Our CEO looks at the state of the business world and how HR departments should react and the respect they can garner from doing so with deliberate action.
by Elliot Clark
In January and February it is expected more than one million people in America will lose their jobs. It is tragic and overwhelming to watch neighbors, friends, and former colleagues gripped by the uncertainty and sadness of unemployment. These are indeed tough times and every business department is being called upon to contribute savings or productivity to survive the economic turmoil.
Sadly, it often falls to the HR leadership to execute the logistics of reductions in force when these are the only options available. We also face increasing pressure on general and administrative expenses effecting the HR department itself. An experienced HR leader knows that often a smaller, more stress-ridden workforce is harder to manage for productivity than a larger force. But, in all moments of trial there are opportunities. And one exists now.
It is time for HR to take its seat at the table and ante up. HR leaders have long sought this proverbial seat at the table, and now being proactive and embracing the necessities of business survival can send an important message of HR as “business” leaders as well as “people advocates.” I recognize that HR practitioners are, perhaps, more empathetic to the human cost of downturns than other management disciplines, but that makes these changes no less incumbent upon the business. Being willing to recognize and proactively take action before being prompted is the core of leadership.
We all understand the valuable role of HR in companies and often have to defend its value proposition to our less enlightened brethren. And, yes, G&A departments are often not seen as “core” to the business. Yet every CEO I know says that TALENT is one of the primary concerns. How do you strike the right balance between the importance of the mission of HR and cost cutting in down economic cycles? It is a difficult question.
An equally difficult question is how does the HR department go to the line staff to manage an RIF if it is, itself, resisting a downsizing? HR should now be looking at how to aggressively address its operational objectives. Options such as shared-services centers, outsourcing of non- strategic activities and transactional functions should be given a hard look. Optimization of cost and maximum return to the bottom line (not that much has not been done in these areas already) must be aggressively pursued. HR must do this to lead by example and, therefore, have the respect and the standing to guide other departments in this painful process.
Outsourcing is a way to get things done and, at HRO Today, we certainly address this through case studies, but outsourcing is only one operational model and many operational options exist. We highlight different choices within our features. The right model for your company should be evaluated and implemented.
In tough times (I have been through a few of these), you reconcile the pain of layoffs by focusing on who you can save in an RIF, not who you lose. Saving some staff is still better than saving none. Demonstrating leadership at a time like this to the operating business units is a deep responsibility. The willingness to make necessary and systemic changes to your long-term management philosophies around shared services, retained organizations, and geographical distributions of staff will serve to strengthen your company, your moral authority, and the overall standing of HR as a management profession in the eyes of the other members of the executive leadership community.