HR Chiefs, Too, Are Doing More With Less These Days

By Ed Frauenheim

May. 18, 2009

For many human resources executives, today’s hard times translate into tough days at the office.

Top HR officials are being asked to oversee major cost-cutting—in many cases, layoffs. At the same time, they need to plan for future talent needs of their organizations. And often they face these twin challenges with a downsized department of their own.

“When you’ve got a fire, you can’t ignore the fire. You’ve got to put it out,” says Fred Foulkes, director of the Human Resources Policy Institute at the Boston University School of Management. “But you’ve also got to think about the long term.”

Not all HR executives are in that position. Cynthia McCague of Coca-Cola and Rich Floersch of McDonald’s serve companies that are doing decent business in the recession. But many top people leaders are like Sid Banwart, chief HR officer of heavy equipment maker Caterpillar. His company has announced a workforce reduction of about 23,000 people, a figure that includes flexible workers such as contract employees. Banwart says the trick now is not to see the situation as a trade-off between today and tomorrow.

“This is a time when we emphasize the power of the ‘and,’ ” Banwart says. “We must deal with the current reality and maintain the ability of the company to grow following the downturn.”

He says Caterpillar is continuing efforts to develop future managers. Between now and 2020, Banwart expects the company to need thousands of new leaders. He’s also hoping to continue a seven-year streak of improved employee engagement despite the layoffs and a bleak near-term outlook.

As if such juggling weren’t hard enough, HR leaders also are being asked to wrestle with new government rules, Foulkes notes. Among them are a set of executive compensation restrictions related to the Troubled Asset Relief Program and card-check legislation that would make unionization easier. In addition, the stimulus package approved earlier this year demands new COBRA policies from organizations.

Add it all up and HR execs have their work cut out for them.

“It’s a really challenging job these days,” Foulkes says. “There’s a lot of issues at the top of the organization, there’s a lot of issues at the bottom, and a lot of issues in between.”

Ed Frauenheim is a former Associate Editorial Director at Human Capital Media and currently works as Senior Director of Content at Great Place to Work. He is a co-author of A Great Place to Work For All.

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