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Challenges of HRM in global recession

Paper Type: Free Essay Subject: Business
Wordcount: 1308 words Published: 1st Jan 2015

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In today’s amphitheatre we come across the most common word, recession and downturn. The crisis or recession is the part of a normal life cycle of a business. It’s sure that they will occur earlier or later. Therefore, it makes sense to plan for downturns or recession as it prepares to plans for growth, economic times. The employees and management people might get experience nervousness about a number of issues at the time of economic downturn or crisis. During this recession era HR play a vital role to sustain in the industry and the total economy flourish. This paper explains the challenges of the human resource management in the global recession situation.

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What can HR do?

During the downturn the HR needs to be taking the initiative and come up with early involvements as for as any organization to survive. The Human Resources Manager has to retain its smart working people in the company. In the downturn, most of the HR people at times take the cruel decision of dropping the number of employees and land up at reducing.

Downsizing process

v Employees leave structure revised.

v Reduction of pay scale on various factors.

v Emotional fears for employee in engagement.

v Finding the additional non-value resources and activities

When the going is threatening, it’s compulsory for HR managements to encounter the challenges and the only preparation is not simply downsizing, though downsizing in a distinguished way.

Be creative

In the time of recession new ideas are implementing to change HRM processes and procedures. This has to done in the way that it should cut costs and motivates employee. HRM can mainly focus on the following things i.e.

How to raise productivity and efficiency in the business sector?

How to cut down the benefits costs?

Restructuring compensation structure?

How to develop and maintain high potentials?

How to decrease the employee costs to obviate retrenchment?

During the downturn time, the companies will understand the importance of having the good workforce, which reduces the cost of training. The decision taken by any organization affects the individual employee and the rumours float around. The top management has to ensure that the communication channels kept open and pellucidity is maintained. The management has to communicate clearly to the employee, instead of hearing from the outsiders.

The organization has to keep the motivation levels well with the employee. They should provide adequate support and training in the process of developing management.

Setting the context

Human Resources Management function is implemented in many organizations by diverse functional heads individually. The most significant challenge at the time of recession is developing the Human Resource system to maintain, identify, develop and apply abilities across the organization to their complete capacities. An organization might state that they have a best system to find talents around the organization.

HR has a chance again to show their value creation role if only understand what should need to do now in a corporate. Corporate managers should follow some of the basic strategies i.e. minimize the cost in establishment and administrative, holding large reward payments and bonuses, retaining of top abilities should be highlighted by the HR managers to the management and also HR managers should network with their corresponding managers to identify the problems and try to solve the problem.


To pay substantial costs for workforce livings

Making a standard shift towards reality

A huge scale change in the systems of Human Resource

Fine-tuned for making a shift or equipped for the changes

Continue to outperform, outrival and remain leader

Present challenges of Human Resource management

Corporate restructuring

Sustaining the company’s growth and position

Changing demographic workforce

Experienced and multi skill workforce

Changing the attitude of workforce

New approaches in industrial relation

Society established business responsibility

Human Resources – Perspective

The most developing perspective of Human Resource is participating. Human Resources delivering system is processes into Human Resource enabling system and for achieving high altitudes of mutual commitments. The mutual commitments are rendering to the three tiered official framework at strategic, functional, and workplace levels.

Strategic level

Sympathetic business strategies

Top management significance commitment

Actual voice for Human Resource strategy building and governance

Functional level ( HR – policy)

Strategic role of HR during Recession

The recession is one of the best opportunities to step and contribute strategically by the HR professional’s. For example, in classical strategy by seeing the macroeconomic environment first and then only see at the micro environment that which affects to them and their competitor’s. Next, they establish the suitable strategic factors in which HR effects directly. Finally, they use tactics to reduce the effects in HR. The function of HRM is to bring new ideas, changes in HRM processes and to change or develop the procedures. These implementations have to be cheaper or it should cut the costs of the organisation. The HRM’s innovation is tranquil at the time of business growth, but in the time of recession it’s not good for innovative the HRM initiatives.

The HR management has to concentrate on unpopular innovations at the time of recession as their role is to save money during the recession time for an organisation. The senior management will expect to come with a support function for bring innovative ideas and solutions which leads to tougher organization, when the next growth period comes.

Some of the important points to focus by the HR management at the time of recession

· To enhance the manpower strength.

· To introduce new strategic initiatives for increasing the productivity and efficiency of an organization.

· To take more involvement in reward benefits.

· Reconstructing the training and development program.

· Make sure that the organization’s policies and handbook are up to date. Reminisce to review the annual compliance handbook of employee by an experienced professional which is recommended highly. Also, every employee having a copy of the employee handbook is not enough. They should read the handbook and understand the content. You should provide the employee handbook in their required languages so that they can easy read and understand the whole content.

· Alternative flexible and work scheduling can maximize the production and also price cut on overhead costs for an organization, by considering the DLSE (Division of Labor Standards Enforcement) rules.

· By cutting the pay, this may be option to consider in saving costs on recession. Is this a real option for an organization? How is the pay scales related to market? Are you ready to lose vital employees whose talents is required by other organization, this is because you selected to reduce their pay at this time? You should not cut the pay of employees unless a recovering strategy to re-adjust with the economic changes.

· Downsizing ensures that requires maintaining the inner documentation of an organization. As the responsibilities are changes and jobs are modified these must add to your job descriptions.


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