Hr To Deal With Challenges At The Time Of Recession Business Essay


Recession puts up the challenges right in the face of the HR professionals forcing them to come up with some strategies that can combat the issues created by recession. In this study we will first take a look at the classical strategy paradigm. Then we will take a look into the macro economic environment. Then we will take a look at the micro-environment and what are its effects on us as competitors, and then we will establish the strategic factors that the HR influences directly, then last of all we will look into our tactics. Recession is all about creativity of human resources management it is required for the Human resources to create new idea to develop different processes that will change or improve the procedures, further more it needs to be cheap and cut down the costs for the firm. It is a good time for the human resources management to innovate when the business is at its best economic growth, but at the time of recession or bad economic conditions any big innovative decisions is risky for the human resources management initiatives.


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1) Consolidating workforce: workforce consolidation provides a great advantage to any sort of an organization; this is not only accounted on, by possessing a slimmer workforce, but importantly it means the recreation for the workforce to build up its affectivity and utilization.

2) Salaries: there has been an increased hike in salaries in the past few years, solely because of the retention pressure. According to the Hewitt associations survey it shows that the Kuwait Inc had recorded the steepest increase in salary increments for the last seven years and it continued till 2008. but this suddenly changed as recession increased the salaries began to plummet down and pay cuts took over as the procedure of the day. The Hewitt association conducted the 13 annual salary increment survey around 480 companies all around the world. The survey showed that even the increased salaries in Kuwait had started to dip downwards, it had dipped to 8.2 percent compared to the salary hike of 13.3 percent in the year of 2008, though it is still the highest among the Asian-pacific regions, and it the one among the highest in the world. According to surveys conducted, this is the first time in six years that the salaries in Kuwait has increased by only single digits. This survey was conducted for the year, between December 2008 to 2009 January. The Hewitt association anticipates a further drop in the salaries increase in the months to come, so periods like this is good for an organization to cut down on its costs and streamline its salaries.

3) Organization performance centric: this recession has made the organization to dig out their real performer's amount the total workforce. The non-performers were issued notice to perform or to quit. While other non performers made their own way out of the organization.

4) Recognizing real talent: the hard scrutiny of the organization has not only identified their non performers but at the same time it has also recognized the real talent within their organization.

5) develop talent as future leaders: as the organization identifies its performers, especially at the time of recession then it is time to for them to invest wisely and develop these talents skills to prepare them to turn into future leaders. The organization should keenly study how much they are investing on their employees and what sort of skills will be required for the growth of the business.

6) Restructure policies: the pace of hiring, apprising, and training that had increased maddeningly has suddenly come to astonishing halt, or you could say a sudden full stop. As the pace at the time of recession is low. The HR's should revisit their policies then they can weigh the differences with their best in class activities and then remold them to bring out the best at a given time such as the recession.

7) Improving employers brand: even though most of the companies has freeze their hiring, but still hiring people that have the talent and also retaining them will always be a challenge faced by the HR, as they attempt to maintain their employers brand intact and attempt to rebuild on it can turn out to have a cascading effect later on.

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8) Building trust and morale: communication between the HR and the companies' employees is a very important need, to help build a relationship of morale and trust. Trust among the workers can be a vital point in tough times for a company. the HR is liable to make sure that the employees do not loose their morale and lag behind in the work, when the organization is going through a tough times.

Keeping your employees intact: keeping your employees away for other organization and retaining them in your organization during recession time.

1)Identifying your performers and average workers.

2) rotating the employees to different departments.

3) paying attention to every employee.

4) continuously motivate the employees and keep them busy and communicate always.

5) give them a long term vision.

These steps should help an employer to retain his employees at the time of recession, building a stronger bond with its employees. Continuous motivation develops a form of trust between the employer and the employee, making them to strive harder to lift the organization.


At the time of recession it is the prior responsibility of the Human resources management to come up with ideas that can make the required change of the process or develop the procedures. And moreover, this should be kept in mind that this attempt has to be cheap or cut down the costs of the organization. Human Resources Management innovations are usually smooth in times when the business is economically growing, but it is never smooth when there is a recession and neither is it a good time for innovative initiatives. It is the duty of the top management to study the effort and to see what the requirements for better HR innovations are. They continuous aim should be to look for cost cutting and every penny should be counted that the line management brings in. the cost that are involved in the HRM are very significant and sot the HRM needs to be very proactive.

They have to be attentive about they investments on unpopular innovations at the time of recession as this is the time where the HR plays an important role of helping the organization to save money. As the top managers places its expectations, on its support functions to bring about some innovative solutions. That will help to strengthen the organization for its next coming growth era.


The main places where the HRM innovations need to focus on during recessions are:

1) Cutting down on the amount of employees

2) Make initiatives that will improve the organizations efficiency and productivity.

3) Minimizing the benefit schemes.

4) Rearranging its compensation schemes.

The HRM functions needs to get innovative solutions to support the following topics:

list out the performing employees and retain them for the organization.

Finding out their best potentials and build their development programs to support them.

The other two topics that are required need to be done with minimum costs, which may be hard to accomplish. At the time of recession the HRM should maintain their priorities and strategic impact of their innovations. It is not that necessary for the HRM to concentrate on cutting their costs at the beginning, but rather to concentrate on how the organization can be strengthened for its future growth.

As you are the strategic partner and leader for your organization, you have got the tools that is required to assist you to help your organization to thrive and survive through the hard times of recession. First of all you must begin to think strategically.

What are the ways that the organization can choose to make effective economic changes?

How can I bring down the risk of fines violations or unwanted legal proceedings against the organization?

The following areas are where you should look upon:

i) Optimizing the strength of manpower

ii) Taking strategic initiatives that will be helpful in increasing the organizations efficiency and productivity.

iii) Working on compensation benefits.

iv) changing the designs of development and training programs

Making sure the organizations handbook and policies are up to date.

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Keep in mind that it is very important that experienced professionals makes an annual review of the employee's handbook. And the employees should not just have an employee handbook, but they should know what it is all about. So for that the employee should be given a handbook in a language that he can understand.

. Make sure that you are aware of the legal responsibilities in a lay-off so you can understand the risk of your organization and help you take some steps if possible to safe the organization. Make sure that you properly mention the criteria that you use which determines who is to be let go.

.making flexible schedules and work sheets schedules can help in maximizing productivity and cut down the over head costs. Follow all the rules of the DLSE when you think its right for you to take a decision on flexible scheduling and work week schedule is needed for your company.

. Cutting down on pay can be an option for today's costs, but it is really on an option for the company? What is the condition of your pay scale when compared to the market? Can you risk loosing out talented employees to other organizations because of cutting their salaries? So remember never to cut down on pay without making a recovery strategy and how will re-adjustments be made when the company's economy turns.

.optimization requires maintenance of internal documents if downsizing is needed to be done. As jobs in an organization take a new mode of modification responsibility begins to increase. So changes are supposed to be made according to the job description.

. Always keep in mind of what the law considers to be a salaried position, exemption and what comes under the independent contract. The law is very specific on these, trying to adjust your staff just to get in these categories in really not the answer that you need to save your company's money.


The HR of an organization is supposed to act like a democratic leader at times of recession. The HR should make sure that the organization and the employee's interest should be combined and a situational leadership should be embraced and a humanistic approach that will help the employees to achieve the coals set by the organization.

Some points the HR management should look into at the time of recession.

The management of the organization should be aware of the contingency plan of the company.

Even though jobs are put on freeze partially or completely, the HR should make it known that key individuals will still be recruited even it there are hard times.

Sessions should be held with the top management so that see that you contribute in their plans for the company.

Communication should flow from top to down and around the organization which will help in a conductive atmosphere

Continuously evaluate the performances of the employees so that you can pin point the key performers that the company would never want to loose out on.

Must be hard and firm so that you can maintain a calm and professional atmosphere.

Must often prepare good individuals and group concerns and good counseling sessions also.

The HR must go through all the organizations process, procedures and HR policies to see if they are all purposeful or not, and if they have the capacity to directly help the organization for a better future and growth. The ones that are not purposeful and can not effect the organization to grow should be done away with. Or else it will account to unnecessary expenditures.

Incase the company has to lay off some of its staff, then you should make sure that there are no other positions available for them in any other divisions or functions that can suit their ability, and when you make sure that there are none then the company can go ahead with its lay off plan.

Continuous advice should be given to the managers on dealing with the processing of managing change.

The HR managements skills is tested to its core in bad economic conditions such as in the time of recession; for it is at this time that an organization suffers most and it requires the HR management to come up with some ideas that can rescue the company with limited resources, which is very difficult. The duty of the HR is quite comfortable when the company is growing in its economic status.


Easy to say is that the world wide recession that kicked off as a prime crisis in the U.S.A has slowly spread to all the other countries around the world, even getting Kuwait into its horrible folds. Very lately the growth rate of the G.D.P was around 9 percent for the last four years it slowly moved down from the quarter of 2008, because of the employment declaration, G.D.P tax ratio, import-export, reducing capital inflow and outflow began to hit because of the economic slowdown., as the impact of this crisis has effected the country of Kuwait much deeper then what the policy maker had estimated, though it is still much lesser when compared to other developing countries.

Since man is counted to be a businesses most valued and biggest assets, for with out man the daily business functions, like managing cash flow, business transactions, and all forms of media communications, and customer dealing, would in no manner be possible to get completed. So when recession and recession recovery topics are discussed the HRM has a very important role to play. The HRM should be capable to address the exact type of demands required by the HR functions at the time of recession. The HRM is to play an important role of controlling the world wide recession by making the organization to study and collaborate with diversity, complexity and ambiguity. The HRM is required to handle the human resources to help the organization to maximize their productivity and their affectivity at minimum costs and high profits. The HRM faces many upheaval situations in workforce and HR level as well. The HR managers will be able to face the challenges if proper and effective strategies can be implemented. Recession is a temporary economic atmosphere in the business world. Minimal costs and maximized profits derived for moderate costs of products in businesses can change this atmosphere.