Are HR professionals ready for the recession?

The CIPD’s John Philpott has predicted that 600,000 jobs will be lost next year and that the redundancies will continue into 2010. The British Chambers of Commerce have warned of pay freezes and even cuts in wages over the next year. It all sounds very gloomy.

That said, some people are going to be very busy. There will almost certainly be an increase the case-load for Employment Tribunals and, therefore, a corresponding growth in business for some employment lawyers. The reason being that many employers don’t have a clue how to implement pay cuts or large-scale redundancy programmes without falling foul of the law or provoking industrial action.

You can’t just sack people or cut their pay and expect no comeback. There are rules about how companies must handle redundancies and implement pay cuts. In both cases, the laws on consultation, communication and negotiation are quite complex. Trying make large numbers of people redundant, or persuading people to take a pay cut, while staying within the law and maintaining good employee relations requires a particular set of skills. I have met any number of HR professionals over the course of my career but only a few who are really good at this sort of thing.

And many of the good ones are getting on a bit. It has been fifteen years since the last recession and considerably longer since most firms have had to grapple with difficult industrial relations issues such as pay cuts. During the good times, many HR professionals have focused on talent management, leadership development, change management and coaching. These have been seen as the interesting areas and those most likely to lead to career advancement.

As a friend of mine said recently, with a hint of irony, “We are all development consultants now.”

The oily rag activities like employee relations, disciplinaries, redundancies and the practical application of employment law have become the Cinderellas of the HR function.

I know a number of organisations in which most HR professionals have never done a disciplinary, never negotiated a contentious change and never managed a large-scale redundancy programme. HR managers who have prepared cases and given evidence at tribunals are even more scarce.

At the risk of sounding like an old git, we have a generation of HR managers who came into the profession after the last recession, have known only good times and have never been faced with the nastier HR tasks. Many of these HR professionals are now in relatively senior positions. 

Most of them are bright people and will, no doubt, learn quickly. But there is no substitute for bitter experience and some people will doubtless end up learning their new skills the hard way.

By contrast, some of the older HR professionals for whom these messy tasks were second nature have been pensioned off or have left their organisations to become consultants. Often, their skills were seen as being no longer necessary in a world of economic booms and talent shortages.

Inevitably, many organisations will get it wrong and will get caught up in the legal minefield that surrounds large scale redundancies and pay cuts. Those that avoid the courts may still, by ham-fisted implementation, end up with a disgruntled staff, working to rule and ready to jump ship as soon as the economy improves.

Managing through this recession is not going to be easy. When times are good, it’s easy to say ‘people are our greatest asset’ and look as if you mean it. In a downturn, cutting staff costs legally while still motivating your workforce is no mean task and one that requires a high level of skill, judgement and patience. Those HR managers that keep their jobs will need to have these skills or will need to develop them quickly. Either way, they are in for a tough year.

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11 Responses to Are HR professionals ready for the recession?

  1. jameshigham says:

    This is an excellent question and perhaps one needs to step back from the profession to see the answer in context.

  2. CherryPie says:

    That is an awful lot of job cuts…

  3. Completely agree with your post, Rick. At least one head hunter has told Personnel Today they are being asked to find senior HR people with experience of large-scale restructuring in the recession of the early 1990s. If as an HR professional all your experience is just of the good years, you’re in for a bit of shock. On the other hand, as you say, anyone with the capacity to help their organisation motivate the workforce and achieve additional discretionary effort from people going though restructuring and uncertainty will be worth their weight in gold. My take on this can be found at http://www.xperthr.co.uk/article/89842/xperthr-outlook-video–hr-in-the-downturn.aspx

  4. Jo says:

    We aren’t managing through anything. That implies a full circle.

    We are moving on. That means good HR. Envisioning the future and helping people in the firm to do the same.

    Think downturn and think Zimbabwe if you wish ( I am from there – I can use the Z word).

    That is not what this is all about. We are about identifying sound business models and moving on to sound platforms. Those are not skills of the last downturn. Those are skills of people who have been actively managing, not coasting, in the uptick. See you on the crest of the wave!

    Cheers and thanks for the pertinent, always current, always topical blog! And not #So.ME, not broadcasting, always worth reading! I bow my head. Bend my knee (being female). Tip my hat (being an androgynous manager)

    Looking forward to 2009! You may like to follow up @loudmouthman who is beginning to organize “displaced” people to get their lives going again.

    A happy NYE and an unexpectedly prosperous 2009!

  5. There was an excellent article in Management today a couple of months back called “the death of the b llocking”

    Maybe I have added this as a comment before but it outlined how HR & managers generally have been backed into a corner by all sorts of “isms” and that some workers in the UK public sector are virtually ungovernable. As a result, the skills you talk about just aren’t taught because the organisation doesn’t need them.

    (Maybe 2009 will be the year of tough love rather than molly coddling?)

    It then compares to the like of BBC Dragon, Deborah Meadon who will give a b llocking and then just get on with it as if nothing had happened.

    I will try to find it, scan it in & post a link.

  6. Rick says:

    Jo – are you suggesting HR managers should say something like, “We’re cutting your pay because we are idenifying sound business models and moving on to sound platforms”?

    You’d end up being reported in Private Eye, or worse, the Daily Mail if you said that.

    I’m all for re-framing and trying to think positive and all that, but there isn’t really any way you can dress up pay cuts and mass layoffs.

    And you need HR people who can do this horrid stuff in the least damaging way possible.

  7. Rick says:

    Jonathan – I’ve found the article in question. How the hell did I miss this one?

    http://www.managementtoday.co.uk/news/849710/death-bollocking/

  8. As the saying goes “I saw this & thought of you..!”

  9. Rick says:

    Are you suggesting that I take pleasure in going around bollocking people?

  10. Jonathan says:

    You might think that – but I couldn’t possibly comment….

  11. AKanksha says:

    This is a good topic.

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