The HR Bailout Plan
You might have heard - today the Dow dropped 777 points, representing the largest sell-off in 21 years. It is a more significant percentage loss than the day after 9/11. When you consider that the NY stock exchange was right n the middle of the 9/11 catastrophe, you get an idea of how serious traders believe this situation is.
If you watch the news, you will now encounter images of the food lines of the depression, and commentators instructing you to buy gold and stockpile rations. It's a serious situation.
So the bailout plan failed. Let's talk about the HR Bailout plan.
With constant bombardment of bad economic news, deteriorating personal investments, and an alarmist media, you can bet that your employees are scared. Human Resources must now take a very active stance to get ahead of these fears and lead corporations into normal and productive operations.
Here are a few ideas for your HR department to be a force a reason in this storm of uncertainty:
1. Reassure: Send a memo to all of your employees expressing empathy and understanding of the stress they may be undergoing. Highlight recent successes within your business and bright points in your market. Be honest about your business operations and write about a few challenges and how you can all overcome them.
2. Protect n' Serve: Now is a great time to reevaluate your financial support and services, including IRA, 401K, and banking options. Look for greater flexibility in investment choices, transparency, and financial strength of your partner firms. Promote these changes to your employees and get their input. Stay fixed on the protection of your employee's assets and financial future.
3. Advise: HR certainly should not function as a financial advisor to your employers. However, a certain amount of counsel might be warranted and helpful. During real economic crises, the best investment advice is often to do nothing. If you are fielding calls about your company 401K, for example, direct them to your plan provider, but approach the matter without alarm. If you can provide a general employee memo about such matters, keep the tone reassuring and use a lot of old adages: most of them are true.
4. Keep a seat at the table: Your organization will most likely be looking to reduce overhead. Your department may be involved in planning staff reductions. However, keep focused on productivity enhancements and employee related cost savings beyond staff reduction. For example, this may be a great time to consider remote work for some staff, training to improve production, and courses to improve organization and time skills. Now is the time to invest in your employees, both for them and the long term health of your organization.
The role of the Human Resources function cannot be overstated at this critical junction in our economy. You have the ability to counsel, motivate, and lead your company through these uncertain times. If organized correctly, this downturn can have very positive effects: your organization can emerge smarter, more productive, and courageous. It is up to all of us to affect this change.
If you watch the news, you will now encounter images of the food lines of the depression, and commentators instructing you to buy gold and stockpile rations. It's a serious situation.
So the bailout plan failed. Let's talk about the HR Bailout plan.
With constant bombardment of bad economic news, deteriorating personal investments, and an alarmist media, you can bet that your employees are scared. Human Resources must now take a very active stance to get ahead of these fears and lead corporations into normal and productive operations.
Here are a few ideas for your HR department to be a force a reason in this storm of uncertainty:
1. Reassure: Send a memo to all of your employees expressing empathy and understanding of the stress they may be undergoing. Highlight recent successes within your business and bright points in your market. Be honest about your business operations and write about a few challenges and how you can all overcome them.
2. Protect n' Serve: Now is a great time to reevaluate your financial support and services, including IRA, 401K, and banking options. Look for greater flexibility in investment choices, transparency, and financial strength of your partner firms. Promote these changes to your employees and get their input. Stay fixed on the protection of your employee's assets and financial future.
3. Advise: HR certainly should not function as a financial advisor to your employers. However, a certain amount of counsel might be warranted and helpful. During real economic crises, the best investment advice is often to do nothing. If you are fielding calls about your company 401K, for example, direct them to your plan provider, but approach the matter without alarm. If you can provide a general employee memo about such matters, keep the tone reassuring and use a lot of old adages: most of them are true.
4. Keep a seat at the table: Your organization will most likely be looking to reduce overhead. Your department may be involved in planning staff reductions. However, keep focused on productivity enhancements and employee related cost savings beyond staff reduction. For example, this may be a great time to consider remote work for some staff, training to improve production, and courses to improve organization and time skills. Now is the time to invest in your employees, both for them and the long term health of your organization.
The role of the Human Resources function cannot be overstated at this critical junction in our economy. You have the ability to counsel, motivate, and lead your company through these uncertain times. If organized correctly, this downturn can have very positive effects: your organization can emerge smarter, more productive, and courageous. It is up to all of us to affect this change.
Tags: bailout, economy, human resources
Comment
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Comment by AnilKumar on October 31, 2008 at 4:25am
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These are trying times for all....It is best to keep our cool and apply our mind in preparing for the worst situation possible.
Human mind is unbelievably ingenious. If we focus and think of possible alternatives in a trying situation as this, many options are bound to appear.
One needs to be concious of the reasons why one would REJECT any of the options that appear. If the reason is a reason which under normal circumstances you would reject, you need to CONCIOUSLY evaluate it in the CHANGED circumstances. Are there any other better options ?. If none, you may WANT to look at finding ONE REASON that makes THIS the RIGHT OPTION.
For example : The new opportunity requires you to work late hours, even on week-ends and also is at a lower compensation than your current job, you may under normal circumstances reject it, BUT NOT NOW. Now it requires evaluation, keeping all the worst possible scenario. We cannot be complacent saying the the worst will NEVER come to ME !!. We need to be objective, we need to keep our Ego / status etc aside while deciding.
This has been my learning in life which I thought I will share under the current circumstances in the world.
It MAY NOT apply to all, but will definitely apply to many.
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Comment by K Sayeed on October 6, 2008 at 12:13am -
Hi Miles,
Do you think that global economic recession will give an oppurtunity for under priviliged country in matters of trade.
-Kishwar Sayeed
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Comment by Jordan Shaw on October 2, 2008 at 5:45pm -
Miles,
In this time companies still need to get work accomplished and will adopt a "rent" not "buy" mentality. This is good news for Staffing and Consulting companies who can fill the rank and file positions and a discounted cost. The real pressure lies on the sales department to generate the necessary leads and interest during a time when managers are nervous to pull the trigger and spend.
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-Jordan Shaw
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Comment by Ben Simonton on September 30, 2008 at 1:36am -
HR needs to advise employees that today is a lot different for them from the depression of the 30s. That difference is government insurance of bank accounts and securities. No need to pull your money out of any of these accounts unless you are over limits.
The FDIC (Federal Deposit Insuring Corporation) insures individual bank accounts, one per person per bank, to $100,000, $200,000 for joint accounts and $250,000 for IRA accounts.
The SIPC (Security Investors Protection Corporation) insures brokerage account securities to $500,000 with no more than $100,000 being cash. Money market funds and mutual funds in general are included as securities. The value of these securities is not protected but their existence is protected. Many brokerages also use CAPCO to insure accounts above $500,000.
So we don't have to run to the bank to pull out our money. That is a fast way to make it fail and to make the whole situation worse. No bank can sustain a run, lots of depositors demanding their money at once. Senator Schumer caused a run on INDYMAC and it failed in a couple of days. Depositors got all their money, bank owners lost all of theirs and the businesses who used INDYMAC to get loans and fund their business lost a source of capital and possibly their own businesses.
Don't get overly excited and panic. This crisis was caused by Congress, but they will blame it on someone else.
Best regards, Ben
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Comment by Anil Aphale on September 30, 2008 at 1:00am -
Miles,
Once again a very good, positive post for these potentially troubling times. Excellent advice for our colleagues on the HR side of the Talent Bar. I would add for our colleagues on the recruitment side of the Talent Bar that ecruitment and the search for quality talent does NOT STOP in an economic downturn. Good people are alays needed in organisations. Whne theeconomy downturns the need for cafefyl targettin becomes more important as does the need to look for sectors ofthe market which may still be recruiting.
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