Hunkering down

Managing human resources in tough times

Fred Mael

No new hiring. Freezing wages. Layoffs. Logical or not, these are management’s typical responses to dealing with employees (aka talent or human resources) during economic downturns. They are all variations of holding the line, hunkering down – different ways of saying that you will try to muddle through with a lean team until things get better. Other human resources concerns will have to take a back seat for now.

Although you may prefer or feel compelled to ignore people issues and focus on marketing and finances, life goes on. Individual needs, interpersonal dynamics, and even the culture of your company or organization will continue to evolve, especially when stress levels are high. There will be shifts in behavior and expectations that you need to attend to before they become problems that demand your attention. These are some of the areas that you would do well to monitor.

Promotions. No changes in staffing means that some of those who were expecting (or were promised) promotions will not get them. Not only will wage increase expectations not be met, but increased responsibility and visibility will also be deferred. This will happen in part because senior employees cannot afford to retire or move on, and because the natural turnover of all employees may be more limited. Those employees whose promotions have been deferred may become frustrated and chafe at being held back or managed closely by those they were ready to replace or eclipse. While some will understand the situation and bide their time, others will start looking for alternatives. You may need to think creatively about how to give them more responsibility and autonomy, such as by assigning them special projects, making them members of task forces, or increasing their client contact.
Retention. One would think that retention would be a dead issue during an economic downturn. As unemployment goes up, aren’t all employees going to play it safe and stay where they are? Everyone “knows” that being new to another company makes one vulnerable to be laid off first. Besides, isn’t everyone else in hiring freeze mode as well?

The answer is no. Some companies and work organizations in some sectors are still thriving. Many companies will always make room for someone exceptionally talented or for those having a unique skill not yet found in their company. If you are not dealing with the causes of dissatisfaction in your company and if the atmosphere is toxic, expect your most capable and most mobile employees to continue to be recruited and enticed to leave.

If you are working in the nonprofit arena, you need to retain paying members, and they may see membership in your organization as discretionary spending they can no longer justify. You may have to make a better case for your organization as a prime recipient of others’ money and loyalty. If you use volunteers, you may need to expend more effort to recruit and retain them as well. Both contributions to and volunteering for nonprofit organizations tends to go down during periods of economic uncertainty. You may have to fight harder to recruit and retain volunteers and address their dissatisfactions with working for your organization.

Dispute resolution. When managers and subordinates or coworkers are at odds, sometimes personally as well as professionally, there is usually the option that one will leave or be reassigned within the organization. When most people start playing it safe because of economic anxiety, they are less likely to leave. That means that the warring individuals or factions are stuck with each other, which can turn disputes into psychologically bloody wars of attrition. As a business owner or senior manager, you may hate to get involved in squabbles, but you cannot ignore what fighting and taking sides does to morale and to the culture of your company.
Applicants. As other organizations suffer, they will be laying off employees and some will even go out of business. If you are doing well enough, you can expect a surge of applicants for positions in your company. You may feel besieged and unable to reply to all the requests in a calm manner. Eventually, you may start to see the applicants as hounding and nagging you just by inquiring. You may come to view them as pathetic, leading you to justify ignoring them or otherwise disposing of them. However, you might want to rethink that approach because these applicants may be potential employees when things improve, or your potential or current customers right now. Even a form letter stating that you have no openings would leave people with a mildly decent opinion of you. Take the time to figure out how you will respond to job applicants as well as other vendors seeking to do business with you, and put a process in place.
Stress. When times are tough, companies are short staffed, and people are nervous about their jobs, some will be pressed into working very long hours. Others will get nervous about their insufficient billable hours or clients, or their lack of work, and will cope by working all the time. While it is true that everyone may need to pitch in more during difficult periods, obsessive sitting in the office for many hours or worrying does not help them or you. Your role needs to include communicating clearly the message that people’s jobs are safe (if they are) and where specific extra effort or improvements are needed (if they are not). Now more than ever, you need to model some degree of work-life balance and dispute the notion that all-work all-the-time will be either the individual’s or the company’s solution.

Fred Mael, PhD, helps organizations and their employees work more effectively, and coaches executives and managers. This article appeared originally in the April 2009 issue of Baltimore SmartCEO and Washington SmartCEO magazine.