In order to navigate through tough economic times, companies need HR practices that protect their most valuable assets—their employees.
Before you can have appropriate HR practices, however, you need to first do some strategic planning.
Whenever companies hear “strategic HR,” they often think it means something that is done way in advance and that’s set in stone. They also view it as something you do when you have the resources to do it.
What they don’t realize, however, is that having a strategy can make all the decisions a company makes on a day-to-day basis much easier.
Strategy can—and should—be modified from time-to-time, as well.
In order to create a strategic plan, your company needs to think about:
- What’s your vision?
- What are your goals?
- What objectives are you trying to reach, from a business perspective and a competitive perspective?
- What is your competitive positioning within your market?
- What are you trying to sell?
- How do you sell it?
- Who do you sell to?
Even in a tough economic situation, if a company has a strategic plan, they should be able to make it through with ease.
It’s also important for companies to make their strategic plan a “working” plan, which means changes should be made as the company grows.
Once you have your basic strategic plan, you can then build your HR practices from it. Your HR practices should be tied to your vision and goals.
Before implementing any HR practices, your company should first discuss the strategic plan. Be sure to bring employees in on the discussions, as well. Say to your employees, “This is the current market challenge we’re trying to address and we’d love to know your thoughts.” Also, if they provide a good, useable idea, be sure to reward them in some way, although the participation in the discussion of company strategy and feeling part of the solution to business challenges can be rewarding in and of itself.
An Example
A company recently called me and said, “I need to lay off 10 people tomorrow.” I asked questions about their business strategy and what types of employees would be affected. Would it be those directly related to generating revenue or those related to administrative functions?
The company reported that they were already fairly lean, with hardly any administrative personnel. Current revenue and the potential for increased business was highly dependent on these people.
It turned out the employer was seeing some decrease in revenue and as a result of general business climate and the fact that many businesses are reporting layoffs, that option rose to the top of the list of actions. Since he only saw things getting worse, he wanted to think ahead and be ready.
I reminded him, however, that he didn’t want to lose his people, because he might need those people to get his company “over the hump” of shortfalls within the business. I told him his people also have the intelligence and knowledge and proven ability to execute their strategy and get the job done.
This discussion resulted in other options related to cost control, salary reductions and an increased emphasis on variable compensation, based on revenue goals. In addition, the company engaged its people with respect to their thoughts and ideas regarding the present economic situation and how it impacted company success. Of all the steps taken, this was most effective in preventing the layoffs and stabilizing the company’s position.
The basis of knowing what your business wants and how people fit into your plan is always a good practice, but in these tough economic times, make tough business decisions, such as layoffs, reductions in salary, etc., easier than they might be if the decisions were made precipitously based on panic rather than on good thought processes and a degree of planning.