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Denis Barnard

Greenriver Technology World Ltd

Director

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Is your HR department ready for the economic upturn?

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The Institute of Chartered Accountants has predicted the UK economy will grow by 0.5% in the third quarter, sparking reports Britain is coming out of recession. Denis Barnard asks, is your HR department ready for the good times?

According to the Institute of Chartered Accountants, which recently surveyed 1,000 chartered accountants across the UK, business confidence rose to +4.8 at the end of June, from -28.2 in March, the biggest rise for two years. The results were so promising it prompted the institute’s chief executive Michael Izza to say: "This quarter’s Business Confidence Monitor suggests that the UK recession is at an end."
 
The time to prepare for a recovery is just before the recession starts to bottom out. If the last recession was anything to go by, the official ‘all clear’ came eight to 21 months after the recession actually ended. Now is the time to act, but what are the implications for HR professionals who, for the last few years, have been more caught up in redundancies than recruitment?
 
In an ideal world, of course, the recession shouldn’t have made a difference to organisational behaviour. You should have been doing the right things all the time: keeping a handle on unnecessary and irrelevant expenditure, not over-hiring, concentrating on getting the product or service right along with the marketing and selling and, above all, listening to customers.
 
If you were doing everything right all the time, the only way you would have noticed the downturn would have been through fewer orders, payment being slower, and rivals screaming in pain from the result of their excesses in good times. But, back in the real world, many HR departments are being asked to cope with the ongoing effects of a grinding recession while simultaneously being asked to get ready for a recovery.
 

Use the downtime to streamline

 
While other HR departments are whining about the recession, make the most of the downturn to fine tune your operation. Now is the time to trim your sails, streamline and optimise your HR department and set in place best practice for the future. If your organisation had to make redundancies during the recession, consider why you became overstaffed in the first place. Was it a failure to deliver the right goods and services? Did hiring managers fail to pay sufficient attention to the business case for each new hire?
 
If you want to look at a major culprit in these scenarios, blame the absurd way many headcount budgets are operated: recruitment freezes bypassed by temps or contractors, frozen posts and posts that no longer exist in reality that generate budget surpluses in various functions.
 
In other words, the whole paraphernalia associated with personal empires, budget-massaging and all the associated counter-productive activity. Be firm and make sure you are backed up by strong management.
 

Value the good staff, let the bad go

 
Nothing is going to kick-start your post-recession phase more than the right messages from the apex of the organisation. These have been tough times, and now is the time to take a reading of staff morale. Take my word for it, many of your employees may currently have a foot in the door – the minute other businesses start hiring, they’ll be gone and you’ll have to spend even more money finding and training new workers.
 
If that worker is dead wood then there’s no problem, but don’t lose talented staff because you have failed to value them in tough times. Work isn’t about the money. In the new climate, organisations must start being honest with their workforce, take responsibility for ensuring that they are managed fairly and consistently, and that all employees understand the importance of their job, and how it interacts with other jobs and departments in the organisation.
 

Making the most of what’s out there

 
In the past year, many retailers have trimmed inventories and staff. While that’s not necessarily a bad thing, you also don’t want to be caught short with outdated products or too few staff on the checkout.
 
You don’t want customer loyalty to be yet another casualty of the recession. Hiring might not be on the cards, but there is a great deal of talent languishing in the dole queue. Think about taking on promising students or interns you can train now and possibly hire later. Or you can tap into the millions of unemployed, many of whom are looking to be retrained in new industries.
 
HR practitioners have also been very slow at getting the most from their social networking. Joining sites such as LinkedIn and HRzone.co.uk is good, and joining the many HR groups and discussions within them is even better. This will be a key area of practitioners’ continuing professional development when the good times return.
 

Renegotiate deals

 
This is a great time to renegotiate. Whether it’s with your software vendor, IT supplier or even stationery outfit, everything’s on the table. The better the terms you get now, the sooner you’ll be able to rebound. Don’t think about requirements now; try to determine what you’ll need when business picks up. Is your company car fleet on its last legs, office furniture threadbare?
 
Now is the ideal time to strike a great deal with software vendors. If there’s something we can do in HR, it’s to use more technology to assist us. As a profession we have lagged behind other service functions such as finance and IT for too long. Important steps can include reviewing our HR software to ensure it is fit for purpose (without all those messy work-arounds), checking reports are meaningful and accurate, and we are getting the most out of our systems. If it’s not doing the job – and cannot do the job – then change it. That means spending money, so be sure of your business case – the good times aren’t here just yet.
 
 
Denis W Barnard is the CEO of HRcomparison.com, the UK’s first HRIS comparison website
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Denis Barnard

Director

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