Global financial crisis or opportunity

Author John Taya Published 29 June 2009

If you're a glass half full kind of person, the Global Financial Crisis presents a range of opportunities. For human resources managers, it is the time to create the workforce of the future.

Of course criticising human resources departments is a popular pastime for many managers and employees. As a 2005 Fast Company magazine article entitled 'Why we Hate HR' put it: 'HR [is just] an administrative function, forcing management to comply with rules, working on functional programs with no strategic link to business.' This echoes a similar sentiment expressed in a 1981 Harvard Business Review that asserted that while HR may be at the executive table there was no real evidence of real contribution to business success.

But in a March 2009 article of Benchmarking HR the director of an HR and management consultancy argued that HR contributed greatly to business success—and was therefore implicated in business failure. In fact, the remuneration strategies of human resources managers were driving huge losses and destructive behaviour in many organisations. In other words, HR had moved from being of little consequence to businesses to causing some of the great collapses of the Global Financial Crisis—all by responding to the strategic requirements of attracting and retaining people.

The issues of blame and implication in this crisis aside, strategic HR managers will now be focussing on using this quiet time to create their workforces of the future. They know that it is critical to build on their workforce planning, analysing their future demand for talented employees with the right skills. They should be linking their economic forecasting and business strategies with the way in which they develop their people management model.

A close examination of successful HR managers at this time will reveal a commitment to good people practices—from the CEO to the shop floor. Good people work together. It is at this point that human resources department come in to their own as cultivators of organisational culture, working closely with the operational units that drive and implement the various strategies and initiatives.

One key initiative of successful organisations is the graduate recruitment program. The economic downturn with its attendant rising unemployment rate has had a general negative impact on the ability of graduates to find suitable employment. But successful organisations are at a minimum maintaining their graduate recruitment programs, and in some cases are making even more attractive offers to them. Graduates were scarce before the Global Financial Crisis. HR managers know that they will still be just as scarce when the economy stabilises.

An organisation’s strength is its people. HR managers will continue to be faced with difficult decisions in the coming months and even years when determining their workforce capability. While it is often easier to 'let people go' than to continually re-evaluate the budget to avoid redundancies, due attention to the organisation's long-term workforce needs must not be overlooked. Now is the time for HR managers to create the workforce of the future.

www.fastcompany.com

hbr.harvardbusiness.org