The document discusses managing human resources during economic downturns, emphasizing cost control, flexibility, and adapting to changing job market conditions. Key strategies include effective recruitment, employee retention, and clear communication to maintain morale while also executing layoffs or hiring freezes. It stresses the importance of understanding employee motivations and ensuring that hiring processes are transparent and appealing even in challenging times.

1. MANAGING HUMAN RESOURCES
DURING AN ECONOMIC SLOWDOWN
Anilesh Seth
Co-founder KROW
Ex MD: SUPERVALU, LG Soft India
anileshseth@hotmail.com

2. Agenda
• Today is very different from yesterday
• To dos
• Caselets

3. Today is very different from
yesterday……..
In the backdrop of economic uncertainty:
Cost of skills is rising
Prospective employees are choosy!!
Global roles means global competition
Skills required are constantly evolving
RIF is standard terminology
Mismatch between people losing jobs
and your needs

4. The Employer’s view….
• Shift to Just-for-time
• Flexibility in terms of time/days/location
• Role versatility
• Adaptability to change
• Flatter structures

5. The Employee’s view….
• Work-and-life balance
• Growth opportunities, recognition
• Transparency
• Learning/training: Focus is on “employability”

6. The New Relationship
The new relationship is one of partnering
for a mutually agreed outcome/timeline…..

7. To dos…recruitment
• Word of mouth spreads very fast – especially given social media
• Risk of “reneges” is very high during periods of uncertainty
• Use your referrers as an additional channel to keep the prospects “warm”

8. To dos…retention

10. Tech start up
• Looking for a sales head and • Sourcing: pure play
product architect networking based. Risk of
• Unable to pay competitive renege may be too high with a
salaries head hunter…and expensive
• Not sure where to find • Understand motivation
• Folks unwilling to take the • Understand needs
plunge during a recession • Compensation will need to be
creative: comp, stock, sweat
equity, deferred comp, profit
share in future etc
• Founders’ vision and passion
will be key in selling
• Engage before he/she comes
on board

11. Shutting part of the business
• Unprofitable part of the business to • Use an HR firm to help with the specs
be shut down and shortlisting
• Some of the amount saved will be • Ensure clear and consistent
used to hire other key folks - online messaging about the reasons for
marketing/social media shutting down some offices and the
strategist/content future prospects of the company
• Problem of hiring while letting • The HR firm as well as your own
others go at the same time…..will be interviewers must be well-versed
perceived as risky with these messages
• Not sure where to source the new • The fact that you are making
hires from….specs are not clear investments during a recession is a
• Need to keep the existing business positive
motivated • Use outplacement services to assist
the team that is being let go
• Tie up with a counseling service
• Craft an ongoing communications
strategy for your existing business

12. Budgetary cuts
• Reduced or no annual hikes • Use established industry
• RIF benchmarking to assist with the
• Benefits reduction messaging
• Still need to hire some key roles • Cascaded, consistent communication
followed by an open house to
address questions about the
company’s future
• Enlist outplacement & counseling
agencies to assist with the RIF
• Caution about removing benefits like
insurance and transportation
• Evaluate your training budgets
carefully. Key training programs
should continue
• Negotiate with your vendors
• Keep engaged with the new hires till
they come on board

13. Hiring in a downturn
• Large MNC wants to hire a • Good idea to use an
handful of key roles, established head-hunter to
confidentially source people and to do the
• Best place is to hire from a first “sale” on your behalf
competitor • Consider offering a basket
• The downturn is going to of benefits that include
make it difficult to hire opportunities, future
away...budgets are not comp/rewards, a higher
unlimited role.....”doubling”
compensation is not
necessarily the best way
• Engage the candidate till
he/she joins
• Have a backup plan

14. Preparing to sell the company
• Owners of the company have decided to exit • Confidentiality is key at this stage
the business and are planning to engage a • Need to bring on board the key leaders –
firm to help find a buyer some of who may be impacted. This is a
• The buyer will want to keep existing potential source of leaks
customers and key team members, and will • Have an open conversation with them. Put in
want to minimize the loss of these place attractive time-bound/outcome based
retention plans
• Have a strategy to handle rumors in the
market with a single point of contact to
address queries
• Monitor the pulse – if rumors are getting
large, you need a strategy to handle
expectations within the company without
being dishonest.
• Have a contingency plan in place in the event
of a leak
• Leverage the commitment and trust of your
key leaders to create a communication and
change management plan

15. Acquiring a loss making company
• Loss making organization being by another • Pre-identify the key team members. Consider
one seeking market share retention incentives
• To derive operational efficiencies there will • Clear and consistent communications
be a reduction in force strategy….open and honest Q & A sessions
• The need is to ensure that key team • Keep a single face for the external world to
members do not leave ensure consistent messaging
• Ensure that the existing team understands
how the acquisition is going to benefit the
company and them
• Identify new key roles required in the new
organization – evaluate possibilities of
acquiring team members taking some of
these key positions
• Craft a well-thought through change
management-cum-mentoring strategy. This is
a change for both the acquired as well as the
acquiring

16. Key points
• Timely and honest communication
• Cascaded and consistent communication
• Remember, even if you are not, the outside world
is talking
• “Internal job postings” and “open positions” can
be a potent weapon
• Don’t allow “bench time” to be idle time
• The associate holds the important cards….think
from his/her perspective