It goes without saying that the global COVID-19 pandemic is at the back of everyone’s mind. The highly-contagious nature of this new virus has locked down entire countries and crippled economies.
Now with the prospect of a global recession looming on the horizon, many companies have been left wondering if there will be a tomorrow. Singapore is no different with business owners looking to the government to provide a second economic stimulus package in the wake of the Covid-19 outbreak.
From a mainstream perspective, most would expect HR professionals to play a relatively small role during a recession. However, contrary to popular belief, an effective HCM or human capital management has the potential to help organizations get ahead of the recession.
In this article, we take a look at why effective HCM can provide businesses with an edge over their competitors during an economic downturn.
During a financial crisis, the first priority of any business would be to reduce any and all costs in order to maximize profit; a sound tactic is the first rule of conducting business.
From compulsory unpaid leave to pay cuts and even layoffs, employees are often the first to bear the brunt of any cost-cutting measures within their organizations.
For example, laying off several dozen employees may in the short term significantly reduce salary costs. However, doing so may result in remaining employees having to pick up the slack which in turn affects productivity and employee efficiency.
The costs of having to re-hire and re-train new employees at a later period typically end up costing more in terms of time and money spent.
Furthermore, managers need to take into account the consequences of their actions post-recession because employees are sure to remember how they were treated by the organization during the crisis.
HR professionals can get ahead of the curve by looking into automating repetitive, non-value-added tasks such as filing, data entry, and even resume analysis. Doing so frees up staff for other tasks whilst at the same time eliminating the need for additional manpower.
With Covid-19 sweeping the globe and job cuts on the horizon, it’s perfectly understandable that employees would be feeling anxious and stressed out all the time. Given that livelihoods are on the line and uncertainty reigns supreme, managers and HR professionals need to forge the way forward.
Keeping employee morale up is crucial during times of crisis because stressed and worried employees make more mistakes and are less productive. While employees are less concerned about finding new jobs now, high-performers are the exception to the norm.
Given that most businesses are exploring layoffs and redundancy schemes, rival organizations may see this as the perfect opportunity to snap up highly skilled candidates.
Hence, now more than ever, managers and HR professionals need to ensure that the goals of all employees are aligned with those of the organization. Focusing the energies of the entire organization in a single direction could just be what the business needs to stay afloat during this crisis.
Human capital management is focused on employee talent acquisition, management, and optimization. In a time such as this, talent optimization is particularly useful as it is the process of aligning both business and talent strategies in order to achieve desired results.
While we may be dealing with a global health emergency and a looming global recession, this does not mean that the war for talent is put on hold.
Quite the contrary actually, as in such demanding times, there exists a need for talented and highly capable employees who will be able to drive their respective organizations forward.
Upskilling is one such example of talent optimization where promising employees participate in a variety of training and development programs aimed at arming them with the skills and knowledge needed to take on more advanced roles within the business.
This has the benefit of improving employee morale and satisfaction by providing both training and career advancements whilst also securing a pipeline of ready talent for any future plans the organization may have.
Alongside this, optimizing internal talent reduces the costs associated with hiring and training new staff whilst also significantly cutting down on employee turnover.
The dual prospect of a worldwide pandemic and a global recession can be a scary thought for just about anyone. However, an effective HCM has the capability to allow organizations to realign themselves to take on just about any challenge.