How HR Can Help Overcome Post-Crisis Financial Slump
The Coronavirus pandemic has undoubtedly taken a toll on businesses all over the world. The IMF has a forecast of 3% decline in the global economy in 2020 in contrast to the 2.3% GDP growth in 2019. There are several HR measures to reduce post-crisis costs that professionals can take to ensure business continuity even after the crisis. These decisions taken during these pivotal times will directly influence the recovery and the future direction of the company.
The COVID-19 crisis has generated several added responsibilities, and costs for companies, for which resources are not always available. This predicament can be solved through postponing increments, bonuses and promotions and in addition, redeploying and re-skilling the workforce to counter the economic burden. Internal mobility can ensure that the company values are preserved, reduce recruitment and on-boarding expenses, and improve pre-existing employees’ abilities and skills. This may simply be achieved by conducting a “talent mapping” of the staff to determine the potential success-rate of transferring and allocating tasks to junior/external recruits. Talent mapping is a method that analyses the capabilities and capacities of employees, evaluates their output and potential and finally matches them with the needs and necessities of the company.
Moreover, this crisis has shown the inelasticity of previous compensation plans – and the necessity of its re-modelling in more ways than one. A temporary solution for the HR could be to have a higher variable pay and lower fixed cost scheme. This financial variable compensation can be tied to identifiers like efficiency and output. Not only will this allow for a lower budget, but also foster healthy competitiveness in the workplace, which has clear impact on employee motivation and productivity.
Lastly, it is essential to come up with a long-term HR scheme in case of other crisis situations whether it is a natural disaster or the predicted “second-wave” of COVID-19. Although several firms had previously designed contingency plans, many were not updated or well made. This plan should include alternate communication, salary, recruitment, and orientation actions, and the digitization of all components.
The workforce remains the most invaluable asset to any business, as it “makes or breaks” the company’s recuperation. Rather than considering harsh measures like furlough leaves, retrenchment, layoffs, or holding pay of employees to battle the financial cost of the crisis, businesses can instead effectively implement HR Measures to reduce post-Crisis costs. Consequently, this ascertains the workforce that the company is there to help through a crisis, which improves their solidarity, loyalty and productivity.
- How HR can get ahead of a potential recession, HRExecutive.