With millions of people infected with the coronavirus globally, countries have gone through multiple seconds and third waves of COVID-19 reinfections and lock-downs.
Business operations that fall under what is deemed as “non-essential” have shuttered due to the severe loss of revenue for these companies and a loss of growth in the global economy.
In fact, terms like “recession”, “COVID 19 recession” have broken out on Google and international agencies such as the International Monetary Fund have termed this pandemic the “Worst Economic Downturn since the Great Depression”.
Without a doubt, the world is entrenched in global recession that could last for years, the likes of which millennials and Gen Zs have never experienced before. If companies want to come out of the recession alive, it is necessary to do everything to prepare for an effective recovery.
Why what happens in a post-virus economy will be a huge HR concern
HR is in the position of connecting employees to the company. With the exception of leadership, it is perhaps the department with the clearest overview of the entire company’s processes and how it fits within the context of the existing organisational structure.
HR plays an important role in managing the company budget that goes into employee welfare, and workforce management. With the incoming recession, all of these processes are likely to be affected. Given HR’s unique position in the company, they will likely be at the front-line of mitigating the impacts of the recession.
HR challenges in a global recession
In general, there are 2 key issues that HR managers will need to look out for. Firstly, that would be managing the hiring needs of the organisation, where HR managers have to balance between reducing talent acquisition costs and the opportunity cost of instrumenting a freeze on hiring new employees.
The other issue that HR managers have to now urgently deal with is implementing change management initiatives to combat the loss of revenue due to reduced consumer spending from a long drawn recession.
Managing staffing and hiring needs with tight budgetary controls
The COVID-19 induced problem when it comes to hiring
In most common cases, hiring becomes one of the lowest priorities during a recession with many companies on a hiring freeze. However, companies might have already set in motion a hiring plan that is too costly to terminate or the candidates they are looking for are key employers that are essential to their business services. With the exponential risk of coronavirus infections, regular face to face interviews would be ill advised.
As COVID infections rise, experts predict that COVID-19 will last beyond 2021. The continued rise in the number of coronavirus cases even in containment in Singapore confirms this will be a long battle and employers will have to be prudent with any new hiring activities.
Hiring in a pandemic
It is important now that HR managers must start incorporating digital tools to digitise their hiring processes. If most manual processes can be easily automated today with some help, from test-taking to interviews to contract signing, there is little reason as to why companies should delay digitising their hiring process any further. This is especially true with the rise of telecommunication software over the years such as Skype, Google Hangouts and Zoom.
Job advertisements will need to be crafted cogently with a clearly defined job specification for how any work will be conducted during the COVID lockdown as well as after. HR managers may also have to rethink their onboarding plan for new hires, focusing on introducing employees to the company’s remote working environment.
Hiring after the pandemic
With notable successes in digital transformation, some business owners report that they intend to cut down on business travel as remote meetings take its place once COVID-19 blows over. This could also apply to the digital hiring processes that HR managers will be implementing.
Using a digitalised approach to hiring, it is likely that HR managers will be able to trim spent on scheduling, assessing and hiring new employees using the help of technology. Not only can digitising the hiring process help during the pandemic, it might also prove as an invaluable and sustainable process that will be adopted even after COVID-19.
Implementing change management initiatives
#1 Reviewing internal operations to reduce costs
With most businesses experiencing reduced revenue, reviewing internal operations to keep costs proportional to the revenue is the logical step for companies to take. This is where HR practitioners should step in as the impartial judge to review the performance of manpower projects the company is involved in. By comparing productivity, compensation, cost incurred and revenue generated, to name a few, HR professionals are able to measure the relative performance of projects their companies are undertaking. They are then able to recommend to management which areas of the business to reduce operating costs.
#2 Restructuring internal operations (Downsizing)
One of the first words that come to mind when mentioning cutting cost in a recession is downsizing. Downsizing means reducing the number of employees in order to reduce salary costs. While it is a necessary evil, this is a sentiment not shared by employees who lose their jobs at the worst period of the economy. In addition, firms that aggressively layoff employees often gain a poor reputation causing them to experience issues with hiring and retaining talents when the economy turns around.
#3 Restructuring internal operations (Redeployment)
As an alternative to downsizing, companies can consider reallocation of resources. An example would be Singapore Airlines, which redeployed cabin crew that had their flights grounded to serve as care ambassadors at local hospitals. Not only does this ensure that employees stay productive with reduced business operations, it also allows businesses to focus on operations that require more attention during the COVID induced recession. Compared to #2 Downsizing, redeployment is perceived by the public as something that a responsible employer would do to help its employees stay employed for longer. This puts Singapore Airlines’ employer brand in a good light and it inspires staff confidence and ensures employee loyalty once the airline industry picks up.
#4 Restructuring internal operations (Outsourcing)
Another strategy to consider would be outsourcing. With the hiring freeze, businesses might deem hiring project based employees on a permanent basis within the corporate function a costlier necessity. With the investments required to hire, onboard and train employees, businesses could instead look into outsourcing their current business processes to companies who have the experience and a track record of managing business operations on their behalf. This reduces the uncertainty or any associated hiring risks a new employee may bring while ensuring that a non-core function business can still run smoothly when being handled by an experienced co-employer.
#5 Restructuring internal operations (Automation)
With COVID fast forwarding companies’ digital transformation, this next strategy shouldn’t come as a surprise. Through automation, companies are able to reduce the man hours spent on repetitive tasks. This can be done with cloud computing software that is designed for digitising business operations such as Salesforce or Amazon AWS. Although they might appear costly, managers should remember that this is an investment that will help them scale up their businesses in the long run. In fact, many software as a service (SaaS) companies are reducing the prices of their products to help businesses with their digital transformation during COVID.
HR Managers have a tough challenge this global recession
In light of this pandemic recession, HR managers have to be creative in their strategies, balancing the company's needs as well as employees' benefits. To mitigate its impacts, making the decision to permanently integrate digital technology with current business processes will be an asset with long lasting effects that succeed beyond the recession.
If you are considering recruitment or business process outsourcing, feel free to reach out to us at BGC Group to find out more about our full-service HR solutions. We are a recruitment and HR outsourcing agency that has helped more than 100,000 job seekers in Singapore find rewarding careers with employers in the technology, finance and healthcare sectors.