HR’s role in recession

by 22 Jul 2008

Now is the time for HR to prove their worth.

The economy is showing distinct signs of slowing, with reports of construction, manufacturing and consumer-related sectors all weakening. This, coupled with increased food and oil prices means that Australian workers are beginning to feel the pinch.

While the recent announcement by the Australian Fair Pay Commission to increase the minimum wage by $22 a week may provide light relief to those on lower incomes, it is only the beginning.

The ripples of a weakening US economy are being felt globally. However, although some Australians argue that we won’t be affected and can rely on the powerhouse of China to hold us well out of recession’s way, the reality is that we will and are being affected.

And if it is the case that the economy will slip into recession some time in the future, people should be equipped with the tools and knowledge of how best to deal with it now. The time to ask the hard questions is now.

What will increased interest rates mean to my mortgage? How can I best offset increased utility bills? How can I maximise my salary? How can I save or invest?

It is at times like this that HR needs to take charge and help both employees and the business work through challenging times through extra advice, training and support.

Tesco, the UK’s largest supermarket chain is operating in an economy reportedly on the verge of recession. The UK’s weakest period of growth in 15 years, falling house prices and the global credit squeeze are reported to be at the heart of the downturn and resulting in low consumer confidence.

According to Tesco’s HR team (see Putting Store in HR p12) leadership and information sharing are key to survival during an economic downturn.

While not citing doom and gloom or an economic Armageddon for Australia, it’s a good time for HR to be prepared and look at what has to be done to help both staff and business – and use the time to become champions of the business.