HR's report card 2009: working hard and showing improvement
Everybody knew that 2009 was going to be grim, but did HR rise to the challenges posed? Guy Sheppard asks the experts to give their end-of-term reports on a profession reschooling for recovery.
At the beginning of this year, three acknowledged UK
experts from the worlds of academia, economics and
workplace policy gave their views about how HR
should cope with 2009. The economy was then in crisis
and, for many in the profession, the need for short-term sur
vival could have overridden their belief in tried and trusted
practices. The experts warned against this, predicting the
recession could be a great opportunity for HR to shine.
Nearly a year later, with the worst of the downturn
apparently over, their verdicts on HR’s performance are
generally positive.
Nick Holley, executive director of Henley Business
School’s HR Centre of Excellence, has completed six
months’ research into how the recession has impacted on
the profession, and what support it should give business
during a recession.
Lessons not learned
He found the most depressing part of interviews con
ducted among a cross-section of 25 organisations was
how little they had learned from the previous recession.
“There were a number of people who found the question
a revelation; they were so busy that they had not stopped
to reflect,” he says.
Holley believes a core characteristic differentiating the
HR functions that have responded well to the recession is
“the ability to learn and constantly move forward rather
than repeat mistakes again and again”. Other character
istics include flexibility in the face of change, coherence
so that everyone is pushing the same agenda, and the dis
cipline to follow through initiatives in a focused and cost-
effective way.
“One of my observations is that the HR functions that
are thriving and surviving are the ones that are focused
almost entirely on the needs of the business, rather than HR
fads that are not necessarily focused on those needs.”
Holley’s original prescription for coping with the reces
sion was for HR “to be incredibly close to the business”,
perhaps postponing long-term initiatives to ensure survival
in the short term.
But he emphasises this does not mean abandoning long-
term thinking in the process. “One of the things I have
noticed is that HR needs to be incredibly schizophrenic. If
it does not respond to the short-term needs, it will have no
voice and credibility.” At the same time, he believes the
profession needs to ensure that the values and “moral com
pass” of the organisation are retained.
Will Hutton, executive vice-chair of The Work Foun
dation, is impressed with the level of flexibility shown in
the workplace. “I do think, looking around the economy,
you have got to say the number of innovative responses to
this very severe recession – such as wage freezes and sab
baticals – has been extremely good.”
HR bloodied
He says HR has been “bloodied” and has come through the
process quite well. “You have to say: ‘Hats off to them’.”
The John Lewis Partnership, Sainsbury’s, Tesco and
Rolls-Royce are among the companies singled out by him
for particular praise. “Where people have put in the spade
work beforehand, trying to create a good working envi
ronment and investing in workplace relationships, they
have reaped dividends.” For Hutton, retailing, business
services and car manufacturing have done well, while trans
port and telecommunications have tended to suffer.
He finds the contrast between British Airways (BA) and
Japanese carmakers based in the UK illuminating. At Honda
in Swindon, for example, workers have voted for a 3 per cent
pay cut over 10 months, but Hutton says BA’s demands for
wage cuts have not been handled well. He argues that the
carmakers are reaping the rewards of treating their staff
well, but for BA achieving the cuts it needs is proving very
difficult indeed, because “they have come late to the party”.
He adds: “I think this recession has shown that there
is absolutely no substitute for employee engagement and
for HR and line managers to come up with customised,
localised deals that make sense to the local workforce.”
Impressed with IT
Holley is impressed with IT sector companies such as Cisco
and Oracle, saying their HR functions have gained respect
for getting the basics right and for employing people who
approach their profession in a commercial way.
Shell is also praised. “The company put a lot of effort
into developing the commercial skills of its HR people.
It’s their ability to be a really challenging partner with the
business rather than sitting in an HR box reacting to what
is going on.”
When Bryan Finn, economist and founder of consul
tancy Business Economics, gave his forecast, he said the
implications for recruitment were “profound and dis
turbing”. He urged organisations to think ahead to when
the recovery started, warning against disbanding entire
departments because it would take years to reacquire the
skills and experience needed to run them.
His impression now is that this was avoided and that
HR and business generally reacted sensibly to the down
turn. “They are not cutting everything but thinking: ‘Where
can we be more efficient and effective?’. People have not
panicked – they have knuckled down.”
He believes the UK economy has followed the pattern
that he and other economists predicted. “We were look
ing at a very bad first half of the year, and then for that to
stabilise in the second half. It is a little bit early days, but
it does look as if things are stabilising.”
Courtesy of Personnel Today. www.personneltoday.com
