Indefinite freezes placed on new hires

by 11 Jun 2009

Almost two thirds of HR managers have put hiring freezes in place as a key measure for managing through the economic downturn, recent research has found.

A further 48 per cent will not replace staff as they leave and 45 per cent have redeployed staff elsewhere within their businesses.

“There’s no doubt the global financial crisis has created an extreme level of uncertainty within the business community,” said Penny O’Reilly, director, human resources, Hudson, which conducted the research.

“Hiring managers are looking at a range of steps they can take to effectively manage through this period – no one wants to make redundancies – but in many instances businesses have had to react rapidly to cut costs. It’s creating a volatile work environment.”

The research, which took in 160 hiring managers, found that almost two thirds said that maintaining engagement, morale and focus among current employees was their main concern.

Almost half had already made some redundancies as a direct result of the worsening economy, and in an attempt to avoid this course of action, 34 per cent had decreased their use of contract staff.

However, 46 per cent have increased their focus on staff training and development. “As the HR profession well knows, effective people management is more important than ever in the current market conditions. Focusing on strategies to develop and engage employees is an excellent place to start.

“The key for managers is to take the long-term view. There’s no escaping the fact that some very hard decisions may have to be made in the short-term, but those managers who fully engage their employees, communicate clearly with them, keep their drive to succeed up, will best position their organisations to pick back up when the economy rebounds,” said O’Reilly.

However, 56 per cent have increased their focus on productivity, suggesting many employees are having to working harder, in order just to keep their jobs.

But, according to O’Reilly, productivity levels should be a focus for a manager with a long-term view. “Low organisational productivity will only exacerbate the impact of a tough market.

“Proactively, innovatively and bravely approaching the new set of circumstances they face and fully engaging their staff along the way will form the strongest team foundation to make it through to more prosperous times,” he said.

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