Management in a Recession – HR Policies for the Long Term
Recessions are tough; and tough times such as these warrant action on the part of management to keep its business ticking. However, not all action taken during the course of an economic recession would merit mention in the books of sound management practices. Downsizing, or what is now being termed “Right Sizing” is one trend that has caught up as being the remedy of first choice when organisations run into rough weathers. But how sound a management practice it is to take the job of cutting jobs too seriously is worth a debate.
When businesses do not perform to their potentials, managements tend to either do away with thousands of jobs straight away or they may choose to replace full time positions with other flexible work practices such as flexi-working hours or part-time positions. In boom times when the economy is in an expansion mode, managers may be tempted to bet on the higher side, taking risks to exploit the opportunity. Big balance sheet firms have the cash cushion that they have built over the years, which they could bank on to deliver at the nick of time, as they make a splash to garner market share.
Firms that are not among the blue chips, however, need to show caution and restraint in their appetite for risk and not be lured by the opportunity that presents itself in boom time. This is where strategy sometimes goes off track, when boom suddenly gives way to a bust that is deprived of all its charm. And businesses invariably find themselves saddled with human resources that may no longer be productive in the near future and may actually be a drag on their bottom lines.
While shedding jobs may make economic sense in the near term, organisations may sometimes get so addicted with the gains that are derived out of unconventional HR policies that they may fail to note the sharp drops in productivity that part-timers bring along. Years of experience are lost with people who are laid off across the board and the newbie employees would neither have the skills nor the commitment to make a difference to the organisation’s service and customer satisfaction levels. The concept of “Just-in-Time” labour that outsourcing brings forth is more of a temporary patch on what needs to be dealt with in the long term.
Sound Human Resource Management policies bestow a lot of benefits in productivity through intangible factors such as organisational commitment, motivational levels and employee satisfaction achieved through years of consistent policies. Short term remedies do not deliver that magic.
