Six Good Things That Happen to HR Pros During Recessions

By Kris Dunn

May. 1, 2008

Economics quiz time! Sponsored by Workforce Management and the HR Capitalist, this ultra-compact quiz is designed to sharpen your skills as you seek to blend HR theory with economic reality.

    To check your expertise, answer the two questions below and score accordingly:

    1. I know the U.S. is in a recession when:

  1. Two-year bonds are yielding more than 10-year bonds.
  2. I have employee spouses calling me to inquire why their 401(k) balance is down 10 percent for the quarter, even though they are 100 percent invested in funds labeled “uber-aggressive.”
  3. Individual companies are announcing the layoff of thousands of HR pros.
  4. Our mailroom professional has hidden the FedEx envelopes and is asking us to consider stacking as an alternative to “wasteful stapling.”

    2. When times get tight, my company:

  1. Starts to tighten up discretionary travel.
  2. Sets the thermostats to hot in the summer and cold in the winter.
  3. Seeks to deliver e-mail “on the hour” instead of instantaneously.
  4. Puts new budgeted positions not only in a freeze, but a freeze north of the Arctic Circle—in a sector where the ice hasn’t melted.

    Score your answers: All of them are correct, but if you answered “D” to both, congratulations! You’re just jaded enough to lead your company through any economic downturn, but you’ll do it with the humor and style appreciated by employees at large as well as the finance department.

    Shine on, you crazy diamond.

    Seriously though, my HR brethren, did you hear the news? Home Depot just threw a fastball at your head, announcing the layoff of more than 1,000 HR professionals. When’s the last time you heard of a triple-digit HR layoff, much less one that rang up more than a thousand displaced human capitalists?

    The simple answer is, you haven’t—which should give you pause.

    There is good news and bad news related to the role of the HR manager/director during an economic slowdown.

    Let’s get the bad news out of the way first. If your company has to cut headcount, you’ll more than likely be front and center in delivering the news. That’s a tough spot, and most of us have been there. On the plus side, you likely have the best skill set to handle this task in a way that treats employees with what they deserve—class and respect.

    Now, let’s focus on the good news. There’s an opportunity in every crisis, and this one is no different. You just have to squint to see it.

    With that in mind, here’s my list of Six Good Things That Happen to HR Pros During Recessions:

  1. Voluntary turnover goes down: It’s a fact that during recessions, fewer jobs are available. It doesn’t take a Harvard MBA to determine that means fewer companies will be actively stalking your talent, which means reduced voluntary churn across your employee base. With unemployment levels in the low single digits for the past couple of years, lower turnover is going to feel like a vacation. The tricky part of this for HR pros is that you can’t sit still. You’ve got to use the time to build your skills and add value in other areas.
  2. The progressive HR pros get to show off their business skills: With recessions come pressure on all costs. When the call to look at expenses invariably comes, you get a great opportunity to flex your business mind. Need a reduction in total benefit costs? The normal businessperson is going to automatically raise employee contributions, co-pays and deductibles. But you understand how employees value the different components of your total benefit package. That means you understand best which cuts are most tolerable to the masses, which helps you manage retention and employee satisfaction.

    That doesn’t mean you won’t be involved in tough decisions. You probably will. But it’s a great opportunity to show your team that you can weave hard numbers with the fuzzier elements of human capital.
  3. Strong talent is available for less: Nothing is a bigger constant in recessions than big companies doing “across the board” job cuts, shuttering entire divisions, departments and locations as a matter of efficiency. That approach means they can’t discriminate between the high performers and the “performance-challenged” who are affected by the layoff. In addition, even though voluntary turnover is down, fear is rampant. Your opportunity is to match the best talent that’s been affected by layoffs with the opportunities available in your organization. You can also work passive channels to find high performers who are employed, but are available for the right opportunity.
  4. You can focus on building, not reacting: If recruiting is 30 percent of your job, and vacancies are down 50 percent in your company, what are you going to do with the hours of the workweek that you just got back? If you said “chill,” this article’s probably not for you. The smart HR pros invest the time in activities that will help them when the economy picks back up—manager training, process improvement (ugh), a focus on performance management … anything that will make your practice become more streamlined and run smoother once the economy picks up and you are again strapped for time. Focus on activities that improve things rather than finding transactions to keep you busy.
  5. There’s no better time to start a focus on retention: Retention programs can mean a lot of things to a lot of people. Included in the definition can be enhancing communication, rewards and recognition, employee satisfaction initiatives and total compensation programs, to name a few. Whatever your flavor, an economic slowdown is a great time to get started. It’s the perfect opportunity to pop onto the employee radar: You’ve got a little extra time, voluntary turnover is down and the masses might be a little nervous. Then you and the company show up to show that you care. Good call.
  6. You get a little “you time”: Notice I didn’t say “relaxation,” “downtime” or “chill.” If you have the extra time, you’ve got to reinvest it in yourself and your career. What that means to you is an individual call. What benefits your career most? Certification, a degree program or starting a blog could all be a fit, based on where you are at in your career. Get started today. Don’t look back three years from now and play the “would have, should have” game.

    So what did we learn today? HR people can understand economics, I’m shopping at Lowe’s, and there’s a silver lining to every cloud, even a recession.

    And you are just the person to lead your company through it.

Kris Dunn, the chief human resources officer at Kinetix, is a Workforce contributing editor.

Schedule, engage, and pay your staff in one system with