A PROJECT REPORT ON

IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION

SUBMITTED TO PROF. Nupur Sharma Center for Management Studies Ganpat University

SUBMITTED BY MBA (AGRIBUSINESS) SEM - II Vishvak Baxi 02

Batch (2010 2012)

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PREFACE
The practical training is a part of studies for the students of management. The practical training helps us to know the working problems of industries before we enter into any organization as an employee or executive. This will help the students to come out & exhibit by theoretical training. Under this practical training collect the information & prepare a report on importance of HR policy and there need in organization in recession time.

I am glad to present my report based on IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION

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ACKNOWLEDGEMENT

A Practical project is a golden opportunity for learning and self development. We consider our self very lucky and honored to have so many wonderful people lead us through in completion of this project.

My grateful thanks to Mr. Gurang Shah (HR Manager) who in spite of being extraordinarily busy with his duties, took time out to hear, guide and keep me on the correct path. I do not know where I would have been without him. A humble Thank you to Sir.

Prof. Nupur Sharma whose patience I have probably tested to the limit. She was always so involved in the entire process, shared her knowledge, and encouraged me to think. Thank you, Dear Madam.

Last but not the least there were so many who shared valuable information that helped in the successful completion of this project.

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ABSTRACT

The Topic of our Study is:

IMPORTANCE OF HUMAN RESOURCE ROLE DURING THE RECESSION

The objectives of our research are to determine the management of Human resources in the recession period at the corporate level, to identify factors which affect Human resources in one way or other, to determine ways to cope with it and managing it in the superior manner, to make a safe workplace from the point of view of the job-security during recession. The population for the subject study is the employees working in the Corporate.

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OBJECTIVE OF STUDY
The Objective of study is MANAGING HUMAN RESOURCES DURING THE RECESSION PERIOD

The objective of research is to determine ways by which Human Resources can be managed in the recession period, to know about the effects of recession, to determine the most sensitive HR functions with respect to recession. A careful review of these questions areas led to the development of the following specific research objectives: To determine the perception and views of the employees. To determine how HRM can play an important role in coping with recession. To identify effects recession has left on the employees.

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Table of Contents____________________________________
PREFAC ................................................................................................................I ACKNOWLEDGEMENT .................................................................................................................II ABSTRACT ................................................................................................................................III OBJECTIVE OF STUDY ..................................................................................................................V Introduction.................................................................................................................................01 Journalism Survey of Importance HR in Corporate.........................................02 HRM Roles in Recession..............................................................................................................10 Main HR Recession Initiatives ...........................................................................................................................12 HRM Priorities and Recession.....................................................................................................................................13 Recession and Employees career options .........................................................................................................16 Affected HR Processes by the Recession...............................................................................................................17 The HRM Recession Quick Wins should include the following actions............................................18 HRM Communication in Recession...........................................................................................................................19 Talent Management in Recession/Under Pressure.......................................................................................20 Recession and Recruitment..................21 Strategic Role of HR During Recession................................... ..............................................................................22 Role of HR During Recession......................................................................................................................25 HRM Innovations in Recession...................................................................................................26 Recommendation ....................................................................................................................28 Top ten bad HR Practices ...............................................................................................................29 Top ten bad HR Tips for Beating the recession .......................................................32

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INTODUCTION
Recessions are not sprints; they are endurance events. To find out how nonprofits are faring during the toughest recession in more than 30 years, in the surveying 100 nonprofit executives across the United States at six-month intervals since late 2008. As of October 2009, some 80 percent of our respondents had experienced funding cuts, and a full 93 percent said that they were feeling the effects of the downturn. Stuart Flagg, ninemsn Money August 2008 said, So far this year, the word ''recession'' has been bandied about with alarming regularity. In fact it's running a close second to ''inflation'' for the most overused and least understood financial term of 2008. So what is a recession? Technically, an economy is in recession if it experiences two consecutive quarters of negative growth. By negative growth, I mean shrinkage. That's the technical term, but the word itself has a wider meaning it generally refers to a downturn across a broad range of economic indicators like spending, business investment, a fall in demand and so on. However, a prolonged period of economic stagnation generally stops being referred to as a recession and becomes a depression. There is no official definition of recession, but there is general recognition that the term refers to a period of decline in economic activity. Very short periods of decline are not considered recessions. Most commentators and analysts use, as a practical definition of recession, two consecutive quarters of decline in a country's real (inflation adjusted) gross domestic product (GDP)the value of all goods and services a country produces. Most of us have an intuitive idea of what a recession entails - job losses, plant closures and tough times for families. But what exactly is a recession? There are a few similar, but not identical definitions. To learn what economists mean by a recession, Economists officially define a recession as two consecutive quarters of negative growth in gross domestic product (GDP). The National Bureau of Economic Research cites "a significant decline in economic activity spread across the economy, lasting more than a few months" as the hallmark of a recession. (Davis, 2008) According to The National Bureau of Economic Research (NBER), a recession is a downturn in a nation's economic activity. The consequences typically include increased unemployment, decreased consumer and business spending, and declining stock prices. The indications are all in places, even the leading companies stumble left and right from the overwhelming effects of the recession. Desperate measures are being seized apart from the layoffs, bailouts, mergers acquisition etc besides these measures; everyone should realize that it is as important to adjust in managing HR during recession. In fact, Human Resource Management plays an even superior role in difficult circumstances than during periods of growth and prosperity.

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JOURNALISM SURVEY OF IMPORTANCE HR IN CORPORATE

Officially define a recession as two consecutive quarters of negative growth in gross domestic product (GDP). The National Bureau of Economic Research cites "a significant decline in economic activity spread across the economy, lasting more than a few months" as the hallmark of a recession. Economic recessions are caused by a decline in GDP growth, which is itself caused by a slowdown in manufacturing orders, falling housing prices and sales, and a drop-off in business investment. The result of this slowdown is falling employment, and rising unemployment, which causes a slowdown in retail sales. This creates a downward spiral in manufacturing and increased layoffs. A stock market decline, known as a bear market, can either be a result of a recession but is often a cause itself. According to The National Bureau of Economic Research (NBER), a recession is a downturn in a nation's economic activity. The consequences typically include increased unemployment, decreased consumer and business spending, and declining stock prices. Recessions are typically shorter than the periods of economic expansion that they follow, but they can be quite severe even if brief. Recovery is slower from some recessions than from others. The reality in all organization is that the directors and board are in the position of highest influence and their primary responsibility is leadership. As such, considering the consequences of a recession such as we currently face is not the time for directors to abdicate their responsibilities it is time for governance leadership. The directors and the board must think and respond strategically. The recession can change the HRM priorities promptly, or at least, they have to be adjusted. The HRM can be asked to produce cost savings on current programs when the organization has no resources so that the new initiative can be added. The quick scan of the ongoing procedures and policies has to be made by the HRM to prepare for the termination/cancellation or change, when asked to make important cost cuts. The recession is about the cost cuts, planning, designing efficient cost-effective HR policies.5 There has to be an assessment of the HR priorities for selecting the processes and policies which have to be discontinued. Simple matrix is the least tool to be used in which the processes and procedures are divided according to their costs and the impact they have on the organization.

As recession takes a choke hold on the economy, you might find that there are fewer new customers walking through the doors of your business. Your existing customers may also seem to have shut their wallets tightly as they also try to control their rising expenses. If your small business that has a mortgage loan on it, then you could be in
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deep trouble. This is because lenders have been steadily hiking their interest rates in a bid to cover their losses due to other borrowers not being able to pay their monthly installments. If your current mortgage is about to end, then you could find that there are no lenders available who are willing to provide you with a new mortgage at low interest rates. This could put enormous pressure on you, as you would be forced to decide on which loans to clear off first - all on a steadily-decreasing income. The first casualty during any recession is usually sales. Once sales are down, then it usually isnt long before profits could follow the southward trend. If in the past your sales have been excellent, and if you can afford to take a little downward trend in sales in stride then dont worry; but if you really need to increase sales even at the cost of incurring additional expenses, then there are two ways to achieve this. One is to lower profits in an attempt to achieve higher sales figures. The other way would be to spend more on marketing and advertising while keeping your profit margins unchanged. This will still lower your profit figures due to an increase in your marketing expenses. However, this move would not only increase your presence in the market but you could be the first to reap the benefits as soon as the economy emerges from the recession. A recession accompanied by high inflation will mean that your monthly expenses could increase, even as you face the daunting task of maintaining your profits. This could eat into your savings and pose financial problems as the days go by. You can reduce your expenses by cutting down or splitting them. Unnecessary expenses should be totally avoided - and only those expenses related to your business should be attended to on a priority basis. The indications are all in places, even the leading companies stumble left and right from the overwhelming effects of the recession. Desperate measures are being seized apart from the layoffs, bailouts, mergers acquisition etc besides these measures; everyone should realize that it is as important to adjust in managing HR during recession. In fact, Human Resource Management plays an even superior role in difficult circumstances than during periods of growth and prosperity. Priorities of the organization get changes by the recession. HR strategy and priorities should reflect the changes in the organizations precedence. The Human Resource Management cannot live on its own; it has to chase the general business strategy.

Generally, the processes and procedures which have the maximum cost and minimum impact on the organization should be terminated by the HRM. As the termination of some of the policies Can be very for employees, the HRM has be very cautious. These are those processes which have highest impact. A quick response has to be made by the HRM to changedconditions emerged by the termination of the least important procedures and policies as
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the recession changes the HRM priorities, but the HR strategy needs to have a constant or steady approach throughout the recession period. In the recession, the HRM priorities has to be changed by the HRM in a very sensitive way, so that the employees feel some consistency and security and they do not lose trust in the victory of the organization in the war against recession. It is important her to understand also that the recession does not mean at all to change or terminate everything; the change in the HRM priorities should not touch the corporate culture during the whole recession period. Different HR processes get affected by the Recession. It can affect some HR processes very badly and at the same time, some other processes can be completely immune from its impact. The reaction of the HRM has to be very fast and the whole HRM team has to be included in it, as all employees have to help other employees who have got affected badly in order to the level of satisfaction intact. The organization has a need of saving cost to discover and potential added source for the cost effectiveness and start of new era of growth. A new HRM vision and HR strategy has to be prepared for the approaching period as the cost cutting is not the ultimate way to built a strong enough organization fighting against the recession. The most affected HR processes are: Recruitment is a first of HR processes which gets affected and changed in the recession. The jobs vacancies are terminated and HRM has to arrive with the new recruitment strategy. A new set of skills and competencies can be hired to strengthen the market position organization. Global Hunt says that "recession is not the end of the road for recruitment firms but it actually has given us a Picture that what kind of profiles floating in the market. Eventually, one can say that go in the market but with utmost care. Training; as its an instant cost-cut, the trainings are cancelled. The organization can focus later on the more specialized training sessions and can introduce more internal training courses. Compensation and benefits is another affected HR process. The HRM can ask the department to come up with new compensation schemes, which will be cost-effective and will serve as a motivator for employees to be more proactive. One of the most affected HR processes by the recession is Recruitment. Vacancies are not offered by the companies and the job applicants number increases rapidly and recruitment process has to be managed smartly. The organization has to make a change into focus of the recruitment and the recession is the opportunity to focus on the redesign and the development of the recruitment process. The recession is related to the organizations focus on the strategic initiative in order to make the stable income of the organization and the future growth. Usually, the organization does not stop recruitment completely and some new job opening can come into view. The HRM should be asked to make a swift SWOT analysis of the employees in the organization in order to have an
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unambiguous view about the gaps in the skills and competencies. These gaps have to be filled by the organization with new and fresh employees from the job market who can bring more creativity into the organization with them and ready to work hard to save the organization. The top management has to tell the HRM for the approach through the crises so that it can decide about the needed skills for the victorious fight against the HRM for the approach through the crises, so that it can be decided about the needed skills for the victorious fight against the recession. Usually, the proposal is designed by the small team for the solution and recognition of the skills. A mix of current employees and new hires constitutes a team recommended by the HRM. In order to find a complete different set of skills and competencies, the recruitment team has to be prepared. The focus of the organization can be changed by the recession and the new employees play an important role to secure the organization in the recession time. As the most immediate effect of the recession is on the recruitment, the recruitment-freeze is a common solution in the start of the recession. Usually, for the depth of the recession, the organization is unprepared and the recruitment-freeze seems to be a quite usual solution. For the organization, the recruitment freeze sounds a good solution, but lots of issues brought by it, for the smooth operation of the organization, the complete recruitmentfreeze can be a big danger and the organization is in need of exceptions to be done. From the beginning, the recruitment-freeze has to be done smartly. The majority managers need to trust the HRM. Rules will apply on all the requests. Basically, the recruitment-freeze is related to have faith in the top management and the HRM that the expectations and requests from all the managers will be managed and evaluated fairly. The recruitment freeze is an opportunity to make organization slimmer. But for this, good decision is made by the top management and the HRM. Companies have started realizing that HR recruitment, selection, retention etc., is quite a cumbersome process calling for high amount of time and resources and inflicting cost. Thus, they are warming up to the idea of outsourcing HR function to offshore firms. Multinational companies are saving millions of dollars by outsourcing HR. Advantages associated with outsourcing the HR departments include: Great Reduction in Costs:

HR outsourcing (HRO) converts fixed cost to variable cost and can produce quality performance in low cost. Companies have started realizing that off shoring HR department to low-cost areas will help in reducing cost while maintaining the quality of performance. Gradually, offshore outsourcing firm becomes an inbuilt function of the
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organization and the combined effect of their partnership further strengthens the process of the company. Simple Global Models:

Outsourcing takes HR functions to a global scale. With entrance of global service providers in the market competition has become tough; however the service delivery model has become mature and highly satisfactory for global clients. Outsourcing helps in moving HR executives from local role to global. Few advantages of global engagements for HR are: 1. Expertise: HR Managers of varied expertise from all over the globe improves the recruitment process. 2. Cost Effective: As stated earlier, hiring HR personnel from low-cost countries helps in providing same or better service at lower price.

3. Workplace diversity: Globally functioning HR brings employees from across the globe and makes the work environment culturally more diverse. In a tough competitive global market, the benefits of global HR model are too valuable for a company to miss. Best of Breed Solutions:

With outsourcing talent hunt has become broad spectrum. Now finding the desired candidate satisfying all selection criteria is not the main area of focus, instead, best-ofbread approach is taken to find the leaders in the field. Risk lessening:

Many a times companies faces crisis due to sudden loss of the key HR person. A tight labor market delays finding a suitable replacement. Hiring and training a new person for knowledge transfer becomes difficult and costly in recession. An outsourced HR engagement helps to almost terminate these problems. In HRO, hiring new replacements and training them are the responsibilities of the service provider, thus, ensuring a continued hassle-free service.

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Value Addition

Generally, in-house HR functions are primarily visualized as cost-centre; whereas, HRO models chiefly focus on strategies which would improve business and reduce cost. Unlike in-house HR personnel, outsourced HR team does not get caught up in internal issues and thus can concentrate on cost-reduction, talent acquisition, training and retention. This results in the following benefits: Increases process efficiency by concentrating on important issues. Increases flexibility of business and makes it more dynamic. Increases employee satisfaction and productivity. Increases the business network and help gain market access. Increases sales and business during recession. In the current volatile market the need to focus on core business activities has become an absolute necessity. To cater to core activities, companies are opting to outsource non-core process like Human Resource management. Like every process, outsourcing too has its own pros and cons. Few disadvantages of HR outsourcing are: It requires lots of coordination with the service provider. It reduces the scope of learning for an organization. It reduces the control over the support function thus affecting the integrity of the company. To minimize these disadvantages organizations has to understand their ultimate motive of outsourcing. A clear vision of goal and transferring only the functions and not responsibilities will certainly prove to be fruitful in smooth outsourcing of HR functions. This is no cakewalk and requires a great deal of knowledge, planning, skill and commitment. The recession usually does not attack the recruitment agencies. And to have a better relationship with recruitment agencies, the recession is a good time. These agencies are pushed by the recession to offer better conditions and the quality of job candidates catches the better level as well. The era of economic growth is the time for the recruitment agencies while the recession is the time for the companies. The willingness
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is shown by the recruitment agencies to re-negotiate the contracts in order to keep their and they are fighting for the job vacancies. But the recruitment process can be changed by the company as it pays fees to the agency, but asking more flexibility from the recruitment agency is the best option in the recession. For searching good potential In other companies, the recruitment agencies can be used as a weapon as they needs business to be on the roll, the best contacts can be found in the competitors on the job market and the good employees can be hired by the organization cheaply. Talent will never be affected by any kind of recession and to hire the top potentials from the market and competitors. To hire the top-class employees, the HRM has to act quickly before the actions are taken by their current employees for their protection. The managers and key employees of the organization should always be asked about excellent people in their knowledge on the job market. The list of candidates should be with HR recruiters to whom they can ask to join the organization. The talent can be made more sensitive by the recession to the job offers from the competitors as the talent is usually known in the industry. For the organization, the personnel expense does not increase due to the talent in the job market, but the new sources of revenue can be brought by them and the trust of the current employees can increase big time. The HRM is in the fast reaction to the recession, having good contacts with the recruitment agencies and making a proposal to the top management for the hiring of prospects to be started as soon as possible. For this, there has to be a co-operation between the HRM and the top management because from them, the talents in the job market need to know the clear plan and expectations. The clear expectations cannot be communicated but the HRM itself, but it can co-operate for the job positions with the middle management which they create for the top talents.

Personnel expenses added to the pay roll of the organization has to be monitored by the HRM as the agreed rules cannot be exceeded by the company and the close cooperation between HRM and the agencies is necessary to get the top-class employees from the market. The recession undoubtedly is a difficult time and the top talents from the market will definitely help organization to win the battle against the recession. The management of talent in the recession time is also very important. A small or minor mismanagement can dent the organization in the shape of losing the talent in this critical time. Since the talent is the best asset in the recession, this is necessary for the organization to mobilize the entire top potential in the company, so that the new and innovative solutions can be brought to fight with the recession. There is a huge pressure on the talent management in the recession period. The HRM has to leverage the resources of the organization. Each manager tries to protect the resources in the unit. A
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clear group of employees has to be defined by the talent management in order to be separated from their current units in finding a new successful way to the future. The top management has to give mandate to the HRM in the decision about the staffing of the special taskforce to define a new and bright future of the organization. In the times of economic growth, the talent management works nicely. In the recession, it gets under an enormous pressure from the time management and the top management as their interests is not aligned.

The survey of 600 small businesses to determine how the recession is affecting their outsourcing plans. The survey results showed that 41.9% said they planned to outsource more in the near future, either because theyve cut full-time staff (7.0%) or because theyre simply unable to hire full-time staff (34.9%). They are also outsourcing more functions than ever before 28.5% said they are now outsourcing something that they previously thought they couldnt. In light of such numbers, its hardly any surprise that 14.6% of them report that they have replaced employees with contractors in the last year, and 14.5% have hired a contractor who would have been otherwise unemployed or a victim of the economic downturn.

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HRM Roles in Recession

The recession is healthy, from time to time. The recession helps to stop the businesses, which are not bringing value added and the human capital is transferred to more vital businesses at lower costs. In the companies, which survive the recession, the HRM Role is very important. The recession is very dangerous for the companies. During the times, when the business grows dramatically, the HRM Function introduces different policies, which are focused on spending money. The company was able to carry all the costs and the employees started to take the policies as the standard. In time of the recession, the HRM Role is to make cost cuts and the HRM Function has to provide the list of the policies and the procedures to be cancelled or discontinued. The employees do not like it, but the company has to return to the healthy basis for the future growth. The HRM Function has to be able to identify the top potential in the organization quickly as the company needs to make the cuts in the human capital of the organization. The HRM Function needs to provide the tools to managers to inform their key employees about the security, the company wants to offer to key employees. The HRM Function is not a department to make employees happy, the role of HRM Function is also about the cuts in the costs of the organization and the HRM Functions role is about minimizing the damages to the organization. The recession can be a very interesting period for the HRM Function. The HRM Professionals can design, develop and implement a lot of new HRM Processes in the recession, which are simple and really efficient. But they need to have a clear vision of the HRM behavior in the recession to be really successful. The HRM Management has to define the HRM Vision for the Recession. The employees in Human Resources have to understand the goals for the difficult period of the recession. Many activities in the organization can be cancelled, but the HRM Employees have to understand the reasons. The HRM Vision for the Recession is needed for the employees of the HRM Function as they should serve the organization as the change agents. Many procedures, policies and processes can be cancelled during the recession or they can be strongly changed and the HRM Employees have to be able to explain the reasons for the change or cancellation of the policies.
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The HRM Management has to push the top management to define the vision of the organization for the recession as the roles in the organization can be clearly defined. The top management has to set the vision for the strategic initiatives as the whole organization can share the same goals. It is very painful for the top management to define such goals, but the employees and managers can support the painful way to prosperity, when they believe and trust their leaders. The HRM Function can serve as the navigator and facilitator for employees, but the HRM Vision for the recession has to be defined and clearly communicated and explained to HRM employees. The HRM Management has to communicate the full story as the HRM Employees have usually access to confidential information and they can build a good picture of the organizations health very quickly. The HRM Vision for the Recession should be about the trust and honesty. The HRM Employees have to understand the need to make changes and to make the cuts in the procedures they introduced and run for the organization. The HRM Management has to be proud to announce the cutting of job positions in the HRM Function and to explain the reasons for selecting the employees to be fired. The HRM Vision for the Recession can play a significant role in the success of the HRM Function in the recession. The HRM Management Team has to set it as a priority and the vision has to be transformed into actions quickly.

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Main HR Recession Initiatives

The HR Function has to conduct several HR Recession Initiatives as soon as the recession is recognized in the organization. The organization can grow rapidly, when the recession ruins companies around your organization. But, when the organization feels the pain from the recession, the HRM Function has to start several HR Recession Initiatives. The HR Recession Initiatives have to be focused on the analysis of the current situation and the unlocking the potential for the future growth. The HR Recession Initiatives are not just about the cost cutting, the recession initiatives have to be focused in more areas:

Cost Cutting Key Groups of Employees Process Efficiency Honest Information for Employees Management Consulting

The HR Recession Initiatives have to be balanced well. The cost cutting is about the immediate activities to decrease the personnel expenses of the organization, but the HR Recession Initiatives have to be focused on the future as well. The employees are told to be the best capital of the organization and the HR Recession Initiatives cannot be focused on the full destroy of the human capital of the organization. The employees to be fired have to be selected carefully and the rest of employees have to sure about the future of the organization. The organization has to guarantee the future for the most important employees the key employees, high potentials and the managers. The HRM Function has to focus on the honest communication in the recession. The HRM Function has to inform the employees fairly about the bonuses, salaries and number of employees in the organization in advance as the employees can prepare themselves. The HRM Function has to have a good balance in the HR Recession Initiatives. The employees and managers have to feel the fairness and transparency in the initiatives as they can build the trust to the HRM Function.

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HRM Priorities and Recession

The recession changes the priorities of the organization. The change of the organizations priorities should be reflected in the HRM Function priorities and HRM Strategy as well. The HRM Function cannot live alone; it has to follow the general business strategy. The HRM Priorities in the Recession can change quickly or they need to be adjusted at least. The organization has no resources to add to the new initiatives and the HRM Function can be asked to produce cost savings on current programs. The HRM Management has to make a quick scan of current procedures and policies to be prepared for the cancellation or change, when asked to make an urgent cost cut. The recession is about cost cuts and designing efficient, cheap HR Processes. The HR Priorities have to be assessed using a simple tool for selecting the processes and policies to be discontinued. The best tool is to use the simple matrix, which divides the processes and procedures according their costs and impact on the organization.

Generally, the HRM Function should cancel the processes and procedures with the highest costs and lowest impact on the organization. The HRM Function has to be very careful as cancellation of some policies can be very sensitive for employees. Those are the processes and procedures with the highest impact.
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The recession changes HRM Priorities. The HRM Function has to make a quick response to changed conditions by the cancellation of the least important procedures and policies, but the HRM Function has to change the HR Strategy to have a consistent approach during the whole recession period. The HRM Function has to adjust the HRM Priorities in the recession very sensitive way as the employees feel some security and consistency and that they can trust the organization and its success in the war with the recession. The HRM Function has to keep the role of the employee advocate and this should be reflected in the decision matrix as well. The recession is not a chance to change and cancel everything, the corporate culture should not be touched by the change of the HRM Priorities during the recession. The recession is about the creative Human Resources Management. The HRM Function is asked to bring new ideas, to change the HRM Processes and to develop or change the procedures. And this effort has to be cheap or it has to cut the costs of the organization. The HRM Innovation is easy in times of the business growth, but the recession is not good for big innovative HRM Initiatives. On the other hand, the top management understands the effort to innovate the HRM Processes better. The top management is in the search for the potential cost savings and they count every single penny brought by the line management. The HRM Costs are usually a very significant cost to the organization and the HRM Function has to be proactive. The HRM Function has to focus on unpopular innovations during the recession as the role of Human Resources during the recession is to save money to the organization. The top management expects all the support functions to bring innovative solutions, which will have to make the organization stronger, when the next growth era comes. The HRM Innovation during the recession has to focus on the following topics: 1. Reduce the number of employees in the organization 2. Strategic initiatives to increase the productivity and efficiency of the whole organization 3. Redesign of the compensation scheme 4. Cancellation of several benefit schemes 5. Training and Development Programs cutting

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On the other hand the HRM Function has to find innovative solutions for the following topics: 1. Identifying the real key employees and to keep them in the organization 2. Identifying the real top potentials and to strengthen their development program The second two topics have to be done with the minimum additional costs and it is a really hard task to accomplish. The HRM Function has to have priorities in mind and the strategic impact of the HRM Innovations in the recession time. The role of the HRM Function is not to cut the costs for the time being, but to make the organization stronger and ready for the future growth.

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Recession and Employees career options

The employees are the most important assets of the organization. In times of the recession, the employees have to be secure about their future and the organization should announce a clear plan to them. The HRM Function is responsible for the employees as their employee advocate and the change agent. The HRM Function has to be involved in all the communication plans, the communication toward employees. The recession brings a panic to the organization. The rumors about the recession and the layoffs spread quickly around the organization and the HRM Function has to monitor the emotions in the employee population. The rumors are the most important danger for the successful survival of the recession. When the employees start to speak about the recession, the key employees and top talents can leave the organization within several weeks, as they feel no future in the organization. The role of the HRM Function in Recession for the employees is being their real advocate. The HRM Function should prepare the proper communication and it should manage to get the buy in from the top management. The employees feel the danger from the recession, the top management has to inform all the employees honestly about the outlook for the organization and it has to provide them with the vision to follow.

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Affected HR Processes by the Recession

The recession affects different HRM Processes. Some HR Processes can be affected by the recession very hardly and other processes can be completely immune from the recession impact. The HRM Function has to react very quickly and the response has to include the whole HRM team as all employees have to help the most affected employees to keep the level of the satisfaction. The organization needs to save the costs and it needs to identify and potential additional source for the cost saving and starting a new growth era. The HRM Function has to prepare a new HRM Vision and a new HR Strategy for the coming period as the cost cutting is not the only way to build a stronger organization fighting with the recession. The most affected HR Processes are the following: 1. Recruitment - The first HR Process with the change in the recession. The job vacancies are cancelled and the HRM Function should come with a new recruitment strategy. The organization can hire a new set of skills and competencies to strengthen the position of the organization on the market 2. Training The training are cancelled as it is a quick cost cut. The training can be later focused on more specialized training session and more internal training courses can be introduced. 3. Compensation and Benefits The department can be asked to bring a new compensation scheme, which will save the costs and motivate employees to be more proactive. 4. HR Front Office The HR Front Office have to be present at clients all the time as they will need a strong guidance and facilitation during the recession. The HR Processes are heavily affected by the recession, but the HRM Function has to take this as the opportunity to change and to bring new ideas on the scene. The recession is the best time to design a completely new approach of the organization to its human capital. The HRM Function should be ready for the recession, which comes from time to time. The HRM Function should be always very careful about the costs added to the organization as cost cutting always hurt. The HRM Function has always to predict, the recession will come and the nice initiatives can be then very painful initiatives. The HRM Function has to prepare the HRM Recession Quick Wins.

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The HRM Recession Quick Wins should include the following actions
1. Stop and prioritize the recruitment process. The vacancies should be cancelled and all the vacancies should be strategically re-shifted. The organization can need a completely different set of jobs to survive the recession. Why the continuing recruitment process should make the situation even worse? 2. The FTEs in the organization has to be evaluated. The number of FTEs can be fine, but the structure has to be reviewed. There is no company in the world, which cannot decrease the number of FTEs. The HRM Function has to offer the methodology for the FTEs review and the HRM Function has to act as the facilitator in the process of the FTEs review. 3. The bonus schemes have to be reviewed. The bonus scheme can support the organization in the time of the strong growth, but it can de-motivate employees in time of the recession. The HRM Function has to prepare a good analysis of the bonus scheme performance and its impact on the motivation of employees. The HRM Function can propose additional changes to the bonus scheme to provide the employees with some kind of the stability. 4. The talents have to move around the organization to play their strategic role in the change of the organization during the recession. The organization needs to awake its creativity and the shift of the talents can help a lot. The HRM Recession Quick Wins are not hard, but they need a lot of courage from the HRM Function. The HRM Function has to reflect itself and it has to be proud to say, it made some mistakes in the past. The recession is always about the restart and the HRM Function needs to restart its processes quickly at the beginning of the recession.

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HRM Communication in Recession

The HRM Function is always responsible for the mass communication to employees in the recession. The HRM Function should be responsible for the consistency, transparency and fairness of the crisis communication to employees. The recession is usually not about the good news, but the HRM Function has to be the employee advocate and the messages should provide the employees with the clear outlook of the future. The crisis and recession communication have to be targeted, as not all the employees should receive the same amount of the information. The Sales employees should have completely different details from the Operations guys. The HRM Communication in the Recession is about defined and agreed target groups. The organization cannot publish the details about its business position to all the employees, but some groups of employees have to know more to feel comfortable and more secure.

The HRM Communication is one of the strongest tools for the retention of key groups of employees. The talents and key employees have to receive more information from the organization to keep their own security and their value for the organization.The organization needs to raise the level of the motivation and the honest communication is one of the best tools for motivation. But the HRM Function has to act as the consultant to make sure, the employees are not de-motivated and frustrated by the amount of messages and the details provided. The HRM Function has to provide the advice on the communication channels used as not all the messages should be sent via email. The HRM Function is the only function in the organization to have a general picture of the target groups and it can provide useful consultancy in the description of the target communication groups. The HRM Communication in Recession is about a clear description of the organizations position on the market, the economic outlook for the next period and about the strategic products and services, which will be the leading the growth in the era after the recession. The employees should know about these topics as they can prepare themselves.

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Talent Management in Recession

The talents are the best assets in the recession, as the organization needs to mobilize the entire top potential in the company to bring new and innovative solutions to fight with the recession. The talent management is under a huge pressure in the recession. Each manager tries to protect the resources in the unit and the HRM Function has to leverage the resources of the organization. The talent management has to define a clear group of employees to be separated from their current units in the finding a new successful way to the future. The HRM Function has to have a mandate from the top management in the decision about the staffing of the special task force to define a new and bright future of the organization .

Talent Management under Pressure

The talent management works nice in the time of the economic growth. In the recession, the talent management gets under a huge pressure from the line management and the top management, as their interests are not aligned, at least fully. The HRM Function has to be able to mobilize all the talents across the whole organization and the line management can be fully confused by such an activity. The top management can have a nice plan to use the top talents of the organization to have a new opportunity to win the war with the recession, but the line management likes to have the talents in their units to have the smooth operations certainty. The talents usually like the challenges and the recession is the challenge for them. The HRM Function has to find the plan to allow the top potentials to be freed from their current units and to propose a good plan to the line management to keep their satisfaction and buy-in. The talent management is usually set as the long-term activity of the HRM Function. The recession makes the whole talent management a lot quicker. The talents have to be set to new teams, they have to learn to co-operate quickly and they have to learn to make quick decisions. The talent management in the recession is about the quick assessment of the top talents of the organization and assigning them to the special tasks from the top management. The role of the line management has to be minimized as they have no chance to prefer their own task above the strategic tasks of the top management.
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Recession and Recruitment

Recruitment is one of the most affected HR Processes by the global recession on the market. The companies do not offer vacancies, the number of job applicants grows rapidly and the organization has to manage the recruitment smartly. The organization has to change the focus of the recruitment and the recession is a good moment to focus on the recruitment process development and redesign.

The Talents on the job market

The recession is a good moment to hire the top potentials from the job market and other competitors. The HRM Function has to act quickly to hire the best class employees before their current employers take the action to protect them. The HR Recruiters should always ask the managers and key employees of the organization about the excellent people, they know on the job market. The HR Recruiters should have a list of the job candidates, who can be asked to join the organization. The talents are usually known in the industry and the recession can make them to be more sensitive to the job offers from the competitors. When the organization has a clear plan for the fight with the recession. The talents from the job market do increase the personnel expenses of the organization, but they can bring new sources of the revenue and they hugely increase the trust of the existing customers. The role of the HRM Function is in the quick reaction to the recession, making the proposal to the top management and having a good contact with the recruitment agencies to start the hiring process as soon as possible. The HRM Function has to co-operate closely with the top management, as the talents from the job market need to know the clear plan and clear expectations from them. The HRM Function cannot communicate the clear expectations itself, but it can co-operate with the middle management of the job positions, which can be created for the top talents from the job market. The HRM Function has to monitor the personnel expenses added to the payroll of the organization as the company does not exceed the agreed rules and the HRM Function has to co-operate closely with the recruitment agencies to get the best class employees from the job market. The recession is a tough time and the top talents from the job market will definitely help to win the battle on the market.

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STRATEGIC ROLE OF HR DURING RECESSION

The recession is an opportunity for HR professionals to step and contribute strategically. In the classicalstrategy paradigm, we begin by looking at the macro economic environment. Then we look at the micro-environment - what affects us and our competitors. Next, we establish which strategic factors HR influences directly. Finally, we drop down to our tacticsThe recession is about the creative Human Resources Management. The HRM Function is asked to bring new ideas, to change the HRM Processes and to develop or change the procedures. And this effort has to be cheap or it has to cut the costs of the organization. The HRM Innovation is easy in times of the business growth, but the recession is not good for big innovative HRM Initiatives. The HR Management has to focus on unpopular innovations during the recession as the role of HR during the recession is to save money to the organization. The senior management expects all the support functions to bring innovative ideas and solutions which will lead to stronger organization, when the next growth era comes. The point has to be focused by HR management during recession are as follows:

To optimize the manpower strength. To take strategic initiatives to increase the productivity and efficiency of the entire organization. To work on compensation benefits. Redesign training and development programs. Ensure your organizations policies and handbooks are up to date. Remember that an annual review of your employee handbook for compliance by an experienced professional is highly recommended. Also, each employee having a copy of the employee handbook is not enough. They have to be able to read and understand the content. Be sure that you provide employees a handbook in a language they can read and understand. Layoffs are never easy. Ensure you are familiar with your legal responsibilities in a lay off to minimize your organization's risk. Be sure that you have properly defined the criteria you are using to determine who will be let go. Alternative Workweek Schedules and Flexible Scheduling can maximize production and cut-back on overhead costs for organizations. Be sure you follow all of the DLSE rules when deciding if an Alternative Workweek Schedule or Flexible Scheduling is right for your organization. Cutting Pay may be an option to consider saving on todays costs. Is this really an option for your organization? How are you pay scales as related to the market? Are you willing to risk losing key employees whose talents may be needed by other organizations, because you chose to reduce their pay at this
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time? Remember, you should not cut pay without a recovering strategy of how you will re-adjust when the economy has turned. Downsizing does require internal document maintenance for your organization. As jobs are modified and responsibilities are increased changes also must be made to your job descriptions. On the other hand the HR Management has to find some innovative solutions during the recession like, To identify the real key employees and to intact them in the organization To identify the real top potentials and to strengthen their development program

The HR Management has to have priorities in mind and the strategic impact of the HRM Innovations in the recession time. The role of the HR Management is not to minimize the costs for the time being, but to make the organization stronger and ready for the future growth. Recommendations while your employer facing negative challenges during recession: 1. Top management should know the contingency plan. 2. Do the brainstorming session with your top management and contribute in their strategic planning. 3. A complete or partial job freeze, however, communicate to the workforce that the company many continue to recruit key individuals even in difficult times 4. Review the employee performance evaluations to determine the key people that company cannot afford to lose. 5. Flow of Communicate should be from top to down that will help in making conducive atmosphere within the organization 6. Make prepare yourself for individual and group concerns therefore there should be a proper counseling session. 7. To maintain a calm atmosphere 8. Review all HR policies, processes and procedures to ensure that they are purposeful and contribute directly to the success of the company. 9. Suppose the company has to lay-off staffs ensure that there are no other opportunities for them in other functions or divisions of the organization.
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10. Advise managers to deal the process of managing change. Managing Human Resources (HR) in a difficult economic environment is even more demanding than working in times of rapid growth. Therefore the Task of HR is very important to maintain equilibrium throughout the hierarchy. How to intact your employee during recession: Here is how to keep your employees with you and away from your competitors during tough economic times. Differentiate Between Your Good and Average Employees Redirect Your Employees to Other Departments (Job Rotation) Listen to Your Employees Keep Them Motivated and Busy (Communicate-Communicate and Communicate) Show them the long term vision The above steps will enable the employer to hold its team together during a recession, and will even make bond between all of you stronger. Employees should be motivated enough to stick to the employer during tough times and put in the extra effort required for the organization growth.

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ROLE OF HR DURING RECESSION

The most recent survey, which was conducted among 117 employers in early December, found that other popular cost-cutting measures included: Downgrading/canceling holiday party (35 percent) Increasing benefits communication (32 percent) Eliminating/reducing seasonal workers (28 percent) Organization-wide restructuring (23 percent) Raising employee contribution to healthcare premiums (20 percent) Increasing pay communication (16 percent) Restructuring HR function (14 percent) Implementing a salary freeze (13 percent) Having a mandatory holiday shutdown (13 percent) Reducing/eliminating other employee programs (12 percent) The percentage of employers that have already implemented salary freezes jumped from 4 percent in October to 13 percent in December. Sixty-one percent of employers reported that they reduced their planned merit increase for next year from 3.8 percent to 2.5 percent.

HR role in strategic people management

HR is still more focused on transactional activities and HR operating efficiencies than on high level strategic people issues. However, the executives' concern about people is not translated into increasing importance for HR. In fact, the HR function, which executives believe is concerned with activities such as reward and benefits, performance evaluations and HR operating efficiencies is often seen as being unconnected with how a business will deal with key strategic HCM challenges such as talent management, workforce productivity and leadership development.

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HRM Innovations in Recession

The recession is about the creative Human Resources Management. The HRM Function is asked to bring new ideas, to change the HRM Processes and to develop or change the procedures. And this effort has to be cheap or it has to cut the costs of the organization. The HRM Innovation is easy in times of the business growth, but the recession is not good for big innovative HRM Initiatives. On the other hand, the top management understands the effort to innovate the HRM Processes better. The top management is in the search for the potential cost savings and they count every single penny brought by the line management. The HRM Costs are usually a very significant cost to the organization and the HRM Function has to be proactive. The HRM Function has to focus on unpopular innovations during the recession as the role of Human Resources during the recession is to save money to the organization. The top management expects all the support functions to bring innovative solutions, which will have to make the organization stronger, when the next growth era comes. The HRM Innovation during the recession has to focus on the following topics: 1. Reduce the number of employees in the organization 2. Strategic initiatives to increase the productivity and efficiency of the whole organization 3. Redesign of the compensation scheme 4. Cancellation of several benefit schemes On the other hand the HRM Function has to find innovative solutions for the following topics: 1. Identifying the real key employees and to keep them in the organization 2. Identifying the real top potentials and to strengthen their development program The second two topics have to be done with the minimum additional costs and it is a really hard task to accomplish. The HRM Function has to have priorities in mind and the strategic impact of the HRM Innovations in the recession time. The role of the HRM Function is not to cut the costs for the time being, but to make the organization stronger and ready for the future growth. As a leader and strategic partner in your organization, you have the tools to assist your company in surviving and thriving through these difficult times. First you need to start thinking strategically How can the organization make effective and economical changes that will help through these difficult times? What can I do to minimize our organizations risk for fines, violations and/or unnecessary legal proceedings? Following area should be looked upon:
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Ensure your organizations policies and handbooks are up to date. Remember that an annual review of your employee handbook for compliance by an experienced professional is highly recommended. Also, each employee having a copy of the employee handbook is not enough. They have to be able to read and understand the content. Be sure that you provide employees a handbook in a language they can read and understand. Layoffs are never easy. Ensure you are familiar with your legal responsibilities in a lay off to minimize your organization's risk. Be sure that you have properly defined the criteria you are using to determine who will be let go. Alternative Workweek Schedules and Flexible Scheduling can maximize production and cut-back on overhead costs for organizations Cutting Pay may be an option to consider saving on todays costs. Is this really an option for your organization? How you are pay scales as related to the market? Are you willing to risk losing key employees whose talents may be needed by other organizations, because you chose to reduce their pay at this time? Remember, you should not cut pay without a recovering strategy of how you will re-adjust when the economy has turned. Offer Professional Development as a reward or incentive to employees for performance and hitting goals. Professional Development courses are an economical way to reward employees with the gift of education and skills they will use throughout their lifetime. Downsizing does require internal document maintenance for your organization. As jobs are modified and responsibilities are increased changes also must be made to your job descriptions. Remember that the law is very specific on what positions can be considered Salaried Exempt and what constitutes an Independent Contractor. Looking at adjusting your staff to fit into one of these two categories is NEVER the answer when trying to save money.

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RECOMMENDATION
Recommendations while your employer facing negative challenges during recession: 1. Top management should know the contingency plan. 2. Do the brainstorming session with your top management and contribute in their strategic planning. 3. A complete or partial job freeze, however, communicate to the workforce that the company many continue to recruit key individuals even in difficult times 4. Review the employee performance evaluations to determine the key people that company cannot afford to lose. 5. Flow of Communicate should be from top to down that will help in making conducive atmosphere within the organization 6. Make prepare yourself for individual and group concerns therefore there should be a proper counseling session. 7. To maintain a calm atmosphere 8. Review all HR policies, processes and procedures to ensure that they are purposeful and contribute directly to the success of the company. 9. Suppose the company has to lay-off staffs ensure that there are no other opportunities for them in other functions or divisions of the organization. 10. Advise managers to deal the process of managing change. Managing Human Resources (HR) in a difficult economic environment is even more demanding than working in times of rapid growth. Therefore the task of HR is very important to maintain equilibrium throughout the hierarchy.

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Everybody talks about the best HR practices, it is Good, but merely bringing in the best cannot give the Desired results if some Bad HR practices co-exist in The organization. So what are those Top Ten Bad HR Practices which caution & alert an organization.
1. Employee has no access to personal data (over-confidentiality): Cant view, cant update personal information; has no access to his/ her Leave records, salary data, attendance record, training & promotion details. Not sure if the managements decisions are based on correct information. This breeds suspicion since there is a perceived lack of transparency.. Impact is on employee-employer relationships. 2. Lack of clarity on Deliverables: Absence of a well-defined job-description leads to lack of accountability. Neither the employee nor his/ her immediate superior (boss) are able to define the job-deliverables. Result is the loss of focus & interest. 3. Absence of Goal-based performance: Employee is unaware of the goals to be achieved during the year. There are no quarterly targets and no process to track their completion. The organization carries out merely an end of the year postmortem of an employees performance. The unaccomplished tasks go unnoticed. Difficult to build a performance culture in such organizations. 4. Employee development without his/ her involvement: No opportunity is given to an employee to project his /her development needs. Training manager nominates employees on various development programs. Even the Line Manager is bye-passed. There is no formal process to collect training needs and do gap analysis of skills & competencies. All this leads to unplanned employee development, a wasteful effort, both in time & the dollars spent on training.

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5. Rusting of Talent: Long tenures in the same position with no avenues for job rotations make people rust & relax. In the first 2-3 years in a job position an employee experiences new challenges, innovates & contributes. Thereafter the routine takes over. Even a change of location, if not the job, can provide the requisite challenge to an employee this is enough to remove the rust and make the talent bloom again. 6. Non-performers lobby: Each non-performer remains glued to his/ her chair. The worst happens when a nonperforming manager has to apprise subordinates who are professionally competent, high-energy youngsters. Some of them leave the organization per-maturely and add to the attrition rate. The end result is the building of a non-performers lobby which impedes the progress of the organization. It is a vicious cycle which can be stopped only by filtering out the non-performers. 7. Absence of schemes to retain performers: Getting rid of the non-performers is important, but to be able to identify, develop & retain high performers is equally vital. If your best talent is being lured by other companies, your schemes to reward performance are simply inadequate. 8. Shyness to obtain Feedback: Employees have individual opinions about the quality of leadership in the company. They know their engagement levels at the workplace. They understand what hinders their performance & satisfaction. Unless the management is prepared to receive and analyze their objective feedback, no worthwhile initiatives can be launched to apply timely corrections. The end-result could be lower productivity and increasing disharmony. 9. Line Manager not a People-Manager: If a Line Manager only performs his/ her operational/ technical role and has not been groomed to become a people - manager, who is to blame? H R has probably faltered by not institutionalizing a system which ensures that before appointing an employee as a Line Manager, he is given training on how to manage people. Competencies are needed for understanding your workforce, deploying HR processes, motivating people & uniting them as a team. A good engineer at the work place has to be transformed into a good manager for organizational growth.

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10. Technology Phobia: Many old timers, even in some big organizations, refuse to acknowledge that introduction of technology can empower HR staff to provide timely, accurate & quality information for employee oriented decisions. They sometimes feel that IT staff will need to be hired to manage computer based systems. They probably need an exposure to technology which neither requires elaborate hardware platforms nor software expertise within your premises. The Vendor must do everything for you to implement & maintain your systems as long as you like. Shed your phobia at least.

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Top 10 HR Tips For beating the recession

A survey of HR directors and business leaders by recruitment firm The MBS Group has produced what it calls 'ten tactics for tough times. Those involved in the research were all at board or senior management level, within the retail, luxury, and consumer goods sectors. How useful these tactics actually are is open to debate, but they provide a useful barometer of the current thinking taking place in top firms. Tactics for Tough Times 1. Ride the storm - preparing for difficult times but not currently planning large scale layoffs. Leaders of consumer, retail, leisure, and luxury industries are wisely shying away from kneejerk staff cuts or talking about culls of more mature staff. This reflects an innovative and creative approach to talent that other sectors would do well to observe. 2. See upside in downturn - the best business leaders see opportunities in turmoil. Business leaders are focusing on the future, aiming to find new opportunities and disrupt existing markets with innovation, based on consumer insights. 3. Show me the value - rapid response and appropriate price promotion are working for some. Extreme value propositions are working well with increasingly cost-conscious consumers. In an effort to grab market share, a race down-market is developing, to capture consumer spending power with a best-price message. 4. Pocket returns in pockets of growth - some sectors are positively booming, such as online, home entertainment and some luxury brands. Online business continues to defy gravity. The results seem to indicate a digital divide between companies who have older business models and those who have successfully incorporated e-commerce and new technology platforms. The latter are now benefiting from this shift in consumer behavior. 5. Refocus on emerging markets - opportunities in Asia are attracting increased attention and investment whilst Europe and the US flounder. Many respondents indicated that they are refocusing their businesses on the significant growth opportunities in the Middle East and Asia and, to a lesser extent, Eastern Europe. 6. Keep up with customers - businesses must find a way to match or exceed customers' increasingly agile changes in behaviour.Customers behavior is changing faster than businesses are able to shift their strategies. Consumer loyalty is not surviving the challenge of great deals and people are defecting to (own) brands that previously they would not have considered.
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7. Hang on to talent - attracting the best talent is increasingly vital, but also becoming increasingly difficult. Business leaders are not planning for the large-scale lay-offs that happened in previous recessions. Instead, they are focusing on whether they have the skills and talent to take them through the downturn. They recognize that it will be increasingly difficult to attract the best new talent into their organizations. 8. Empower your people - business leaders are recognizing the value of experience, while also ensuring that their people have the right skills and training in place to survive and prepare for the upturn. Internally, the focus is on having the right strategies in place to retain the best people, as well as managing under-performers in a tougher way. Incentives are being adapted to reflect these changed priorities. 9. Keep up morale - maintaining workforce morale will be a decisive benefit. Businesses reported that they are redoubling efforts to demonstrate decisive leadership via more internal communication. For example, several companies are making increasing use of face-to-face communication to increase the CEOs visibility, to set the right tone and convince employees that their jobs are safe. They recognize the need to avoid the creation of a bunker mentality within their businesses and build employee confidence and trust in their leadership.

10. Engage your staff - keep staff members on your side.

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