Economic Downturns: This is the time for HR to get busy!

This is not the best of time both at home (Nigeria) and globally. On the global stage,
the news is dismal. Patterns of economic data are showing signs of weakness. There
are gale of lay-offs sweeping across various sectors of the economy,(Microsoft just
announced its plans to slash 5,000 jobs as part of a $1.5 billion cutback in
spending.), declining value of the dollar on the world stage, and several other
economic data show that things are going south. At home in Nigeria, the news is
more dismal. The current economic downturn in Nigeria as a result of some of these
factors - falling crude oil prices, dwindling value of the Naira (Nigeria Currency),
rising infation, high running costs, staff retention, labour agitations for salary
review and the father of all, petroleum sector deregulation are putting significant
pressure on many organizations.
Nigerias economy no doubt is in crisis. Oil prices have gone down by over 60%,
exchange rates have spiked to an all-time high of almost N350/$ in the parallel
market from around N170/$ previously, unemployment is nearing 30% and infation
is skyrocketing to around 14%. In the last two weeks, over 2000 employees in
various banks have been laid off in a bid to cut cost and remain in business. As at
Friday last week, the federal government of Nigeria directed banks, insurance and
financial institutions to suspend the ongoing retrenchment in the sector. An
economic downturn like this is an important time for HR to assist in executing
business strategy. In fact, this is the time for HR to get busy! Not a few businesses
are challenged with meeting overheads and have had to adjust by way of cost
cutting, readjusting priorities and rightsizing organizational productivity relative to
declining income streams.
So, regardless of whether or not your business has been affected thus far, HR
professionals should begin to look at measures that they can bring forward to help
ensure the health of the business and its staff during this period. Major shifts in
economic conditions always should alert HR professionals that circumstances have
changed and that they play a lead strategic role in minimizing a companys risk
during periods of economic turbulence.
One of the major and immediate actions for HR professionals/managers at this time
is to assess their organizations human resources management capability by means
of Strategic Human Resources Management Audit. The Strategic HR Audit approach
looks beyond the internal operations of the HR function. It assesses HR activity
against alignment and contribution to organizational strategy and goals, as well as
the prevailing culture, thus forcing HR audit to move beyond legal compliance of HR
practices. The following will serve as a baseline for being prepared to discuss
changing business issues with senior management.

Review plans for implementation of a new program, initiative, or expansion of

business to determine whether the timing is on target or whether to defer
action.

Participate in cross discipline review of all business practices to evaluate

internal business processes in the event of neutral or declining revenue
periods

Review recruitment practices to determine if recruitment efforts should be

suspended, retargeted, or frozen.

Take a look at your contingent hiring practices- need for independent

contractors, temporary employees, and/ or interns. You may also introduce
summer help.

Meet with senior management to determine current staffing versus budget,

discuss reductions in overtime and or staff.

Review possible changes

associated travel costs

For outsourced services, review contractual obligations to evaluate whether

these should be continued, amended or terminated.

Review current workforce practices. If business conditions are forecasted to

deteriorate, consider reduction or elimination of business travel expenses, job
sharing to retain talent, scheduled hour reductions, telecommuting to reduce
facility costs, or suspension of special pay arrangement that are not legally
mandated.

Concurrently, plan how HR can best offer free community or other low-cost
resources or company-provided initiatives that can be brought to bear to help
current staff weather their own financial issues.

to

training

and

development

budgets

and

No doubt this is the time for HR professionals to get busier than before. It is
the responsibilities of Human Resources professionals at this period of
economic turbulence to help their organizations become more nimble in
adapting to change. What you do today as HR manager, will position your
organization to look smart as business situation improve or if you fail to do
nothing, you may be playing catch-up to your competitors who are more
agile.
Looking to initiate measures that can help you become agile and resilience to
perform effectively in this turbulent times? Insel Consulting Business Process Reengineering/ Change Management Services will help you better align your business

so that your organization can become more agile. Click here to learn more or email
adedoyin@inselconsulting.com