Warren Buffett declared it: this “is an economic war.” He likened our current situation to WWII. If you work in human resources as a recruiter, trainer, and/or diversity expert, that puts you squarely on the front lines. After several happy years of growth — including a marked increase in upper management’s appreciation for the “employer of choice” and employee engagement concepts — the battle of retrenchment is engaged.
Not only are companies reducing the size of their workforce, they are cutting back on everything related to HR: recruiting, training, and development; recognition efforts; and any other kind of employee engagement program. A recent Vault survey of corporate recruitment professionals showed that more than a third of human resource departments are experiencing layoffs. Sixteen percent of respondents said the cuts affected more than 25 percent of the HR staff.
The last thing the HR community needed was last month’s cruise missile launched by Rutgers professor Richard Beatty. The academic blasted the human resources profession for working without useful analytics, and contributing so little that “typical human resources activities have no relevance to an organization’s success.” The article’s title was a blow by itself: “Memo to CFO’s: Don’t Trust HR.”
One veteran HR colleague acknowledged that there are plenty of inadequate HR people out there, just as there are weak CFOs and accounting folks. At the same time, she reminded me that there have been plenty of studies linking employee engagement to higher productivity and revenue growth (though she acknowledged that proving a causal effect is more difficult than merely linking the two). At this point, it shouldn’t be necessary to prove that engagement has value all the way to the bottom line. Unfortunately, it still has not sunk in for many executives.
Full disclosure: I am a CEO who was skeptical of HR as a young manager, but became absolutely convinced of its importance as the engine of a big organization’s hiring, appraisal, and development processes. HR can be at its worst when managing the mundane, bureaucratic necessities of a company’s workforce but when HR is seen as business partner and change agent, the role becomes critical — as important as running a finance division. Yes, I do put the HR leader at the same level as the CFO in a large organization.
If you are an HR decision-maker whose company leadership doesn’t share my perspective, here’s how to fight back.
Make sure you are measuring employee satisfaction and employee engagement. You have access to your company’s employees, and knowing where they stand is more important than ever in a downsized environment. If you already have the measurements, make sure you are using them to drive awareness and action in your company’s C-suite.
Communicate the efforts of your team with the CEO and the CFO — along with other top leaders — and communicate the value proposition (ROI) of satisfaction and engagement. It’s not only about retention (which company leaders may be lackadaisical about, given the job market); it is about performance. Chances are good your company is asking more of employees nowadays; their level of engagement is critical to meeting productivity goals. Bottom line: you have to fight a tendency of top management to take surviving employees for granted in this environment.
And look, if you’re an HR leader, you’re probably are going to have to make some cuts yourself — if you haven’t already — to keep in line with the times. You have to step up and make contributions to cost-cutting pressures, while also demonstrating the clear value HR can play in helping to retain company stars, identify and eliminate the hopeless, and manage the productive and tactical engagement of the rest. Staying focused on these kinds of initiatives will position you as an MVP in your organization. Counterintuitively, recruiting is vital even in times like these because the quality of your company’s personnel will be the key to thriving through the recession and outmaneuvering the competition.
Still, this is not a time when anyone in your organization is going to be eager for training, performance evaluations, and the like. “We have ‘real’ work to do,” is the refrain from the corner office to the rank-and-file. Yet training managers is more important than usual given the current churn at most companies. (As we all know, bad managers are the #1 reason people leave an organization.) Now more than ever, it’s critical for HR advocates to market the value propositions behind HR activities. Best practices which have become normal routines (inertia?) will not cut it in this environment. Everyone is feeling enormous pressure, and HR activities that feel bureaucratic will be targeted unless you re-sell the benefits upfront.
Metrics matter now more than ever so be tracking key deliverables such as time-to-fill, average tenure, tenure by diversity category, and tenure by age demographic.
Finally, if you are among the unlucky who have found themselves out of work, here are some suggestions for getting back into the game: