivation and retention. More than three-quarters (76%) of respondents said they were using development as a retention tool.

As to whether recruitment will pick up over the next few months, 71% of those questioned expected it to stay the same where senior appointments are concerned, while 53% believed it would remain unchanged at middle management and junior level. Three-quarters of respondents had carried out more senior recruitment before the recession.

What of HR post-recession? Waddicor says: “It is going to be crucial for HR departments to manage employee perception of the function over the coming year, as associating such negative changes with the department might result in bad feeling among junior staff, which can in turn affect retention levels.”