2. The difficult road ahead…
The intent of the HR function is to align with business needs and
enable the human capital within the organization to provide
sustainable competitive advantage by sourcing, nurturing and
maximizing potential.
In difficult times, like a global economic slowdown, it is imperative
for the HR function to respond to challenges not anticipated afore.
Businesses, in these times are beset with the need to enhance
operational efficiency, enable cost optimization and even evaluate
competing strategic choices.
HR can indeed play a pivotal role in responding to these new
challenges by recognizing the likely impact of the environment on
business, to proactively take decisive action and reassess the focus
areas that require attention. On the difficult road ahead, some
thoughts are shared on how HR can make a difference across the
value chain.
Page 2
3. The economic scenario presents a unique set of
challenges for HR…
Business challenges HR challenges
• The Rising Cost of Capital – • Rightsizing the organization and global
underperforming investments, reduced mandate to freeze hiring
access to capital, liquidity crunch • Preparing the organization to
• Falling consumer confidence – falling proactively handle people crises
consumer spending, customer’s • Low availability of skills and talent to
inability to pay handle changing business environment
• Inflationary concerns – impact of rising • Harnessing leadership capabilities
energy and other input costs which will drive companies out of
• Pressure on margins recession
• Decreased equity valuations – • Balancing employee salary expectations
fluctuation in the capital markets and and business costs
reduction in market capitalization • Stagnation/drop in employee
• Uncertainty in political and employment productivity
environment • Falling employee engagement levels
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4. The Evolving HR Mandate
HR Building Blocks
HR Strategy Organization Workforce Talent Delivery of Employee
Design Planning Management Talent Engagement &
System Management Communication
System
HR Strategy and Policy Formulation Execution of Talent Strategy
HR Imperatives
HR strategies Organizations need to be Identifying, Preserving the fabric of the
need to adapt to designed for agility and Developing and organization through
the market flexibility Rewarding high sustained employee
conditions performers in a engagement and regular
underperforming communication
market is the key
Successful management of downturn though HR Optimization
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5. HR strategies need to adapt to the market
conditions…
Key Issues Key Action Steps
• Slowing demand creating top line • HR strategy to reflect the new cost
pressures for business focused business strategy
• Businesses looking at reduced HR • Implement high impact HR
budgets as a cost management Interventions and prioritize
strategy expenditure
• Preparing business case for continuing • Account for HR costs on people
investment in HR programs programs and tie them to financial
returns
• Evaluate automation / outsourcing of
certain HR functions
Focus on: HR Strategy, In sourcing & outsourcing models for workforce
and investment in HR Technologies
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6. Organizations need to be designed for greater
agility & flexibility
Key Issues Key Action Steps
• Underleveraged synergies due to a • Restructure the organization in
structure that may have been designed order to adapt to the new business
for rapid growth and expansion environment
• Underutilized resources due to a • Realign reporting relationships and
economic slowdown delegation of authority for swift
decision making
• Slow response time of the organization • Review of workforce planning as per
to changing external environment changed business projections
• Pressures to reassess workforce • Examine alternatives such as
strength redeployment/planned sabbaticals/
job sharing/ rightsizing
Focus on: Build organization structure to manage efficiency and speed
rather than scale
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7. Identifying, Developing & Rewarding high performers
in an underperforming market is the key…
Key Issues Key Action Steps
• Low availability of critical skills and • Identify critical skill sets and develop a
talent to manage a challenging focused talent retention and
business environment development program
• Building and maintaining a robust • Identify high potential employees and
leadership pipeline focus on strengthening their
• Developing new competencies and capabilities
skill sets deemed critical to the • Create a fungible workforce to enable
changing economic and business quick re-deployment
scenario • Drive a performance oriented culture
• Realigning and restructuring salary / • Enhance linkage between individual
employee cost performance and variable pay
Focus on: Identify, Develop and Reward high potential talent, to
institutionalize a Performance Oriented Culture
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8. …while preserving the fabric of the organization
Key Issues Key Action Steps
• Managing anxiety among employees • Evolve a two way communication strategy
• Driving greater sense of ownership, to keep all employees and stakeholders
responsibility and accountability among updated about the business objectives
employees • Encourage an organizational culture that
• Falling employee engagement levels embraces learning and holds managers
leading to reduced productivity and employees accountable for the results
• Managing expectations during the • Asses employee engagement levels and
rightsizing process drive innovative employee engagement
practices
• Retaining the employer brand
• Engage in a Corporate Employer Branding
exercise to reach a broad array of
audiences
Focus on: Sustained Employee Engagement Activities & Employee
Communication
Page 8
9. Human Capital
Human Capital India has a competent team of Human Resources
Professionals with consulting experience straddling multiple industry
sectors and geographies. The team has partnered numerous business
leaders to define HR strategies and manage their workforce
functions.
NS Rajan
Partner, Human Capital
ns.rajan@in.ey.com