Strategic HR in Economic & Financial Crisis

Normally after profitable organization sense of economic or financial crisis or hit by one they tend to use the quick easy fix solution to the crisis that was practiced for decades now to reduce costs, we are not questioning this logic and rational thinking in economic and financial crisis so the organization can sustain its exixting and continue performing and delivering to its stakeholder and survive the competition in the market, but we are questioning what organization consider as cost to be cut and reduced and the answer for decades now is people.

Often organization resort in economic and financial crises to calculate costs and cut what they consider as high cost and threat for organization exixting in crisis time, but who make the decision about what count as cost and analyse based on numbers and figures only to make the cut in cost and reduced it often Chief Financial Officer and leaders focus on profit and share price, they identify and analyse the figures and point out to organization leader where, what and when to do the cut in cost, mostly the decision includs the layoff employees which is the golden pieces for quick fix to solve the problem.

What the leaders  and the Chief Financial Officer do not see is that the organization has invested in these employees during their working period and acquired the expertise, skills and appropriate behavior of the work. Most of them are able to contribute to provid solutions to overcome the crisis. The company can exploit their ideas, talents and competencies to reduce costs and persuade them to participate by abandoning certain privileges to overcome the crisis and transfer some of them to work in projects according to their talents and competencies, that will deliver innovative and creative solutions that surpass competitors.

The story of  Honeywell Furloughs struggle is a good example, wither to layof employees or provide unpaid leaves, the employees and leaders decided on unpaid leaves, regardless of some mistakes, the plan worked well for Honeywell and they overcome the crisis and not losing their most valuebale assessts employees.

The difference between the two approaches depends on wither the organization has strategic human resources that establish organization architect structure enabling to change with circumstances and is not rigid, install a system to capture the talents and competencies of employees in different layers of the organization and their potentials, invest and develop them, activate the role of leaders for inspiration, leadership and setting a clear vision and strategy and communicate it to all employees. This is what successful global organization do, leavrage on opportunities in crisis and not shrinking with the threats and miss as other organizations do.