HR in economic changes: Our changing world
Change and uncertainty are increasingly becoming the only certainty today; however, HR can help. HR in economic changes is critical for how businesses navigate these changes. Continue learning the role of HR in economic changes. Later, explore HR strategies to help ensure resiliency.
HR in economic changes: the challenges
From the rising cost of living and operation, to the implications of climate change and COVID-19, we are constantly facing new global challenges. These changes, along with changing employee expectations, make HR’s response certainly more vital than ever.
Changes to consider
Dealing with COVID-19
Impacts of climate change
War in Ukraine
Inflation
Rising cost of living
Increasing operating costs
The Great Resignation
Changing employee expectations
Increased flexible and remote working
Spotlight on wellbeing and DEI
Here are the stats:
How employees are feeling:
78% are worried about losing their jobs
77% report feeling anxious about their financial situation
25% say money worries affect their ability to do their job
How companies are responding:
52% have implemented hiring freezes
62% are focused simply on surviving over the next 6 months
50% of executives are reducing headcount or plan to
These are the business implications
that HR should be aware of.
A shift in financial strategies because:
: Companies shift focus from growth to cash flow and managing costs
Re-entry into ‘survival mode’ because:
Companies must be able to adapt quickly and be resilient
Decreased employee wellbeing because:
Increased tiredness, stress, and inability to concentrate
Pressure on salary increases because:
Employees seek to offset the cost of living by asking for pay rises
Halting hiring because:
Companies may look to reduce costs by pausing hiring
Tightly managing salary increases because:
Businesses have less flexibility to increase reward and compensation
Reducing headcount costs because:
Some organisations may cut headcount to reduce fixed costs
HR and workforce strategies: Four ways HR teams can respond
Manage fixed costs tightly by all means
Try to avoid layoffs of valued employees
Listen to employees with regular pulse surveys
Focus on productivity – pay for performance
Emphasise company values and culture in support of difficult decisions
Be agile and adaptive when navigating problems
Look at ways to boost employee productivity sustainably
Increase total compensation through variable cost incentives
· Use bonuses, stock grants and other incentives to offset lower base
salaries
· Use gift cards and gifts such as company swag as small recognition awards
Consider wellbeing incentives
Offer additional paid time off
Be open and transparent about pay and benefits
Offer flexibility as a financial incentive
Offer increased remote working
· Consider more flexible and hybrid working strategies to attract top
talent
· Can you offer a shorter working week, compressed hours or part time work
· Think about company wide holidays, unpaid sabbaticals and relocation to
lower cost regions
Selective hiring from cost competitive locales
Consider pay advances or pay on demand
· Offer meaningful and worthwhile work to help boost performance and
commitment
Personalise employee experiences
· Improve employee segmentation and create targeted, more tailored
experiences
Adjust management styles to suit different teams
Communicate early and often – be open about company performance
Provide employees with more autonomy in decision making
Create a listening culture: act on feedback, communicate, repeat
Provide stretch assignments and growth opportunities
Ensure work is meaningful and worthwhile
Automate low value or boring work
The role of HR tech
Some HR tech requirements for managing in a down economy
Sophisticated reward and recognition options
Ability to tailor experiences to groups
Pulse surveys including sentiment
Ability to design great hybrid experiences
· End to end automation of core HR processes
· Consistent and accurate data
Analytics that provide actionable insights
· Functionality to support changing global policies and local compliance
Highly configurable and extendable
Supported by vendor customer success teams
Simple and flexible pricing
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[ENDS]
20% of workers would take a 10% pay cut if they had more
flexibility; 56% would trade lower pay for job security –
Prudential 2022
