During times of economic downturn, businesses tend to respond to short-term crises with counterproductive defensive tactics like lay offs.
S Y Siddiqui
Managing Executive Officer, ADMN (HR, finance and IT)
Maruti
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Regardless of whether companies are experiencing an economic slowdown or an economic upswing, the bottom line is that people power is the certain route towards gaining a competitive advantage.
In this context investment in talent development is one of the most effective ways for businesses to maintain their top talent's loyalty and ability to continue delivering high-performance.u00a0
HR leaders, thus, need to be proficient at developing talent and creating a congenial work environment to build a high-performing workforce.
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Today, one of the top priorities for HR is maintaining a talent pipeline, driving high performances throughout the organisation and experimenting with new HR practices based on the needs of their people. This HR contribution becomes all the more prudent during economic downturns.
One of the key roles played by HR is to develop the leadership pool for the organisation. Shopping for leaders in the open market is becoming increasingly risky and difficult and building leaders from within the company is becoming the only way to succeed.u00a0
Over the years, HR has, thus, become strategic to businesses. There are many examples in Indian as well as global companies where HR Heads have even been made a part of the Board of Directors.
During an economic downturn a calm and balanced approach on people decisions becomes the pre-requisite to define the roadmap to normal times. So, in the present business environment, HR has to demonstrate a strong relationship between workforce practices and business performance.
This will be done through advanced data mining and the predictive modelling of human resource processes talent development, performance management, etc to identify new business insights. In other words, HR has to continue its focus on human resource measurements.
HR is accountable for driving performance at the organisational, team and individual levels.u00a0 Today's focus on high performance has led to a growing recognition of reward and recognition, performance management, people development, etc.u00a0
Instead of focusing on individual motivators, HR functions must begin to look at driving performance as an end-to-end process that begins with goal-setting and alignment, ensures accountability for achieving results, includes thorough and consistent feedback, and ends with differentiated and targeted rewards and developmental opportunities.
While dealing with the downturn most of us negate or pay less attention to the people aspect in our business, as we are more interested in managing our bottom line. In the trying business circumstances similar to the one we have been experiencing for the past 9 months, many organisations have found a short-term solution in laying off their employees, while few have been able to actually demonstrate their belief in People Power by retaining them and ensuring a long term competitive edge for their company.
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It is high time that we acknowledge the fact that employees are the key differentiating factor for any business organisation, as they 'Draw, Drive & Deliver' the business results. The underlying principles of any business model, therefore, should always aim at, keeping the employees motivated and engaged.
The leadership should take time out for employees and have one-to-one dialogue, communicate consistently and honestly, connect each employee to the organisation by emphasising their contribution. In fact the motto for top leadership should be 'Be there' for your people and most importantly, "listen to your employees".
A business has both internal and external customers. In an economic upswing or downtrend, everyone gets affected, though the extent may vary.
The key to handle this is to get back to the basics strong leadership, investment in key resources, thorough planning, improving productivity, renewed focus, out of box thinking and innovations and customer obsession. However, this can actually happen only if one has competent, engaged and highly motivated employees.
Unquestionably, the winners on the other side of this global downturn will be the organisations with the strategic leadership talent that can drive innovation and growth. Consequently, the nurturing and development of strategic leadership talent is vital and should be on the agenda of boards.
The ability of a company to deal with difficult situations is to a large extent dependant on the mental strength and positive mindset of the top leadership, as well as the organisational culture. Looking at counter measures in the downturn situation is more of a reactionary approach.
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The organisations must look at up scaling people power through innovation and growth and stay focused on people processes when business environment is on the upswing.
To conclude, let me say corporates have to choose between a short-term approach of going for knee-jerk reactions and viewing employees as an overhead cost or taking a prudent view of people as the talent pool or people power, which, in the long term, can help companies ride out hard economic times and improve their overall business performance and enable consistent growth.
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