At this year’s UK annual conference, the Chartered Institute of Personnel and Development’s chief executive, Jackie Orme, urged HR professionals to plan for the long-term future of their organisations while steering a steady course for both good times and bad. Well, given the economic recession, the bad times are well and truly here and we have seen the future of household names such as Woolworth and MFI looking distinctly tenuous. So no doubt Jackie was thinking how stringent cost cutting seem to be inevitably linked to redundancies - and there is a growing list of organisations who have just gone down that route, including City group, BT and Rolls-Royce plc.
But it is up to HR specialists to hold their nerve in this ‘crisis’ situation and perhaps do what we do well in such times – look for the positive approach to getting through. In our HR policy and practice we can learn from the way the Chinese take that word for ‘crisis’ to mean both danger and opportunity. For example, if we have to make someone’s role is redundant it is often the case those affected can be encouraged to make career moves they would not have made in the ordinary scheme of things. A friend of mine was a surveyor for a local estate agency and was starting to feel slightly jaded in his work, but his good working conditions and a growing young family meant that he could only dream of starting his own practice. Recent redundancy has been stressful but with his employer’s support he is now well on the way to a satisfying and rather more exciting life in self-employment, in spite of the credit crunch and the downturn in the estate agency and construction industries. His previous employers are pleased to give him work which inevitably still remains to be done, so retaining his skills and knowledge on a more flexible footing. For my friend, redundancy has been a way of providing life and career opportunities he could not otherwise have seriously considered.
When an organisation is forced to reduce costs due to a recession, the first thought is often making redundancies. But releasing talent through redundancies may not necessarily be the first or only step for employers. Considering alternatives has two major benefits. One is that you will not incur the risk to employee morale because of protracted uncertainty. Another is that there may be fewer skills shortages in the organisation when the economy does turn around, hence saving future costs for recruitment.
There appears to be a greater awareness in this recession that employers can buy time before making redundancies in order to safeguard their talent. If you are in this position, why not consider alternative actions to redundancies such as short-time, job-sharing and flexible working and better manage overtime and absence to make savings? You could also review the structure of benefits, assess salary and pay packages and juggle these by a ‘salary sacrifice’ in exchange for benefits such as pensions, deferred rewards, tax-free expenses, flexible benefits and cars.
In spite of the downturn, there are still vacancies (650,000 at the last count according to government statistics), so employers will still need to recruit core skills and knowledge in perpetually difficult-to-fill vacancies, not least because of demographic shortages of those in the younger age groups (see http://show.mappingworlds.com/ for an interesting view of demographics worldwide). One important point, if still recruiting when making redundancies, let your workforce know that you may still need to recruit to key posts, even if you are making redundancies elsewhere. Strong leadership, particularly in HR, is vital in turbulent times and leaders need to focus on employer values and trust relations and lead with emotional intelligence. With an anticipation of more than two million unemployed in the UK, this means keeping your cool when in a cost-cutting crisis, sticking to your guns and communicating with major stakeholders honestly and frequently.
You might want to ensure that any changes you have to make to certain parts of your workforce are not having a detrimental affect on your employer branding value propositions – the promises you are making to intending applicants for open positions as well as to current employees. How an organisation sheds jobs in its workforce makes the difference between good and poor employer image and this can impact on your employer branding. Professor Graeme Martin from the University of Glasgow picks up the importance of employer branding in his blog when he says ‘employer branding is not just, or even mainly, about attracting new talent, but is also about engaging, motivating and retaining existing talent. .. Most of the good evidence on engagement suggests that organizations in general are not getting any better at this, despite the enormous investment in ever more sophisticated HR techniques.’ Check out Graeme’s other blog postings on http://graememartinshrblog.blogspot.com/ .
Try and maintain your attention on any talent management initiatives you are planning and look after your carefully-nurtured talent pools. A talent pool describes a collective of employees who have been identified as talented. In research conducted for the CIPD on talent management by academics from Nottingham Business School (see CIPD report ‘Talent: Strategy, management, measurement’ at www.cipd.co.uk ), some of the case study organisations studied had a number of different talent pools, with labels such as ‘exceptional talent, rising stars, emerging leaders and local talent.’ They can take different forms, have different memberships and can be a tremendous asset for resourcing project work, secondments and internal recruitment. When you are releasing staff this extra resource can help reduce the strain.
Talent mobility will still be a feature of human resourcing for many organisations in spite of the downturn, but there is a need to take care that the new position does not mean that the transferred person is underemployed (doing a job which requires less knowledge, skills or competency than the person in the role can give). Talented people who are underemployed will be difficult to retain and will look elsewhere for work, even in a recession. They do have alternatives, for example changing from the private to the public sector.
This was evident at the latest talent management round table on ‘Talent Management in the Public Sector’ organised by our International Centre for Talent Management and Development at Nottingham Business School. Professor Lynette Harris presented an analysis of the differences between the public and private sector talent management issues and Chris Last, the Director General of HR for the Department of Works and Pensions (100,000 employees), told the fifty attending the free event that the civil service was recruiting to cope with the downturn. There is a current requirement for an extra 60 HR specialists so if you are seeking a new challenge go to http://hr.civilservice.gov.uk/civil_service/
( We are holding our next round table on Friday 13th March, 2009, sponsored by the ESRC and CIPD on ‘International Talent Management in Turbulent Times’ and supported by Nigel Minton, head of global HR IS, Rolls-Royce plc. Presentations will cover topics such as a strengths-based approach to talent, tacit knowledge and talent in the international domain and the challenges of global HR information systems development in enterprise-wide projects. Contact Victoria.email@example.com for your free place, with lunch provided).
The key aspect of coping in a downturn is to listen and consult before coming up with an HR/talent management strategy and then communicating it. If you then get it wrong, admit it and change your strategy. Work closely with any representatives of unions and staff bodies as there is a need for collaboration to survive the downturn.
One dangerous aspect of tough times is a need for staff at all levels to work harder, doing longer hours in trying circumstances. Stress and lack of well-being are issues in the care and retention of staff. Take care of your line managers in all of this who are often said to be ‘between a rock and a hard place’ when the pressure is on. They will be under extreme pressure to cut costs but maintain quality provision of goods and/or services and perhaps release their talent in order to provide challenging ‘stretch’ projects for their own and the organisation’s growth and development. And finally, also remember to take care of yourselves. The annual CIPD/Croner Personnel Rewards survey found almost three quarters of HR people now work 40 hours a week or more compared with 62% last year. This means that HR people must be cognisant of looking after their own health, for without you the organisation would be in dire straits indeed.