HR’s Role During An Economic Crisis

The global pandemic has drastically changed the landscape of our business environment. Companies have faced physical and logistical challenges as many have had to move their workforce online. At the same time, the U.S. has fallen into a recession unlike any other as organizations navigate financial hardships that have led to furloughs and layoffs. Businesses have reported record declines, lost revenues and – in some cases – closed their doors for good. This has required an evolution of HR’s role during this economic crisis, as these professionals provide staffing insight to very difficult business decisions, offer creative problem solving, and manage talent and culture, more than they ever have in the past.

In a Society for Human Resource Management (SHRM) survey from April 2020, 83% of employers indicated that they are adjusting their business practices in light of the pandemic. HR’s role in an economic crisis has caused a shift, as professionals are now tasked with leading many of those changes and creating a culture and environment that supports the transition. This change has allowed human resource professionals to demonstrate skills that have not been relied upon by many companies in the past, and created a focus on minimizing costs while engaging staff during challenging times. In this article, we will highlight several ways in which human resources professionals have pivoted and developed creative approaches to help their organizations weather the storm of the current economic crisis.

Fostering Key Partnerships

First, HR is playing a significant role during this crisis in collaborating and partnering with business leaders to keep the doors open and their employees engaged and productive. As businesses struggle to combat the challenges COVID-19 has presented, many are recognizing how integral HR can be to the health of their business (and the health of their employees), underlining the need for wellness, strong employee relations, and skill-building opportunities.

For some industries, such as healthcare, hospitality, manufacturing, and distribution, remote work is not an option, presenting unique challenges for both HR and employees (such as childcare and home-schooling) that have not been as prevalent in the past. Creativity becomes a necessary skill as HR departments come up with alternatives to the “normal” like we have never seen before, such as providing supervised learning centers for children with remote schooling, alternative shift arrangements, and job sharing. This creativity has allowed employers to both meet their business needs and meet the needs of their employees’ families. For example, KPMG recently launched a learning experience for school-age children, allowing employees to pool with other parents to find educators to guide in-home or virtual learning for small groups of children, ages 5-18. This is just one example of HR professionals pushing the boundaries of creativity and limits in the workplace to meet their employee and employer needs.

Assessing and Addressing Talent Needs

It may be expected that HR’s role during an economic crisis would center around talent. As companies make critical staffing decisions, the evaluation of talent and the use of that talent becomes paramount. During cost-saving conversations, significant efforts must be made to make effective use of staff. This is where HR’s pre-pandemic efforts can come out and shine. The use of performance evaluations and development tools, succession plans, and cross-training measures will allow the company to determine proper furloughs and layoffs that will minimize the impact of staff reductions. The information already compiled on current staff will allow for the proper pivot to fill business needs – not only due to cost-saving measures but to also cover losses due to employee illness, leave of absence, and quarantines.

Managing the Mood

Difficult times become the most integral time to “manage the mood” of the company. The reality of the economic crisis provides the opportunity for both HR and business leaders to rise to the challenge to encourage and embrace a culture open to flexibility, evolution, and giving grace to others. Be aware and stay aware. This is the time to remain transparent in communications on what is happening in the organization, as well as recognizing what is left unknown.

Remember that a reduction in staff levels are always difficult on those left “behind.” Consider the emotions of those who may feel guilty that they were able to remain employed, those who may be emotionally distraught because of illness and death in their lives, those with significant stress due to finances, and those who are struggling to balance child and eldercare issues. Economic challenges always take a toll on employees one way or another and consideration must be made for the mental health of those that are at the heart of the organization to assure a thriving and productive environment. Promote your Employee Assistance Plans (EAPs), take advantage of the co-pay waiver of many health plans for mental health, and provide regular communication to staff on financial offers from local banks and community resources.

In their efforts to meet the mental health needs of their employees, Verizon Media expanded their Mindfulness program to offer alternative resources that help employees manage stress, improve sleep and cope with anxiety, and access to virtual crisis counseling sessions. According to Mental Health America (MHA), the company has also created a platform that features stories from their own staff to start important conversations. Many companies, including Walmart, have expanded their EAPs to include all employees, regardless of their employment status. By emphasizing resources to ease the burden and fears of employees, HR can continue to provide support during this economic crisis.

Use the Slowdown to Your Advantage

In an effort to make the most out of challenging situations, both HR and business leaders can take advantage of this slower pace by picking up and finishing projects that often fall on the backburner. For example, training. Although it may not be financially viable to offer training programs during this time, it can be done if HR professionals use the time to hone in on their training skills and offer self-designed, remote training programs for staff. These could be programs typically outsourced due to time or cost-considerations that can now be produced in-house. Training for employees can be done inexpensively via remote platforms by HR or through the exchange of expertise from internal team members and staff.  Using this strategy, employers can then continue to emphasize the importance of investing in training.

Training is not the only way to utilize the slower times to the business’s advantage. According to a Forbes’s survey, “The Impact of the Coronavirus in the Workplace”, it has become clear that for many organizations COVID has encouraged many to think outside of the norm. Businesses are taking the opportunity to rethink typical processes and assumptions, consider a redefinition of product or design, or perhaps a renewed emphasis on R&D.

It’s no secret – HR’s role in this economic crisis has shifted and grown. The current economic crisis has put pressure on HR professionals and business leaders to do more with less. Businesses across the board are all looking for creative ways to engage their workforce, reinforce productive and positive behavior, retain staff – all while allaying employee fears. Human Resource professionals can and should take this unique opportunity to play a significant role in leading their organization through this national crisis. By while showing their support of the business and its employees through appropriate economic actions, they can support both the organization’s vision/mission and its employees’ health and wellbeing.

Special thanks to Melissa Dern and Patti Dunham, MBA, MA, SPHR, SHRM-SCP, for writing this edition of our Emerging Issues in HR! 

Now more than ever, HR plays an integral role in optimizing your operations during the pandemic. strategic HR, inc. can help with your leadership and HR strategy through COVID-19. For more information, please visit our HR Strategy page, or simply contact us – we’d love to hear from you.