How HR leaders can better support during a recession

The ask of HR leaders during a recession is efficiency. Here’s how to do it.  

It has been a difficult period for HR practitioners.

The last year has seen the debate and management of hybrid work, the changing expectations of employees regarding the nature and purpose of their work, and an incredibly tight talent market.

While these issues continue to be experienced, perhaps the biggest concern for HR leaders at this moment in time is the lingering threat of recession, which looks increasingly likely.

During periods of economic downturn, organisations will be tightening their belts in response to potential losses in revenue, doing “more with less” across all departments. HR leaders will be expected to provide efficiencies in their function, improving results while lowering costs.

Rather than simply pushing employees harder, a more nuanced, human-centred approach to HR practice will aid productivity while supporting your people. To ready your team for the impact of a recession, practitioners should prepare early, using these three key strategies:

1. Consult and set clear priorities

With restricted budgets, there is a renewed focus on the effectiveness of every role within the organisation. Business structures and areas of underperformance also need to be identified and addressed.

HR leaders can ascertain performance by proactively conducting internal audits of job responsibilities and department workflows. Meaningful consultation with staff is key here to understand what’s driving, or hindering, workplace effectiveness.  

If employees are not made aware of the importance and value of their work, or its impact on business goals, productivity is affected. Likewise, if team members spend hours on tasks that have been previously mandated but are no longer useful, both efficiency and morale suffer.

Through initiating open, honest conversations with all levels of the business, HR leaders can create more streamlined teams and functions and ensure staff feel motivated and secure in their roles.

2. Save time with tech

There are several artificial technology (AI) and machine learning platforms that can reduce the load on HR departments, which not only allows managers to dedicate more time to high-value strategic work but also improves the digital capabilities of the team.

Taking the time to understand the full capabilities of these platforms gives practitioners the ability to share this knowledge, increasing the use of these technologies across the organisation. At a time when businesses are doubling down on efficiency, getting more bang for your buck on capital expenditure is key.

Gartner research shows that more than 70 per cent of the HR budget is spent on technology vendor expenses, while only 34 per cent of staff reported using these tools – and it’s important to understand why.

Fear of change, a lack of perceived value, or poor training could be impacting usage. Through working with teams to understand and overcome potential hurdles, HR leaders can support skills development – aiding in retention – while improving return on investment.

3. Prioritise essential skills

A competitive talent market has made filling positions tricky for quite a while now, and the heat remains. With a glut of roles for skilled professionals to choose from, organisations have increased salaries to improve attraction, and employees now expect higher compensation, compounded by the rising cost of living.

During recessionary periods, organisations look to tighten operational costs, which makes hiring even more difficult, requiring a careful balance of expertise and expenditure.

Under these conditions, HR practice needs to prioritise the talent that is necessary to lead progress and growth. To do this, leaders should assess the current capabilities of each team and identify the gaps, keeping in mind the critical skills that will best serve the organisation.

This approach also widens the talent pool; by focusing on knowledge and ability rather than just experience, HR leaders improve their recruitment prospects.

No matter the likelihood of recession, these three actions will greatly improve HR efficiency and outcomes and set up organisations for success in the year ahead.

Arj Bagga is the director of HR advisory and performance and total rewards practice leader at Gartner.