All major companies recognize the vital role human resources play in business operations and expansion programs. Paradoxically, in times of recession manpower is the first casualty. In the present conditions of financial and economic crisis, several companies are effecting large-scale job cuts to stay afloat. Experts in Human Resources Management feel that these layoffs may actually prove counterproductive.
Most economic problems start from a slump in demand for various types of goods and services. Production has to be slashed to save resources from being locked in excessive stocks. Low sales reduce profits or even bring losses. Layoffs may reduce costs, but they also reduce demand further as people’s earnings and salaries disappear or decline. The best way to revive demand is, as Obama said in one of his speeches, “to put money in people’s pockets.”
Human resource management functions can help corporate as well as the economy at large. Some of these functions are briefly stated below:
Instead of resorting to large-scale layoffs, the companies should put on hold flesh recruitment till the clouds of recession clear. They should use the existing staff for additional assignments after giving them proper training.
Perks of executives should be capped. Benefits like leave encashment, bonuses may be replaced by rewards in kind, like allotment of shares on a subsidized basis, and other long-term benefits.
On-the-job trainings should be preferred to other expensive methods of training.
Human resources are the back-bone of any business organization. They need to be nurtured properly and given an atmosphere of confidence, because other companies are always on the look out for experienced, talented and efficient persons. A transparent system of employment and retention techniques must never be overlooked even in times of difficulty.
It is an established fact that motivated and dedicated staff can work wonders for an organization. The companies which value staff and resort to other cost-cutting measures like proper management of other resources, and review their marketing, pricing and other strategies instead of giving pink slips to staff will be much better off when things turn around.