Impact of HRM to the corporate sector

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

In today's arena the most common word we come across are recession and downturn. Recession or crisis is the part of the normal cycle of business. It is certain that they will sooner or later occur. Therefore, it makes just as much sense to plan for recession or downturns as it does to plan for good, economic times. The management people and employees may experience anxiety around a number of issues during an economic crisis or downturn. In this recession period HR play an important role to make the industry sustain and the entire economy flourish. This paper expresses the challenges of human resource management in the global recession situation.

What can HR do?

            HR needs to be proactive and come up with early interventions as for any organization to survive during recession; the ability to retain its best people is must. During these days, HR people sometimes even take the harsh decision of reducing the numbers and land up at downsizing. The word downsizing is even taken as rightsizing and optimizing but we may not know or ignore the fact that neither the bad situation nor the good conditions lasts long.

Downsizing process

Revised leave structure for all employees

Reduction in the different component of pay packages

Identify the non-value added activities and resources

Threats to employee emotional engagement

When the going is tough, it is a must for HRM and its managers to Challenge the Challenges and the only remedy is just not mere downsizing however downsizing the dignified way.

Be Creative

            Now is the time to implement new ideas, to change the HRM processes and to change the procedures. This has to be done in a way that it cuts costs and motivates people. HR can focus on the following things i.e.

How to increase productivity and efficiency in the corporate sector?

How to reduce the benefits costs?

Redesign compensation structure?

How to retain and develop high potentials?

How to minimize the employee costs so as to avoid retrenchment?

            During these uncertain times, corporate will realize the importance of having competent skilled workforce which will ensure that focus stays on trainings but there may be a major reduction in training budgets. In this time any decision taken by the company impacts each individual personally rumors float around. Its top management's duty as HR to ensure that thecommunication channels are kept open, transparency is maintained. We also need to ensure that accurate communication happens on time in full, instead of employees hearing things with details from the grapevine first.

            Provide adequate support to leaders and managers in terms of people management processes. Find ways to keep up the motivation levels of employees. If the corporate plans to retrench the workforce, counsel not only the employees who will be staying back but also the employees who have been asked to leave, be fair with them.

Setting the context 

            Human Resource Management functions are performed in many organisations by different functional heads independently. The most important challenge in recession period is revolutionizing the Human Resource systems to identify, maintain, develop and utilize talents across the organization to their fullest capacities.  An organisation may claim that it has the best of the systems to identify talents across the organisation.

            HR has now a chance again to prove their value creation role in the corporate only if it understands what it needs to do now. Some of the basic strategies should be followed by the corporate managers i.e. reduce administrative and establishment costs, hold large bonuses and reward payments, create participative forums for dealing with the difficult times ahead, retaining top talents should be emphasized by the HR managers to the management and HR managers need to network with fellow managers to find out how best to visualise the problems and try to solve them.


¨      No longer living under virtuality but has started living in realities 

¨      To pay heavy costs for workforce livings

¨      Making a paradigm shift towards reality

¨      A large scale change of the Human Resource systems

¨      Fine tuned to make a shift or ready for changes

¨      Continue to out perform, excel and remain a leader

Present Challenges of Human Resource Management

¨          Corporate reorganization

¨          Sustaining company's position and growth

¨          Changing demographic workforce

¨          Knowledgeable and multi skill workforce

¨          Changing mindset of workforce

¨           New industrial relation approach

¨          Society based corporate responsibility

 Human Resources - Perspective 

            The popular emerging perspective of Human Resource is integrating. Human Resource delivery system processes into Human Resource enabling system and to achieve high levels of mutual commitments.  Mutual commitments is according to the three tiered institutional framework at strategic, functional, and workplace levels.

            Strategic Level 

Supportive business strategies

Top management value commitment

Effective voice for Human Resource strategy making and Governance 

Functional level (HR - Policy) 

Staffing on stabilization

Investment in Training and Development

Contingent compensation

Work place level 

Selection on high standards

Broad task design and team work

Employee involvement in problem solving

Climate of co-operation and trust  

Role of HR

            When the corporate is in turbulence zone, HR can put its categorical best in ensuring that he guides the corporate successfully. HR needs to be very powerful in such situations because they not only have to maintain the people motivation level but has to increase it using non-monetary tools. There are certain points that HR can opt for in such a situation where people are insecure about their job. HR can pay attention to develop the people on key skills and enhance competencies.

            HR has to play an active role in refrain the top talents, act as a caring mother while top performers punished with being rewarded for their performances, get people aligned and developed to fight with this critical situation, develop people on cross functional skills to balance the surplus and shortage of workforce, help the corporate to raise the people performance bar, ensure the fair evaluation of people performance, play an active role in control of communication flow, pass the onus of making the corporate lean, review its minor low cost benefits and contribute to enhance the value addition per employee by maximizing employees inputs.

Sustaining HR's Role

            There are many more possibilities of sustaining HR's increasing role as not only growth catalyst but sustaining business through greater employee engagement. Therefore, HR professionals needs to tighten their belts and get ready for some challenging yet meaningful activities which will help to change the perception of HR forever. The economic crisis is forcing to separate some employee and there is no way around. No problem! Do it, but avoid creating a panic around, in employees, in investors, in market and in country by crying loud about the recession.

            HR's task is also great, if the HR manager creates conducive environment through his professional approach in achieving productivity of course, with the support of all teams which is the need of the hour. Business has experienced different dynamics that pose many challenges. HR and enforcement authorities together strive for achieving the common goals like compliance and adherence. HR makes all efforts to create and sustain an employer and employee friendly atmosphere and responding to the current needs and challenges. 

HR's Responsibility

            In today's economic melt down where job cuts, loss, pay reduction, last come first go, insecurity of employment atmosphere prevail, HR has special responsibility to create ease environment to the affected by counseling, displaying care and concern, preparing them for multi skill task, engaging and deploying in other required areas of functions like security, crisis management team, etc. HR should engage in more positive side, making and helping employees to reform, perform and transform which will ultimately make a solid impact on business. This will display the great and real engagement of Human Resource Management.


            Human Resource Management must be able to address the right kind of demands related to Human Resource functions during the recession. Human Resource Management must play a highly proactive role in managing the issues of global recession by helping organization to enhance their abilities to learn and collaborates, manage diversity, ambiguity and complexity. Human Resource Management is responsible to manage the human resource of the corporate to maximize the productivity, efficiency at minimal cost and maximize profit. During this global recession, Human Resource Management is facing the many challenges and changes in organizational level, workplace and HR department level itself. The challenges can be faced by HR Managers effectively if proper strategies are implemented. The recession is the temporary economic climate of the business world. It will be changed through more productivity at minimal cost and maximize profit at moderate price of products in business.