Author : Maria J. Richardson
It is possible to identify three strands of argument in the literature as to the effects of the current recession in the Human Resources function. The first suggests that the recession will have a cataclysmic effect on the HR function or even on the viability of long prevalent employment models, with one study suggesting that numbers of professionals working in HR would be cut disproportionately compared to other support functions. Whilst ‘transactional’ HR processes, could increasingly be relocated to low-cost countries (Asia/Africa) and the worldwide crisis of the ongoing globalization of businesses would ‘decimate HR’.
The second (which is dominant among my network of HR Professionals) suggests that the recession is increasing the status and influence of HR which deepens the appeal and prevalence of HR practices. The third strand, often grounded in empirical reviews, is much more measured and circumspect regarding whether changes arising from the recession are fundamental or likely to be of lasting significance to HR teams. In this strand of observations, changes are often understood to be pragmatic, eclectic and incremental in nature.
There is already enough evidence out there suggesting that organisations are moving their administrative and low value adding HR services to more cost effective companies, even if these companies are located overseas.
An example is Lloyds Banking Group (LBG) UK which announced earlier this year that it plans to outsource the administration of the HBOS final salary pension scheme to Towers Watson. Employees working in the ‘information line’ team are immediately at risk of redundancy and hundreds more employees throughout the UK will have to go through a selection process for the remaining HR jobs. The workforce is reduced by around 15% and other changes were also announced which will lead to the loss of over 250 HR jobs. (I find it funny that there are a variety of HR vacancies being advertised, whilst these HR jobs advertised do not seem to have been changed? Recruitment in such times should be stopped, no?)
There also has been much debate as to whether recessions lead to transient, if otherwise significant changes, or caused profound and lasting disjuncture’s in the ways firms manage Human Resources and relate to trade unions. A case can be made that recessions to date – and especially the deep and prolonged recession of the 1980s to early 1990s – has had more sustained impacts on employment relations through their influence on macro-level developments in institutions and arrangements, than on micro-level engagement between employers, employees and trade unions in firms and workplaces as today.
For the last couple of decades, businesses have also been trying to force the need for line managers to take on more HR responsibilities. However, in practice, whilst savvy HR databases have been put into place, only few companies have been able to boost real returns and cost savings. There is every reason to believe (I do), that over the next years this view of moving HR responsibilities to line managers will indeed take place, cutting HR business costs as planned. Once can expect that this will further reduce the reliance on dedicated HR staff to take on the people management duties of line managers.
The operational and strategic HR contributors, that do remain within the HR function and provide HR support consistent with the ‘high-commitment model’, will certainly start gaining more confidence and trust.
Commitment from HR teams is not perfect, in particular, when you ponder over business goals and strategic interests. It’s extremely hard for a company to achieve maximum profits and efficiency if it takes to heart the loyalty and interests of its employees. This particularly issue may impact the needs of the organisation as it is likely to undermine internal HR issues due to such competitive or recessionary conditions. For example: an organisation has to consider its survival first and the HR functional image of caring for the needs and security of its employees, gets a hit after that organisation has to terminate employees! Which may or will likely lead to HR losing their great brand/employee image at some point.
For those searching in vain for transactional HR jobs, this is the one area where skills are transferable to other functions, across industries. For those looking for new operational and strategic jobs, there is always merit in looking at other similar opportunities. Some statistics suggest that HR professionals are less likely to consider being entrepreneurs.
This can limit your options, so make sure there is a good reason why you would not explore a career in running your own business. Try it before you reject it because you will be surprised at how a lot of HR businesses do not require the kind of capital investment that some other businesses require. This also means that the returns can be high if you get it right.
Meanwhile, let’s remind ourselves of the advice HR normally give employees:
- Don’t feel sorry for yourself. There’s always something you can do.
- Don’t rush into another job too soon. Use your time to think about what you really want and don’t want.
- If you want to do something different, go for it. Don’t be put off by re-training. It’s an experience in itself.
- Give yourself a break if you need one. Ask for help and support – and allow yourself to feel sad.
- Ask yourself if you would benefit from a re-evaluation of your values and needs.
- Talk to your HR network as they hold the power over the job!