Role of HR in Turbulent Times: Chapter-1

Role of HR in Turbulent Times
CONTENTS
Chapter-1
Introduction of the Sector
1.1 Meaning of Consultancy

1.2 Brief History of Consultancy
1.3 Management Consultancy
1.4 Top Hot Trends in Consulting
Chapter-2
Profile of the organization
2.1 Origin of Neo Solutions
2.2 Organization Profile
2.3 Services Offered
2.4 Vision and Mission of Neo Solutions
Chapter-3
Discussion on Training
3.1 Introduction
3.2 What can HR do?
3.3 Role of HR
3.4 Main HR Initiatives in Downturn Condition
3.5 HR priorities in Recession
3.6 HR Communication Strategies in Recession

Hari Naghu, MBA, SITAM College (Hyderabad.)
Page 1
3.7 HR Talent management in Recession
Chapter-4
HR Role in Recession with Recruitment Strategy
4.1 Searching for talent
4.2 HR concerning areas while recruiting work force
4.3 Recommendations while employee facing negative challenges during recession
4.4 Points have to be focused by HR during Turbulent time
4.5 how to intact with employees during recession
4.6 Miscellaneous points to focus during downturn
4.7 affected HR processes by the recession
Chapter-5
Summary and Conclusions
5.1 Key cost cutting areas
5.2 miscellaneous cost cutting strategies
5.3 Conclusion
5.4 Bibliography

Page 2
CHAPTER- 1
INTRODUCTION OF THE SECTOR
1.1 Meaning of consultancy:-
The word a consultant is derived from the Latin word ‘Consultare’ which means ‘’ to discuss’’.
From which we also derive words such as ‘consul’ and ‘counsel’ is a professional who provides
advice in a particular area of expertise such as Management, Accountancy, Environment,
Entertainment, Technology, Law(tax law in particular), Human Resources, Marketing, Medicine,
Finance, Life Management, Economics, Public Affairs, Communication, Engineering, Sound
system design, Graphic design, or Waste Management.
A consultant is usually an expert or a professional in a specific field and has a wide knowledge
of the subject matter. A consultant usually works for a consultancy firm or is self employed, and
engages with multiple clients. Thus, clients have access to deeper levels of expertise than would
be feasible for them to retain in-house, and to purchase only as much service from the outside
consultant as desired. It is generally accepted good corporate governance. Consultant is also the
term used to denote the most senior medical position in the United Kingdom and Ireland.
1.2 Brief History of Consultancy: Management consulting refers to both industry of, and
the practice of, helping organizations to improve their performance, primarily through the
analysis of existing business problem and development of plans for improvement. Management
consultancy grew with the rise of management as a unique field of study the first management
consulting firm was Arthur D. Little, founded in 1886 by the MIT professor of the same name.
Though Arthur later became a general management consultancy, it originally specialized in
technical research. Booz and Company was founded by Edwin G Booz, a graduate of the Kellog
School of Management at North Western University, in 1914 as a management consultancy and
the first to serve both industry and government clients.
After World War II a number of new management consulting firms formed, most notably Boston
Consulting Group, founded in 1963, which brought rigorous analytical approach to the study of
management and strategy.
Page 3
One of the reasons why management consulting grew first in the USA is because of deep cultural
factors, it was accepted that management and Boards alike might not be competent in all
circumstances; therefore, buying external competency was seen as a normal way to solve a
business problem. It was only after World War II the wake of the development of the
international trade led by the USA, that management consulting emerged in Europe. The current
trend in the market is a clear segmentation of consulting firms. Another branch of management
consulting is Human Resource consulting. Such firm provides advice to their clients regarding
the financial and retirement security, healthy productivity and employment relationships of their
global work force.
1.3 Management Consultancy: Organizations hire the management consulting refers to

both industry of, and the practice of, helping organizations improve their performance, primarily
through the analysis of existing business problems and development of plans for improvement.
Services of management consultants for a number of reasons, including gaining external (and
presumably objective) advice, access to the consultants specialized expertise, or simply as extra
temporary help during a one-time project where hiring of permanent employees is not required.
Because of their exposure to and relationships with numerous organizations, consultancies are
also said to be aware of industry ‘’best practices’’ although the transferability of such practices
from one organization to another is the subject of debate. Consultancy can also provide
organizational change management assistance, development of coaching skills, technology
implementation, or operational improvement services. Management consultants generally bring
their own, proprietary methodologies or frame works to guide the identification of problems, and
to serve as the basis for recommendations for more effective or efficient ways of performing
business tasks.
1.4 Top Hot Trends in Consulting
Niche markets provide lucrative opportunities for starting or expanding your consulting business,
and many have staying power. In the IT industry, VoIP is rapidly being adopted by businesses
as a cost-saving phone/Internet technology. Far from peaking, VoIP is a winning niche for savvy
IT consultants. Also look to fast-growing but underserved niches, like long-term care consulting.
When one trend runs its course? You can head in another direction; but try to stay within your

Page 4
general field of expertise to ease the transition. Discover more hot trends and put your expertise
to work in one of these growing industries.
1. Eco-Friendly
Businesses and individuals are striving to be more conscious when it comes to the environment.
In many cases, increased regulations and legislation for industry are driving the demand for eco-
compliance. The result is that businesses are hiring consultants to review internal policies and
procedures, and to assist in identifying and meeting regulation requirements. Having "green"
expertise can lead to more green for your bottom-line.
2. Life Management
Baby Boomers, the market of consumers aged 55 years and older, have long been a target
market for different services and products. There are millions of people that fall into this age
demographic, making for a niche-sized base of customers. And, these markets of consumers
generally have a substantial amount of disposable income and aren’t opposed to spending it. Life
Manager Consultants have keyed into these factors, and are offering their services to help Baby
Boomers enjoy more life experiences. In other words, consultants assist in identifying and
pursuing personal life goals. It's a growing market for consultants.
3. E-Commerce
As the growth of the Internet has exploded, so have the number of businesses those want
to expand online. It's become common to see a range of businesses make the move, including
traditional brick-and-mortar retail businesses that start selling products online, or a smaller
business that begins listing additional inventory on eBay. If you have experience selling products
and services online, there's a great demand for your consulting services. Companies especially
need help in learning how to sell on eBay and how to set up and manage a full ecommerce site
with shopping carts and payment systems.
4. IT Security
Are you an Internet security guru? Do you know all the latest software for protecting
against computer viruses and phishing scams? If so, it's time to put that knowledge to use
consulting with small businesses and individuals in protecting their IT networks. Experts in
securing wireless networks are in particularly high demand now.
5. SMB Expertise
Small and mid-size businesses (SMBs) are a highly sought after customer base for many
Fortune 500 and Fortune 1000 companies - and for good reason. The SMB market is one of the
fastest growing and has been targeted as a lucrative market for a variety of products and
industries. However, many of the larger companies wanting to penetrate the SMB space know
very little about small businesses and how to market to them. For a consultant with SMB
expertise, offering your SMB know-how to Fortune 500 firms could prove lucrative for your
business.

Page 5
Chapter-2
PROFILE OF THE ORGANIZATION

2.1. Origin of Neo Solutions: -
It am pleased to introduce Neo Solutions, it is a 4 years old HR consulting firm. We are currently
dealing into manpower consulting, corporate trainings and market research & surveys. In
recruitment it is dealing into Pharma, IT, Infrastructure and other Non-IT requirements. Neo
Solutions is a Hyderabad based HR consulting company founded by Mr. G. Naveen Kumar
established in 2003. It caters services to PAN India from Hyderabad. This company provides
human resource recruitment services for IT & Non-IT sectors.
Neo Solutions, formed by group of professionals with vast experiences in diversified fields, with
us employers and job seekers can exchange information quickly, effectively and in expensively.
Neo Solutions is one Stop information, clearing house above jobs and careers for local and
abroad placements. Neo Solutions was launched as a platform for employers and job seekers, to
meet and exchange information. In the operations, more than 30 companies had tried the services
and were satisfied with the responses Received. The Company aims to provide Indians with the
maximum opportunity for their career growth.
As the government of India is supporting sector after sector, this is creating seemingly
limitless employment opportunities. Neo Solutions took the initiative in helping employers to
select and retain qualified professionals, which have put us in very good situation so that
whenever employers want the qualified professional; we are chosen as their corporate
consultants. Neo Solutions can offer you an entire range of services in the HR field. Neo
Solutions believe in corporate ethics and wish to provide quality staffing for your Organization.
It has Resumes, which can cater to all the levels in your Organization. We trust you would find
the forgoing in line with our discussions and would appreciate a confirmation from you.

Page 6
The whole unit deals with various organizations Human resource requirements. It is sending its
representatives to the various companies and getting the human resource requirements, after
getting the information it is directly approaching to the HR Professionals of respected
companies. Neo Solutions is supporting the young upcoming HR Professional with Core-HR
Training programme, which created a new phenomenon in the minds of distinguish HR
managers of the respective Companies. They came to know the importance of the Neo solutions
offering services; organizations are recognizing the importance of the innovative consulting
which Neo Solutions is offering.
Since April getting the industrial exposure threw industrial visiting’s after getting the HR
Professionals appointments. In initial stage, as we require experience and understanding, went
together however after one month started going to the organizations individually in order to
improve the Team’s Individual Skills. Excited to learn and get practical industrial exposure from
corporate world with this industrial integrated opportunity.
Neo Solutions is a dedicated firm which providing valuable services to the corporate sector and
for its clients.
2.2. Organization Profile:-
G.Naveen Kumar - Manager

Samatha - Office in Charge
Mobile Number - 9885555711
Office Contact - +91-40-66828000, 667867555
E-mail id - [email protected]
Website - www.neosolutionsonline.com
Address - Flat 301, Sidddhartha Ramakrishna Apartments
Opposite to Tharuni Resource Center,
Saradhi Studio Lane,
Yellareddy Guda, Ameerpet, Hyderabad, 500073.
Other employees are assisting to the top management in all aspects like receiving calls,
collecting data, short-listing of resumes, sending replies to the official mails etc.

Page 7
2.3. Services Offered:-

1. HR Consulting
2. Corporate Training
3. Core HR Training
4. RPO
Fields:-
The following are the core strengths of the Neo solutions because of which it has got the proven
track record since years:
1. Accounts
2. Administrative
3. Bio Pharmaceuticals
4. Call Centers/Customer Service/Technical Support/Web Support
5. Chemists
6. Finance-Advisors, Executives
7. GIS/CAD/CAM/Remote Sensing
8. Hospitality Industry
9. Human Resources
10. Medical/Health care
11. Medical Transcriptions
12. Sales Management
13. Software/System Engineers
Industries: - Neo Solutions are catering the following Industries man power requirements since
its existence.
1. Automotives
2. Advertising agencies
3. Banking
4. Broadcasting
5. Biotechnology
6. Educational
7. ITES
8. Information Technology
Page 8
9. Insurance
10. Manufacturing Companies
11. Medical Transcription
12. Pharma Companies
13. Stock Broking
14. Telecommunications
15. Transport
Performance Appraisal:-
Performance appraisal system is the backbone for the effective two-way relationships between
the team leaders and their team members. Without this, there would not be efficient usage of the
work force. Performance appraisal system has to be carried out in an independent manner, the
involving parties has to perform the process in the right approach.
The following are two major reasons because of which internal performance appraisal system are
often unsuccessful.
1 .Performance appraisal system selection and usage
2 .Bad relation between the team leader and the team members
Neo solutions perform the independent performance appraisal system for the perfect results. We
help the clients develop their employees improving performance, increasing team work, raising
morale, and creating higher work place satisfaction.
Recruitments:-
Neo Solutions provide best staffing services and solutions to number of companies and lot of
candidates. Neo solutions is a leading provider of quality recruitment services in India, geared to
challenge global majors. Recruitments are a recurring and important process for any
organization. Since the recruitments effect the functioning of the organization so, it requires
more attention and importance. Executing assignments successfully within the deadlines has
made Neo Solutions a part of the recruiting process for organizations.
Neo Solutions offer the following Types of recruitments
Temporary /Contract
Regular/permanent

Page 9
The following are the advantages of the Neo Solutions in this process:
 Ability to work with various types industries
 Caters to the needs of various levels, positions, types and locations
 Can design and implement various selection procedures and assessment centers to
increase the effectiveness of the recruiting process
The following are the types of searches followed:

1 .Head hunting search
2 .Data bank selection
3 .Advertised selection
Head hunting search:-This service addresses client requirements for senior/top management
professionals. As this is a confidential search so, many the companies generally give this kind of
searches to the consultants or Advertise with the confidential post box.
The following are the advantages of the Neo Solutions:
1. Effective communication and clear vision in the procedure has enabled Neo Solutions to be
successful in this arena.
2. The employees have to get good experience across various industry segments.
3. Experience across industry segments.
4. Multiple meetings with clients help in creatively shaping specifications that helps us in
recruiting skilled and competent people.
5. Research skills combined with a rich database of top notch professionals across industries and
intensive networking across geographical locations help in selecting those best suited through
comprehensive, quality assured search processes in recruiting, and absolute confidentiality is in
recruiting process.
6. Candidates are given a good understanding of the company and job profile before being
introduced to the client organization
7. Executing search assignments successfully within demanding delivery deadlines has made
Neo Solutions a reliable ally of organizations
Databank:-
Databank is the first, foremost and the most trusted tool used by the recruiters in this, all the
resumes received by the recruiters are stored and indexed, which are used at the time of
Page 10
recruitment. If the suitable candidates do not exist in the databank then the recruiters pass on the
process to the advertised selection. Neo Solutions has the robust database because of its strong
foundation, varied strategies and establishment into the market.
The following are the advantages of Neo Solutions:-

 Achieve the targets of recruiting
 Strong database
 Most of the candidates in the database or assessed
Advertised Selection:-
Advertised selection is the traditional and strategic choice for the new companies with huge
requirements. This type of recruitments is also used when the client requires public catching.
The following are the Advantages of the Neo solutions in the advertised selection
1. We are tied up with best advertising agencies to provide professional and best man power
pulling ads.
2. Sourcing and selection of the required personal across the nations on the clients’ requirements.
3. Successfully achieving the agreed objectives of candidate response and selection in required
numbers.
4. To waken interest and kindle enthusiasm is the sure way to teach easily and successfully—
Tyron Edwards
Training:-
As the above statement mentions, Neo Solutions has created in unique and innovative programs
in order to train the clients easily and successfully. Along with creating interest and enthusiasm,
training is most effective if it is a combination of both practice and experimentation. Our training
courses are based on the learners and their pace for the effective implementation. Our approach
is interactive and participatory.
The following are the advantages of Neo Solutions:-
1. Implementation of latest technologies into the training programmes.

Page 11
2. We understand the exact client/organization requirement, participant details their proficiency

into the topics and then plan the desired outcomes.
3. We access the participants’ knowledge and base the training session accordingly.
4. Our well experienced and efficient trainers can deliver the perfect trainings
5. Neo solutions focus on the result orientation, which ensures progressive learning for
participants. Training is essential, every job in this competitive world. Now a day the technology
has developed a lot. We are providing training to their corporate at any desired level of
operation.
Some of our training programme includes:
1. High performance training
2. Inter-personal skills
3. Leadership and motivation
4. Good and effective supervision
5. Effective training
6. World class atmosphere
7. Best customer service
8. Dealing with customers by phone
9. Planning skills
10. Time management
11. Conducting workshop
Offering to the other Consultants:-

Neo Solutions recognize the need of partnering with other consultancies for the mutual benefit if
is difficult for Neo Solutions to find any specific skill set then, Neo Solutions offers the
partnership to other consultants. In the same way if there is any requirement to other consultants,
Neo Solutions is willing to accept the partnership offers.
The following areas are being coordinated with the consultants:-
Regional manpower services: - If a company requires man power in the unrepresented areas
then we work through our co-consultants.
Page 12
Abroad Man power services: - For abroad placements also we work with the co-consultants for
the background verification and true information confirmation of the other region candidates.
Assessments: - we are assessing the performance standards of the employees by these following
tests.
Psychometrics
Aptitude Testing
Technical Testing
Soft Skills
Corporate Trainings
2.4. Vision and Mission of Neo Solutions:-
Many organizations have attempted to redefine the business they are in, or even in stream line
their growth in a specific direction. An interesting trend in recent times is that companies have
begun to define their ‘’vision/Mission. It is important to distinguish between ‘’vision’’ and
‘’Mission’’ for the organization.
Definition of vision: - Vision is often referred to as ‘’skyhooks for the soul’’. In fact, Vision is
that igniting spark that can inspire and energize people to do better. The focus of vision is to
reach out hungrily for the future and drag it into the present. To quote Tom Peters ‘’Developing a
vision and living it vigorously are essential elements of leadership’’. The latest trend in many
organizations is to apply the VIP approach i.e. ‘’Vision Integrated Performance’’.
Definition of Mission: - A mission is a statement articulates the philosophy of the company with
respect to the business in specific and society in general. Once the mission statement of the
company is finalized and adapted, it provides a readymade guideline to employees of the
organization about its principles, policies and practices.
Reason for being: - This is the soul-searching activity, where the organization tries to answer
the critical questions like ‘why we are here’ and where are we today? This analysis of the present
is essential; because it proves the true picture of today from where we are begin the journey
towards the future.

Page 13
The vision is a compelling but not controlling force that shows us where we want to be. To quote
KWAN ‘JZU (3rd century B.C)’’ when planning for year, sow corn; when planning for a decade,
plant trees; when planning for life, train and educate men’’. Once the vision statement has been
conceptualized and indicates the direction to the organization is heading for, and then we work
towards the mission which basically includes the performance parameter. This also encompasses
quality, service orientation, Cost effectiveness and such specific variables.
All major achievements throughout history are attributes to people with powerful dreams about
the future. Martin Luther King’s ‘’ I have dream’’ or NASA’s ‘’man on the moon by the end
of the decade’’ are excellent examples of vision. The vision promotes trust and trust is the
foundation of any successful human enterprise.
Vision of Neo Solution: - The vision of Neo Solutions is to create a platform where every
individual, who is looking for a job, can find one.
Mission of Neo Solutions: - It provides human resource consulting services solutions, career
transition services, and customized business solutions to meet the needs of organizations and
individuals. These services include a wide range of corporate human resource consulting services
to solve retention problems and address other human capital management issues. They also
include assessments, counseling and coaching for individuals, and transition services to meet
outplacement needs of both organizations and individuals. Through open and honest
communication, we promote the development of a positive relationship with each Client
Company and candidate that we serve. Our support is highly individualized and we are sensitive
to the needs of both our corporate and individual clients. We believe that the career transition
experience can be a period of enormous personal growth and those who come through Neo
Solutions in transition complete the process with newfound self-esteem and self-worth. Neo
Solutions is committed to providing each and every one of our clients with the best solution for
their business with expected results and accountability.

Page 14
CHAPTER-3
DISCUSSION ON HR ROLE ON TURBULENT TIMES
3.1 Introduction
In today’s arena the most common words we come across are recession and downturn.
Recession or crisis is the part of the normal cycle of business in a given economy. It is certain that
they will sooner or later occur. Therefore, it makes just as much sense to plan for recession or
downturns as it is good for continuity. The management people and employees may experience
anxiety around a number of issues during a recession. In this recession period HR play an
important role to make the industry sustain and help the economy flourish. This project report
expresses the challenges of human resource management in the global recession situation.
“Recession is a part of the business cycle. It’s foolish to assume that business will grow despite
recession. It’s the length and depth of recession that determines business growth.” More than the
cost arbitrage advantage that India enjoys, the main reason for the success of India is that it has
the youngest workforce. It’s easy to blame the economy for all the reasons a company is
suffering: Customers are cutting back on their expenses, advertisers are trimming their budgets,
and stock prices are sliding. These problems may, in fact, be attributable in part to the downturn,
but going with the “It’s the economy, stupid” defense sends a subtle but potentially dangerous
message to employees: It implies that the situation is totally out of the company's hands and left
in large part to fate. This is exactly the kind of attitude that raises anxiety levels in the office and
disrupts employees’ focus on the problem at hand: turning business around.
“If employees believe that leadership of HR can break things, they’ll believe that leadership can
fix things, too.” The recession is about the creative Human Resources Management. The HRM
Function is asked to bring new ideas, to change the HRM Processes and to develop or change the
procedures. And this effort has to be cost saving mechanism to the organization. The HRM
Innovation is easy in times of the business growth, but the recession is not good for big
innovative HRM Initiatives. The HR Management has to focus on unpopular innovations during
the recession as the role of HR during the recession is to save money to the organization. The
senior management expects all the support functions to bring innovative ideas and solutions
which will lead to stronger organization, when the next growth era comes.
Managing Human Resources (HR) in a difficult economic environment is even more demanding
than working in times of rapid growth. Therefore the task of HR is very important to maintain
equilibrium throughout the hierarchy. When the corporate is in turbulence zone, HR can put its
categorical best in ensuring that he guides the corporate successfully. HR needs to be very
powerful in such situations because they not only have to maintain the people motivation level
but has to increase it using non-monetary tools. There are certain points that HR can opt for in

Page 15
such a situation where people are insecure about their job. HR can pay attention to develop the
people on key skills and enhance competencies.
HR has to play an active role in refrain the top talents, act as a caring mother while top
performers rewarded for their performances, get people aligned and developed to fight with this
critical situation, develop people on cross functional skills to balance the surplus and shortage of
workforce, help the corporate to raise the people performance bar, ensure the fair evaluation of
people performance, play an active role in control of communication flow, pass the onus of
making the corporate lean, review its minor low cost benefits and contribute to enhance the value
addition per employee by maximizing employees inputs.
Recession is the time when HR needs to come on its own to help the company during tough time.
It`s the time when the HR needs to develop and retain talent amidst retrenchment, recruitment
freezes, salary-cuts, and fall in budgets. HR is always proud to present their ‘perfection' in all
their activities such as recruiting the right talent, training effectiveness, creating healthy
workplace, excellent employee relations management, highly rewarding positive unbiased
performance appraisal system, team spirit without any conflict of interpersonal relations
and many more activities they claim to be perfect in their execution along with this they
have to concentrate on cost cutting measures.
Many HR people strongly feel that they are the best in acquiring the best talent available in the
market. But when it comes to functioning to make the organization grow with the team they
have selected, they will become dud. If the organization is a start up, then the HR will have
more challenge to make the talent acquired produce results within the target period. Many a
Management compels the HR to recruit ‘cheap labor' by compromising on the quality of the
talent. Then the grind starts. They will start compromising first on qualifications, then on
experience and then they bring referrals who are relatives of the present employees, finally the
company will never take off with confidence to declare good results. Then, the Management
starts blaming the HR for their ineffective ‘team building' and ‘talent acquisition skills'.
Reliance, Infosys, Wipro and Satyam are highly successful from the beginning, because they
never compromised on the quality of the ‘talent acquisition'. Once they set the QRs
(Qualifications required or Qualitative requirements), HR is given required freedom to recruit the
right kind of talent to build a great organization.
Now, in recession, the situation is entirely different. You will receive job seekers daily, who
were laid off and to your surprise, will not fit into your organization, keeping in view of their
KRAs and KSAs. Then, what is the role of HR in this kind of complex situation? How to recruit
proactive, progressive and productive employees to build a great team? How to recruit
recession victims to the advantage of the organization? What kind of parameters we have to set
to help them by boosting their motivational levels, morale and confidence?

Page 16
3.2 What can HR do?
HR needs to be proactive and come up with early interventions as for any organization to survive
during recession; the ability to retain its best people is must. During these days, HR people
sometimes even take the harsh decision of reducing the numbers and land up at downsizing. The
word downsizing is even taken as rightsizing and optimizing but we may not know or ignore the
fact that neither the bad situation nor the good conditions lasts long. HR needs to be proactive
and come up with early interventions as for any organization
to survive during recession; the ability to retain its best people is must (which is what
the company expects from HR).
The HR Management has to focus on unpopular innovations during the recession to save money
for the organization. The senior management expects all the support functions to bring
innovative ideas and solutions which will lead to stronger organization, when the next growth era
comes. "Recession is not the end of the road for recruitment in firms but it actually has given us
a picture that what sense of profiles that are being floated in the market." Eventually, one can say
that go in the market but with utmost care. On the other hand the HR Management has to find
some innovative solutions during the recession.
Downsizing process
v Revised leave structure for all employees
v Reduction in the different components of pay packages
v Identify the non-value added activities and resources.
v Giving show cause notices to the non performers
When the going is tough, it is a must for HRM and its managers to Challenge the Challenges and
the only remedy is just not mere downsizing however downsizing the dignified way.
Be Creative
Now is the time to implement new ideas, to change the HRM processes and to change the
procedures. This has to be done in a way that it cut costs and motivates people. HR can focus on
the following things i.e.
How to reduce the benefits cost?
Redesign compensation structure?
How to retain and develop high potentials?

Page 17
How to minimize the employee costs so as to avoid retrenchment?
During these uncertain times, corporate will realize the importance of having competent skilled
workforce which will ensure that focus stays on trainings but there may be a major reduction in
training budgets. In this time any decision taken by the company impacts each individual. Its top
management’s duty as HR to ensure that the communication channels are kept open,
transparency is maintained. We also need to ensure that accurate communication happens on
time in full, instead of employees hearing things with details from the grapevine first in order to
contain that may float around.
Provide adequate support to leaders and managers in terms of people management processes.
Find ways to keep up the motivation levels of employees. If the corporate plans to retrench the
workforce, counsel not only the employees who will be staying back but also the employees who
have been asked to leave, be fair with them.
Setting the context
Management functions are performed in many organizations by different functional heads

independently. The most important challenge in recession period is revolutionizing the Human
Resource systems to identify, maintain, develop and utilize talents across the organization to
their fullest capacities. An organization may claim that it has the best of the systems to identify
talents across the organization.
HR has now a chance again to prove their value creation role in the corporate only if it
understands what it needs to do now. Some of the basic strategies should be followed by the
corporate managers i.e. reduce administrative and establishment costs, hold large bonuses and
reward payments, create participative forums for dealing with the difficult times ahead, retaining
top talents should be emphasized by the HR managers to the management and HR managers
need to network with fellow managers to find out how best to visualize the problems and try to
solve them.
Challenges of Human Resource Management
¨ Corporate reorganization
¨ Sustaining company’s position and growth
¨ Changing demographic workforce
¨ Knowledgeable and multi skill workforce
¨ Changing mindset of workforce
¨ New industrial relation approach
¨ Society based corporate responsibility

Page 18
3.3 Role of HR
When the corporate is in turbulence zone, HR can put its categorical best in ensuring that
he guides the corporate successfully. HR needs to be very powerful in such situations because
they not only have to maintain the people motivation level but has to increase it using non-
monetary tools. There are certain points that HR can opt for in such a situation where people are
insecure about their job. HR can pay attention to develop the people on key skills and enhance
competencies.
HR has to play an active role in refrain the top talents, act as a caring mother while top
performers punished with being rewarded for their performances, get people aligned and
developed to fight with this critical situation, develop people on cross functional skills to balance
the surplus and shortage of workforce, help the corporate to raise the people performance bar,
ensure the fair evaluation of people performance, play an active role in control of communication
flow, pass the onus of making the corporate lean, review its minor low cost benefits and
contribute to enhance the value addition per employee by maximizing employees inputs.
Sustaining HR’s Role
There are many more possibilities of sustaining HR’s increasing role as not only growth catalyst
but sustaining business through greater employee engagement. Therefore, HR professionals
needs to tighten their belts and get ready for some challenging yet meaningful activities which
will help to change the perception of HR forever. The economic crisis is forcing to separate some
employee and there is no way around. No problem! Do it, but avoid creating a panic around, in
employees, in investors, in market and in country by crying loud about the recession.
HR’s task is also great, if the HR manager creates conducive environment through his
professional approach in achieving productivity of course, with the support of all teams which is
the need of the hour. Business has experienced different dynamics that pose many challenges.
HR and enforcement authorities together strive for achieving the common goals like compliance
and adherence. HR makes all efforts to create and sustain an employer and employee friendly
atmosphere and responding to the current needs and challenges.
HR’s Responsibility
In today’s economic meltdown where job cuts, loss, pay reduction, last come first go,
insecurity of employment atmosphere prevail, HR has special responsibility to create ease
environment to the affected by counseling, displaying care and concern, preparing them for multi
skill task, engaging and deploying in other required areas of functions like security, crisis
management team, etc. HR should engage in more positive side, making and helping employees
to reform, perform and transform which will ultimately make a solid impact on business. This
will display the great and real engagement of Human Resource Management.

Page 19
The HRM Function is not a department to make employees happy, the role of HRM
Function is also about the cuts in the costs of the organization and the HRM Function’s role
is about minimizing the damages to the organization.
The recession can be a very interesting period for the HRM Function. The HRM
Professionals can design, develop and implement a lot of new HRM Processes in the recession,
which are simple and really efficient. But they need to have a clear vision of the HRM behavior
in the recession to be really successful.
The HRM Management has to define the HRM Vision for the Recession. The employees in
Human Resources have to understand the goals for the difficult period of the recession. Many
activities in the organization can be cancelled, but the HRM Employees have to understand the
reasons.
The HRM Vision for the Recession is needed for the employees of the HRM Function as they
should serve the organization as the change agents. Many procedures, policies and processes can
be cancelled during the recession or they can be strongly changed and the HRM Employees have
to be able to explain the reasons for the change or cancellation of the policies.
The HRM Management has to push the top management to define the vision of the organization
for the recession as the roles in the organization can be clearly defined. The top management has
to set the vision for the strategic initiatives as the whole organization can share the same goals. It
is very painful for the top management to define such goals, but the employees and managers can
support the painful way to prosperity, when they believe and trust their leaders.
The HRM Function can serve as the navigator and facilitator for employees, but the HRM Vision
for the recession has to be defined and clearly communicated and explained to HRM
employees. The HRM Management has to communicate the full story as the HRM Employees
have usually access to confidential information and they can build a good picture of the
organization’s health very quickly.
The HRM Vision for the Recession should be about the trust and honesty. The HRM Employees
have to understand the need to make changes and to make the cuts in the procedures they
introduced and run for the organization. The HRM Management has to be proud to announce the
cutting of job positions in the HRM Function and to explain the reasons for selecting the
employees to be fired.
The HRM Vision for the Recession can play a significant role in the success of the HRM
Function in the recession. The HRM Management Team has to set it as a priority and the vision
has to be transformed into actions quickly.
Use technology
During these uncertain times, companies will realize the importance of having competent
skilled workforce - which will ensure that focus stays on trainings but there may be a
major reduction in training budgets. This is the time to implement e-learning solutions
with rapid authoring tools which allows us to create content quickly and efficiently, while
allowing all learning activities to be provided on single platform. Similarly, the traveling costs
Page 20
can be cut by using phones, video conferencing etc. G-talk, Skype and other messenger services
allow free pc to pc calls etc. Similarly, Lotus notes, allow net meetings.
Communicate
At the time of recession, when any decision taken by the company impacts each individual
personally - rumors float around. If the communication channels are not kept open, employees
stop trusting the organization and the morale may go down. It`s this low morale which leads to
attrition & lower productivity. It`s our duty as HR to ensure that the communication channels are
kept open, transparency is maintained. We also need to ensure that accurate communication
happens on time in full, instead of employees hearing things with details from the grapevine first.
Communication is supposed to be proactive, rather than reactive. “You need to have people who
will behave like counselors.” Only such companies will have equity in the minds of the
employees, who will then consider it their first choice when the market improves. If HR does not
proactively engage with employees, they will be pushed to take care of themselves; Employees
then vent their frustrations through social networking sites, blogs and, in extreme situations, form
trade unions and informal associations. In such a situation, “IT will also start attracting lesser and
lesser good quality talent.”
Support
Provide adequate support to leaders and managers in terms of people management processes. If
you are planning to retrench employees, counsel not only the employees who will be staying
back but also the employees who have been asked to leave, be fair with them. Find ways to keep
up the motivation levels of employees when you can`t compensate for their skills by providing
increments. Provide financial coaching to employees and restructure compensation in such a way
that allows the employees to save taxes & increases the in-hand.
During boom time, Human Resources (HR) department of the IT industry had its hands full
recruiting people. As employees changed jobs, which were a plenty, the department wooed them
back. With the economic downturn, the situation has reversed. Employees need to be told what is
happening, what is likely to happen and how the company plans to handle it. In these times, HR
has to work with people meaningfully to equip them to adapt to the changing environment. These
lessons seem to have been driven home by the downturn. “HR has definitely learnt that it is
important to be in touch with people, look at issues proactively rather than reactively.
Top management should motivate employees instead of scaring them about the recession and
always lead from the front. During a recession, HR should be honest and transparent with all its
dealings visible to stakeholders. It should question every decision and ensure that it had the right
strategy and right person at the right place. “If companies want to retain the competitive edge so
that they are well-positioned for the eventual economic recovery, they have to continue to be
competitive and have a plan to retain valuable employees…Besides; the focus should be on
improved productivity, flexibility and raising benchmarks in line with changing industry norms”.

Page 21
3.4 Main HR Recession Initiatives in Downturn Conditions
The HR Function has to conduct several HR Recession Initiatives as soon as the recession is
recognized in the organization. The organization can grow rapidly, when the recession ruins
companies around your organization. But, when the organization feels the pain from the
recession, the HRM Function has to start several HR Recession Initiatives.
The HR Recession Initiatives have to be focused on the analysis of the current situation and the
unlocking the potential for the future growth. The HR Recession Initiatives are not just about the
cost cutting, the recession initiatives have to be focused in more areas:
 Cost Cutting
 Key Groups of Employees
 Process Efficiency
 Honest Information for Employees
 Management Consulting
The HR Recession Initiatives have to be balanced well. The cost cutting is about the immediate
activities to decrease the personnel expenses of the organization, but the HR Recession
Initiatives have to be focused on the future as well.
The employees are told to be the best capital of the organization and the HR Recession Initiatives
cannot be focused on the full destroy of the human capital of the organization. The employees to
be fired have to be selected carefully and the rest of employees have to sure about the future of
the organization. The organization has to guarantee the future for the most important employees
– the key employees, high potentials and the managers.
The HRM Function has to focus on the honest communication in the recession. The HRM
Function has to inform the employees fairly about the bonuses, salaries and number of
employees in the organization in advance as the employees can prepare themselves.
The HRM Function has to have a good balance in the HR Recession Initiatives. The employees
and managers have to feel the fairness and transparency in the initiatives as they can build the
trust to the HRM Function.
3.5 HRM Priorities and Recession
The recession changes the priorities of the organization. The change of the organization´s
priorities should be reflected in the HRM Function priorities and HRM Strategy as well. The
HRM Function cannot live alone; it has to follow the general business strategy.
The HRM Priorities in the Recession can change quickly or they need to be adjusted at least. The
organization has no resources to add to the new initiatives and the HRM Function can be asked
to produce cost savings on current programs. The HRM Management has to make a quick scan
of current procedures and policies to be prepared for the cancellation or change, when asked to

Page 22
make an urgent cost cut. The recession is about cost cuts and designing efficient, cheap HR
Processes.
The HR Priorities have to be assessed using a simple tool for selecting the processes and policies
to be discontinued. The best tool is to use the simple matrix, which divides the processes and
procedures according their costs and impact on the organization. Generally, the HRM Function
should cancel the processes and procedures with the highest costs and lowest impact on the
organization. The HRM Function has to be very careful as cancellation of some policies can be
very sensitive for employees. Those are the processes and procedures with the highest impact.
The recession changes HRM Priorities. The HRM Function has to make a quick response to
changed conditions by the cancellation of the least important procedures and policies, but the
HRM Function has to change the HR Strategy to have a consistent approach during the whole
recession period.
The HRM Function has to adjust the HRM Priorities in the recession very sensitive way as
the employees feel some security and consistency and that they can trust the organization and its
success in the war with the recession. The HRM Function has to keep the role of the employee
advocate and this should be reflected in the decision matrix as well. The recession is not a
chance to change and cancel everything; the corporate culture should not be touched by the
change of the HRM Priorities during the recession.
The recession is about the creative Human Resources Management. The HRM Function is asked
to bring new ideas, to change the HRM Processes and to develop or change the procedures. And
this effort has to be cheap or it has to cut the costs of the organization. The HRM Innovation is
easy in times of the business growth, but the recession is not good for big innovative HRM
Initiatives.
On the other hand, the top management understands the effort to innovate the HRM Processes
better. The top management is in the search for the potential cost savings and they count every
single penny brought by the line management. The HRM Costs are usually a very significant cost
to the organization and the HRM Function has to be proactive.
The HRM Function has to focus on unpopular innovations during the recession as the role of
Human Resources during the recession is to save money to the organization. The top
management expects all the support functions to bring innovative solutions, which will have to
make the organization stronger, when the next growth era comes.
The HRM Innovation during the recession has to focus on the following topics:
1. Reduce the number of employees in the organization

2. Strategic initiatives to increase the productivity and efficiency of the whole organization
3. Redesign of the compensation scheme
4. Cancellation of several benefit schemes
5. Training and Development Programs cutting

Page 23
On the other hand the HRM Function has to find innovative solutions for the following topics:
1. Identifying the real key employees and to keep them in the organization
2. Identifying the real top potentials and to strengthen their development program
The second two topics have to be done with the minimum additional costs and it is a really hard
task to accomplish. The role of the HRM Function is not to cut the costs for the time being, but
to make the organization stronger and ready for the future growth.
Recession and Employees’ career options
The employees are the most important assets of the organization. In times of the recession, the
employees have to be secure about their future and the organization should announce a clear plan
to them. The HRM Function has to be involved in all the communication plans, the
communication toward employees.
The recession brings a panic to the organization. The rumors about the recession and the layoffs
spread quickly around the organization and the HRM Function has to monitor the emotions in
the employee population. The rumors are the most important danger for the successful survival
of the recession. When the employees start to speak about the recession, the key employees and
top talents can leave the organization within several weeks, as they feel no future in the
organization.
The employees feel the danger from the recession, the top management has to inform all the
employees honestly about the outlook for the organization and it has to provide them with the
vision to follow.
3.6 HR Communication Strategies in Recession
Communication
In a recession, more than ever, you need to ensure that the communication machinery in your
organization runs like a piece of well oiled machinery. Keep employees in the loop and don’t
allow rumours to fill the communication gap. Whether you are lowering the axe or cutting down
on expenses, make sure employees are informed and understand the underlying message
properly. When poorly managed, communication or the lack of it can breed ill will, bad feelings
and a lot of negativity within the organization. Weathering a recession is not easy.
Downturns tend to make people jumpy and stressed out. However, it is also a chance for the
organization to prove its leadership mettle and consolidate its talent base when many others are
falling apart. So go ahead and show your employees, boom time or no, you dare and you care for
your own.

Page 24
HR can also assist with strengthening organizational culture and brand in the downturn.
The decisions a company made and the way it implemented them provided both an opportunity
and a significant risk. As they are making critical decision in response to the economic crisis,
carefully considering the impact of those actions would have on their culture and brand.
HR should also be ruthlessly focused and redefine its (organization’s) priorities in the downturn,
because it was the time to hone in on the organization’s strengths and core capabilities.
Define the ‘efficient frontier’ – what investments would yield the largest savings and future
returns. HR should not lose sight of opportunities in the recession.
History had shown that great wealth could be created in times of turbulence. Most executives
intimately understand their current reality – and build comprehensive plans to manage the
risks.
It is said that when the going gets tough, the tough gets going. So when the fear of recession is
gripping the nerves of Indian companies, there are a few who are taking it as a challenge.Certain
business houses are devising various strategies to keep themselves out of this cauldron. While
most companies are taking a beat by the recession, there are a few that have managed to achieve
same profit levels during recessionary period, if not higher than the last year. But even in the
same sector some companies are reaping rich dividends while others are trying to save the
blushes.
The HRM Function is always responsible for the mass communication to employees in the
recession. The HRM Function should be responsible for the consistency, transparency and
fairness of the crisis communication to employees. The recession is usually not about the good
news, but the HRM Function has to be the employee advocate and the messages should provide
the employees with the clear outlook of the future.
The crisis and recession communication have to be targeted, as not all the employees should
receive the same amount of the information. The Sales employees should have completely
different details from the Operations people. The HRM Communication in the Recession is about
defined and agreed target groups. The organization cannot publish the details about its business
position to all the employees, but some groups of employees have to know more to feel
comfortable and more secure.
The HRM Communication is one of the strongest tools for the retention of key groups of
employees. The talents and key employees have to receive more information from the
organization to keep their own security and their value for the organization. The organization
needs to raise the level of the motivation and the honest communication is one of the best tools
for motivation. But the HRM Function has to act as the consultant to make sure, the employees
are not de-motivated and frustrated by the amount of messages and the details provided.
Page 25
The HRM Communication in Recession is about a clear description of the organization´s

position on the market, the economic outlook for the next period and about the strategic products
and services, which will be the leading the growth in the era after the recession. The employees
should know about these topics as they can prepare themselves.
3.7 HR’s Talent Management in Recession
The talents are the best assets in the recession, as the organization needs to mobilize the entire
top potential in the company to bring new and innovative solutions to fight with the recession.
The talent management is under a huge pressure in the recession. Each manager tries to protect
the resources in the unit and the HRM Function has to leverage the resources of the organization
The talent management has to define a clear group of employees to be separated from their
current units in the finding a new successful way to the future.
Talent Management under Pressure
The talent management works nice in the time of the economic growth. In the recession, the
talent management gets under a huge pressure from the line management and the top
management, as their interests are not aligned, at least fully. The HRM Function has to be able to
mobilize all the talents across the whole organization and the line management can be fully
confused by such an activity. The top management can have a nice plan to use the top talents of
the organization to have a new opportunity to win the war with the recession, but the line
management likes to have the talents in their units to have the smooth operations certainty. The
talents usually like the challenges and the recession is the challenge for them. The HRM
Function has to find the plan to allow the top potentials to be freed from their current units and to
propose a good plan to the line management to keep their satisfaction and buy-in.
Chapter-4
Page 26
HR role in Recession with Recruitment Strategy

Recruitment is one of the most affected HR Processes by the global recession on the market.
The companies do not offer vacancies, the number of job applicants grows rapidly and the
organization has to manage the recruitment smartly. The organization has to change the focus of
the recruitment and the recession is a good moment to focus on the recruitment process
development and redesign.
4.1 Searching talents on the job market
The recession is a good moment to hire the top potentials from the job market and other
competitors. The HRM Function has to act quickly to hire the best class employees before their
current employers take the action to protect them. The HR Recruiters should always ask the
managers and key employees of the organization about the excellent people, they know on the
job market. The HR Recruiters should have a list of the job candidates, who can be asked to join
the in organization. The talents are usually known in the industry and the recession can make
them to be more sensitive to the job offers from the competitors. The role of the HRM Function
is in the quick reaction to the recession, making the proposal to the top management and having a
good contact with the recruitment agencies to start the hiring process as soon as possible.
The HRM Function has to co-operate closely with the top management, as the talents from the
job market need to know the clear plan and clear expectations from them.
The HRM Function has to monitor the personnel expenses added to the payroll of the
organization as the company does not exceed the agreed rules and the HRM Function has to co-
operate closely with the recruitment agencies to get the best class employees from the job
market. The recession is a tough time and the top talents from the job market will definitely help
to win the battle on the market.
Managing HR during financial recession, which will eventually affect most companies and
organizations, should focus on keeping everyone calm and together through smart and wireless
internet, cost-effective strategies. The signs are everywhere as even the biggest companies reel
left and right from the staggering effects of the financial recession. Layoffs, buyouts, bailouts,
mergers, and other undeniably desperate measures are being grasped at like straws. But aside
from these drastic measures, everyone should realize that it is just as important to adjust in
managing HR during financial recession.
As the economic slowdown deepens, and companies across the board effect job cuts, freeze on
new hiring and squeeze out more productivity from existing employees, the balance of power in
the workplace has surely shifted away from employees back to the employers. And it is not just
the now seemingly ‘unnecessary’ HR excesses of the boom years — recall ‘no-shows’, ‘talent
crunch’, ‘counter offers’, ‘family holidays’, ‘dating bonuses’ and the like––that are being
consigned to the dustbins even at relatively financial healthy companies, but a much deeper

Page 27
correction is taking place in the way job-market dynamics had come to play in the last three-four
years.
“Employees who contribute directly to the top line and bottom line will become more
important.” Expect ‘Monday morning roles’ that have a clear focus and deliverables, to gain
importance with companies across sectors.
4.2 HR Concerning Areas While Recruiting Work Force
1. Never compromise on basics such as Qualifications, experience and skill set required.
2. Do not look for excellent communication skills. If they can communicate effectively in
their mother tongue in the workplace to interact with their colleagues and to get the
things done, that is more than enough.
3. Do not encourage work place sarcasm, if you select recession victims. Try to protect
them from the ‘verbal duel' of your colleagues.
4. Organize induction program giving more impetus on ethical values in recruitment and the
importance of interpersonal relations and accommodating the need of ‘recession victims',
keeping in view of the need of the organization and also focus on the ‘goodness' of the
Company in these ‘bad times'. This will increase loyalty of the employees and enhance
the image of the organization.
5. Help the employees communicate freely without alienating the ‘recession victims'
recruited.
6. Help them to get reasonably good pay to survive with dignity, instead of making them
feel exploited.
7. Training them in soft skills such as Time Management, Workplace Communication

Skills, Interpersonal relations, Team Spirit, Team Work, Stress Management and
Workplace behavior, will help them to cope up with the tough times.
8. Generally, we entrust all kinds of works as we feel that any human being can do any
work especially highly time consuming coordination and facilitating assignments, which
would make the Management feel that there is no productivity due to the unproductive
tasks assigned to them. Give them right work which would enthuse them and they will
deliver in time.
9. Do not interfere or guide them while they are in the process of success and involved in
performance to deliver.
10. Never allow them to whine without completing their work; but help them to relax within
the work station and in the campus, to make them feel the freedom of work place.

Page 28
Have to identify the real key employees and to intact them in the organization to identify the real
top potentials and to strengthen their development program. The role of the HR Management is
not to minimize the costs for the time being, but to make the organization stronger and ready for
the future growth.
4.3 Recommendations while employer facing negative challenges during recession:
1. Top management should know the contingency plan. Do the brainstorming session with your
top management and contribute in their strategic planning.
2. A complete or partial job freeze, however, communicate to the workforce that the company
many continue to recruit key individuals even in difficult times. Review the employee
performance evaluations to determine the key people that company cannot afford to lose.
3. Flow of Communicate should be from top to down that will help in making conducive
atmosphere within the organization. Make prepare yourself for individual and group concerns
therefore there should be a proper counseling session.
4. Have to maintain a calm and healthy atmosphere. Review all HR policies, processes and
procedures to ensure that they are purposeful and contribute directly to the success of the
company. Suppose the company has to lay-off staffs ensure that there are no other opportunities
for them in other functions or divisions of the organization.
5. Advise managers to deal the process of managing change. Managing Human Resources (HR)
in a difficult economic environment is even more demanding than working in times of rapid
growth. Therefore the task of HR is very important to maintain equilibrium throughout the
hierarchy.
4.4 Points have to be focused by HR management during recession are as follows:
 To optimize the manpower strength. To take strategic initiatives to increase the

productivity and efficiency of the entire organization.
 To work on compensation benefits. Redesign training and development programs.
 On the other hand the HR Management has to find some innovative solutions during the
recession like,

Page 29
* To identify the real key employees and to intact them in the organization.
* To identify the real top potentials and to strengthen their development program The
HR Management has to have priorities in mind and the strategic impact of the HRM
Innovations in the recession time. The role of the HR Management is not to minimize the
costs for the time being, but to make the organization stronger and ready for the future
growth. How to intact your employee during recession: Here is how to keep your
employees with you and away from your competitors during tough economic times.
* Show them the long term vision the above steps will enable the employer to hold its
team together during a recession, and will even make bond between all of you stronger.
Employees should be motivated enough to stick to the employer during tough times and
put in the extra effort required for the organization growth.
 Ensure your organization’s policies and handbooks are up to date. Remember that an
annual review of your employee handbook for compliance by an experienced
professional is highly recommended. Also, each employee having a copy of the employee
handbook is not enough. They have to be able to read and understand the content. Be sure
that you provide employees a handbook in a language they can read and understand.
 Layoffs are never easy. Ensure you are familiar with your legal responsibilities in a lay
off to minimize your organization's risk. Be sure that you have properly defined the
criteria you are using to determine who will be let go.
 Cutting Pay may be an option to consider saving on today’s costs. Is this really an option
for your organization? How is your pay scale related to the market? Are you willing to
risk losing key employees whose talents may be needed by other organizations, because
you chose to reduce their pay at this time? Remember, you should not cut pay without a
recovering strategy of how you will re-adjust when the economy has turned.
 On the other hand the HR Management has to find some innovative solutions during the
recession like. To identify the real key employees and to intact them in the organization.
To identify the real top potentials and to strengthen their development programme.
The HR Management has to have priorities in mind and the strategic impact of the HRM
Innovations in the recession time. The role of the HR Management is not to minimize the costs
for the time being, but to make the organization stronger and ready for the future growth.

Page 30
Managing Human Resources (HR) in a difficult economic environment is even more demanding
than working in times of rapid growth. Therefore the task of HR is very important to maintain
equilibrium throughout the hierarchy.
4.5 How to intact with employee during recession:
Here is how to keep your employees with you and away from your competitors during tough
economic times.
· Differentiate Between Your Good and Average Employees
· Redirect Your Employees to Other Departments (Job Rotation)
· Listen to Your Employees
· Keep Them Motivated and Busy (Communicate-Communicate and Communicate)
· Show them the long term vision.
The above steps will enable the employer to hold its team together during a recession, and will
even make bond between all of you stronger. Employees should be motivated enough to stick to
the employer during tough times and put in the extra effort required for the organization growth.
First HR needs to start thinking strategically…
 How can the organization make effective and economical changes that will help through these
difficult times?
 What can I do to minimize our organization’s risk for fines, violations and/or unnecessary legal
proceedings?
Following area should be looked upon:
 Ensure your organization’s policies and handbooks are up to date. Remember that an
annual review of your employee handbook for compliance by an experienced
professional is highly recommended. Also, each employee having a copy of the employee
handbook is not enough. They have to be able to read and understand the content. Be sure
that you provide employees a handbook in a language they can read and understand.
 Layoffs are never easy. Ensure you are familiar with your legal responsibilities in a lay
off to minimize your organization's risk. Be sure that you have properly defined the
criteria you are using to determine who will be let go. Alternative Workweek Schedules
Page 31
and Flexible Scheduling can maximize production and cut-back on overhead costs for
organizations.
 Cutting Pay may be an option to consider saving on today’s costs. Is this really an option
for your organization? How your pay scales is related to the market? Are you willing to
risk losing key employees whose talents may be needed by other organizations, because
you chose to reduce their pay at this time? Remember, you should not cut pay without a
recovering strategy of how you will re-adjust when the economy has turned.
 Offer Professional Development as a reward or incentive to employees for performance

and hitting goals. Professional Development courses are an economical way to reward
employees with the gift of education and skills they will use throughout their lifetime.
 Downsizing does require internal document maintenance for your organization. As jobs
are modified and responsibilities are increased changes also must be made to your job
descriptions.
As more and more innovative ideas come up, you would see your organization scaling up its
productivity and this people-advantage would soon bring competitive-advantage by delivering
your products / services faster, cheaper and better. When business is strong, we sometimes forget
about being frugal, but we all remember the "bad days" of the appraisal recession in the mid-
1990s.
4.6 Miscellaneous points to focus in tough times

Motivate your staff to be happy
A year ago when recession was still a distant rumble, the world was a good place to be. Work
was fun, employers were generous and the biggest worry for most people in cushy jobs was
where they were going to invest the bulk of their hefty bonuses and handouts. Now, the tables
have turned and a pall of gloom has descended on the corridors at offices. The economy is in
turmoil, bonuses have dried up to the proverbial trickle in the Sahara, and salary cheques are not
quite keeping up with the rising costs. Many people have taken a financial hit. To add fuel to
fire, the constant threat of layoffs hangs in the air like some foreboding ghost waiting to scare
what little sense you have left. Any wonder employees seem depressed?
While the ups and downs in the economy are a natural part of a business cycle, caught as they are
in the turmoil, employers tend to conveniently ignore the financial and emotional distress that
recession can cause to the lives of the normal happy people who work for them. Rather than
leaving the employees to fend for themselves, organizations need to lend a hand to the
employees in tackling the crisis. So what can an organization do to retain staff and keep
Page 32
employees motivated, now that generous handouts and financial pampering is out of question? A
part of this Endeavour has to do with offering the right rewards, internal brand positioning and
displaying leadership initiative.
Training
When budgets are tight, training becomes a valuable tool for retaining employee interest and
motivation. Scrap the budget for parties and vending machines at the office if you must, but keep
training high on your list of priorities. Good training doesn’t have to be expensive, so try to
squeeze maximum value out of your training rupee and don’t hesitate to use it as a tool for
recognition and reward when you lack the funds to put up the financial stakes. Skill development
is always important to employees because they know they are hoarding something of value and
benefit to their future. The organization benefits too. Well-trained employees can be your best
asset, especially during economic tough times.
Consolidate
You have to keep an eye out for your top talent, because they will be particularly vulnerable in a
recession. With financial rewards not forthcoming, they may be tempted to jump ship for paltry
gains. Lend an empathetic ear to your employees and allay any fears they may have about the
recession. Explain to them that this is only a temporary phase, and their future would be more
secure and brighter if they stay with the organization.
Shift focus
Notice how a nagging pain seems to go away when you don’t think about it? You too can ease
the discomfort of your employees a little by taking their thoughts away from the immediate
unpleasantness of recession by focusing on future plans and the big vision you have for your
people. Spare a thought for those who have chosen to follow you and guide them with energy
and enthusiasm. Display leadership initiative and steer them to bigger, more challenging goals.
Give them hope to look forward to, a rewarding career and a better future.
Rewards
A little money goes a long way in a recession. Okay, so the financial pot is running a bit dry, but
you still can still scrape the bottom for some financial rewards for your employees. They may
not be as lavish as they were in boom time, but financial rewards, even if it is in bits and pieces,
will certainly come in useful for cash-strapped employees. If you don’t have the money for
bonuses, make do by sprucing up the benefits for your employees. Give them better health care,
insurance or retirement options.
Getting back to the basics

Page 33
In this era of cut-throat competition companies entangle themselves so much in innovations that
sometimes they let the simpler aspects go unnoticed. However, due to recession many companies
are introspecting and improving their fundamentals. How the age old motto of providing quality
service to customer can be a boon is exemplified by Bharti Airtel. It has been on a roll adding
record subscribers even during times of recession. Even though the Telecom sector is a
competition stifled market and Airtel has a high pricing structure, yet Airtel is able to achieve
this feat due to strong brand image of being a quality service provider.
Cost cutting
Cost cutting is the need of the hour for a company. However, it is extremely crucial for any firm
to recognize the spheres in which cost cutting has to be carried out. Compromising on quality or
improvident layoffs can be detrimental to the company’s fortunes. Cutting down on vacation
expenditures, delaying or diminishing expenditures on future projects for the time being are
some measures that can be undertaken. TCS has undertaken an effective cost management
programme through non-salary cost structures like travel, communication and rent.
Study the consumer sentiments
Customer satisfaction is a priority for any company. Usually companies carry out lot of market
research to assess the consumer market. The key issues studied are the type of market accessed
and acceptability of their product in the market. However, at times the companies miss a crucial
factor that customer sentiments keep on changing. Realizing this change and adjusting to it
accordingly is crucial.
Maximizing employee motivation
These are times when companies need to keep up the tempo of employees as employees fear
facing the axe due to downsizing. Hence, it is mandatory for the company to sustain the trust of
the employees. One way of achieving this is when the upper management is in constant touch
with all the employees.
Right moves at the right time
Correct decision at critical moment is extremely crucial for the health of any organization and
this holds paramount importance during turbulent times like this. If the company can envisage
correct future trends then it can a boon for the company. Dabur has shown tremendous intuition
and adopted right moves to beat the downturn. Its acquisition of Fem Foods along with timely
launch of new products has worked in its favor.

Spending on product development
Page 34
Many companies freeze investment on research and development during recessionary period.
However, investment on product development can propel the firm ahead of its competitors when
the downturn elapses. A significant example is the expenditure of Tata on Nano. The launch of
Nano has already created ripples in the small car segment.
Accessing unchartered avenues
Penetrating new markets can be a boon during times of recession as it helps widen the customer
base. However, care has to be taken not to lose hold on present market besides keeping the cost
factor in mind. These are the simple factors that certain Indian companies are incorporating in
their day-to-day business to weather the storm. Depending on type of business model and type of
market forayed; many other strategies can be pursued as well. The key is to have self-belief of
warding off the difficult period.
4.7 Affected HR Processes by the Recession
The recession affects different HRM Processes. Some HR Processes can be affected by the
recession very hardly and other processes can be completely immune from the recession impact.
The HRM Function has to react very quickly and the response has to include the whole HRM
team as all employees have to help the most affected employees to keep the level of the
satisfaction.
The organization needs to save the costs and it needs to identify and potential additional source
for the cost saving and starting a new growth era. The HRM Function has to prepare a new HRM
Vision and a new HR Strategy for the coming period as the cost cutting is not the only way to
build a stronger organization fighting with the recession.
The most affected HR Processes are the following:
Recruitment - The first HR Process with the change in the recession. The job vacancies are
cancelled and the HRM Function should come with a new recruitment strategy. The organization
can hire a new set of skills and competencies to strengthen the position of the organization on the
market.
Training – The trainings are cancelled as it is a quick cost cut. The training can be later focused
on more specialized training sessions and more internal training courses can be introduced.
Compensation and Benefits – The department can be asked to bring a new compensation
scheme, which will save the costs and motivate employees to be more proactive.
HR Front Office – The HR Front Office have to be present at clients all the time as they will
need a strong guidance and facilitation during the recession.
The HR Processes are heavily affected by the recession, but the HRM Function has to take
this as the opportunity to change and to bring new ideas on the scene. The recession is the best
Page 35
time to design a completely new approach of the organization to its human capital.
The HRM Function should be ready for the recession, which comes from time to time. The HRM
Function should be always very careful about the costs added to the organization as cost cutting
always hurt. The HRM Function has always to predict, the recession will come and the nice
initiatives can be then very painful initiatives.
Chapter-5
Page 36
COST CUTTING STRATEGIES BY HR
COST cutting and operational efficiency has always been important for businesses. Not only
does it increase profits (if managed correctly) but it also makes an organization lean yet sturdy.
In today’s scenario of rising costs of everything from fuel to household stuff, it is essential to
review how costs can be cut down. Economies around the world are slowing down, and
companies are looking for ways to trim spending and improve the bottom line. Budgets grew
rapidly during the dot-com boom and the run-up to Y2K, and then declined drastically when the
bubble burst. Cost cutting can be your priority but should not be above gaining competitive
advantage. You should definitely keep your finance close but keep your human resources closer.
The only way to emerge as a leader in the corporate landscape is to build a company that lives
and breathes on innovation. Identify and develop a team of professionals who don’t suffer from
'Change Syndrome' but addicted to change.
We find immediate cost savings by switching from a conventional system to an alternative one
like cutting down the energy demands on your furnace by heating your home with your wood-
burning fireplace. In the summer, reduce air-conditioning costs by scheduling your work around
the hottest hours of the day, using attic fans and skylights that open to let out the heat. Often you
can do this without decreasing your productivity. If you use propane or heating oil and have a
choice of suppliers, compare prices. Find out if your home business qualifies for a business
discount or business rate. If you can get a business rate, make sure it's actually cheaper than your
residential rate. Some state utility commissions tilt in favor of consumers, but many offer
business discounts.
Increasing numbers of people are saving money by using voice over internet protocol (VoIP),
such as Skype. While quality of service varies, a friend of ours who lives outside the City/ State
or Country. Reports people hear him better when he's using Skype than when he's on his land
line. Other major VoIP providers are iConnect Here, Net2Phone and DialPad. You may also be
able to save money on your cell-phone service. To get customers to switch services, providers
are constantly competing with each other by offering lower prices. Another money-saving option
is to combine your phone and internet services.
5.1 Key cost cutting Strategies

Cash Management.
1. Pay no bill before its time. Don't pay any bills until they're due. See who has a late charge, and
who doesn't. Send checks out on Friday to take advantage of the weekend "float."

Page 37
2. Exercise dormant lines of credit. Frequently business owners set up lines of credit they don't
use. The bank may drop your line of credit if it is not used for a certain period of time, so be sure
to check their use requirements. If there is an annual cost, such as 1%, many business owners
consider dropping a line of credit. But remember the rule of banking: If you really need the
money, you probably can't qualify for the loan.
3. If you don't have a line of credit, set one up now. Check around for competitive rates. It's a lot
cheaper than using credit cards if you're really in a cash flow pinch.

4. Closely monitor your three sources of cash:
- Appraisals in process, not yet completed. Appraisals billed out, but not yet collected. Paid
billings: cash on hand
5. Complete and bill out appraisals as fast as possible. The sooner they're billed, the sooner
they'll be paid. We're all tempted to "let the work fill up the time available." But, it delays
payment of your bill. If they don't have the appraisal, they won't pay the bill.

6. Give your associate appraisers a higher fee split if they're willing to wait to be paid until you're
paid for appraisals. This policy can be a substantial help to cash flow problems as the highest
percent of expenses is appraisal labor.

7. Be very aggressive with past-due accounts, particularly non-institutional companies, such as
mortgage brokers. With many mortgage brokers expected to go out of business, and both
mortgage bankers and brokers having cash flow problems, let them be late paying someone else,
not you. In collections, the "squeaky wheel gets the grease." Call every day if necessary.
8. Get interest on your money by setting up a "sweeps" account or interest bearing checking
account, and doing daily deposits. Even if it's only two or three percent interest, it's better than
nothing.
9. Get as many pre-payment or COD's as possible. Offer a discount, if necessary. Require pre-
payment from private clients, or business clients that may cause payment problems. If they won't
pre-pay or COD, turn down the work. Don't work for free.
Rent - office and storage

Page 38
10. Renegotiate your lease to a lower rent, or a temporary lower rent while business is slow. If
office vacancies are high, your landlord will probably prefer reduced rent to no rent.

11. Sublet unused office space to appraisers or non-appraisers. Or, move out of your larger office
space to a smaller sublet office.

12. If you need to move or downsize to a smaller office, but have a lease, work with your
landlord. Maybe he or she will let you sublease, make a partial payment of the rest of your lease,
or move to a smaller space. In most parts of the country, the office market is not doing well, and
landlords are willing to negotiate. Negotiate with the landlord for some type of compensation for
phone and electrical improvements you have made and paid for, but will have to leave behind
when you move.
13. Move "back home" and work out of the garage, spare bedroom, or even the dining room
table. If you think it's too cramped, consider it only temporary until business picks up again.

14. Shop around for low-cost storage space. We have to save our files for at least 5 years, and
many of us save them for much longer. What to keep and throw out in files is an individual
decision, but you can shop for a lower storage cost.
15. Get rid of excess stored stuff, such as old office furniture. Sell it or give it away. Don't pay
storage costs for things you really don't need. Don't be a packrat.

Pricing
16. Keep close track of your competitor's costs. Don't underbid or lose work because you
overbid. When fees are changing, don't get left behind and lose valuable assignments from
overbidding, or income from underbidding.

17. Don't offer lower prices to a client that isn't price sensitive. Why give away your profits? Not
everyone gives assignments to the low bidder. Some don't even do competitive bidding.

18. Know your costs on appraisals. The high fee jobs may not be the most profitable. It may be
more profitable to set up referral alliances with appraisers in other geographic areas, rather than
spend the time traveling and doing extra research on an area you're not familiar with.
Dues and Publications

Page 39
19. Carefully review each organization where you pay dues. Do you really participate, or do you
send in dues because "you always have." You can always rejoin later, when business picks up if
you feel guilty about dropping out.

20. Review the publications you subscribe to. If a publication doesn't really help you in your
business, consider not renewing.
Personnel
21. Cut back principals' salaries. Pay yourself last, after paying all other expenses. Although this
may seem obvious, many companies have developed serious financial problems because the
owners kept taking out large salaries.

22. "Lease" your employees. Instead of laying off an experienced secretary, lease him or her to
another company until business picks up again.
23. Use temporary help whenever possible when your business substantially increases. They first
let go the temps, then the permanent employees.

24. Use part-time support staff. They don't require benefits and usually have more flexible hours.
Laying off a part-timer, or cutting back their hours, is much easier than a long-term loyal, full-
time employee.
25. Have a cost cutting brainstorming session with your associates and support staff. If you're
working alone, set up a lunch with your accountant or other appraisal business owners to swap
ideas. You'll get many ideas you've never thought about before.

26. Have one person attend a seminar, and then later "show and tell" the rest of your staff.
but the seminars are expensive. Just send one person, who gives a "mini-seminar" to your
other associates and yourself.

27. Attend only local seminars to eliminate travel costs. If there's an out-of-town seminar you
want to take, call the sponsor and see if it will be offered locally. Or see if you can purchase
audio cassettes or video tapes.
28. Use an outside payroll service to cut bookkeeping payroll costs. Or, do it yourself by using a
simple software program like Quick books. Don't use a CPA to do your bookkeeping.

Page 40

29. Broaden staff responsibilities. For example, instead of paying an outside bookkeeper, have
your secretary do it. If you have to lay off a full-time secretary because your work has dropped,
consider letting a less experienced associate appraiser do part-time clerical work. At least they'll
have some income. Instead of having outside firms do janitorial and delivery services, have your
employees do it. It's better than getting laid off, or sitting around worrying about getting laid off.
30. Cut your non-cash compensation, such as a "cafeteria" benefits plan with such benefits as
health insurance and paid time off.
31. Use college interns or co-op students for research, setting up databases, etc. They work for
credit or a low salary on a short term basis and can work on specific projects, or on general
research.
32. Get free or low cost consulting from a local college business school's small business
consulting programs. They can give you advice on such topics as marketing, collections, and cost
accounting.
Insurance
33. Be sure you're not overpaying for workers compensation. How are your appraisers classified?
They are relatively low risk for a claim and should be classified as real estate agents or some
other category, rather than as much more expensive inspectors. If your insurance company insists
on classifying them in a high rate category, change insurers. If this year's workers comp is based
on last year's employment, be sure to notify your insurer if this year's payroll is expected to be
lower.
34. If you have high production typists, be sure to minimize repetitive stress to avoid workers
comp rate increases, if one of them becomes disabled. Contact your workers comp carrier for
more information.

35. Look at your auto insurance coverage. Consider dropping collision on older vehicles. If the
car is only worth $1,500, why pay $200 per year extra for collision?

36. Raise deductibles on such coverage as auto collision, disability, property/casualty, and
liability insurance. For example, have disability insurance "kick in" after 90 days instead of 30
days.

37. Evaluate all your insurance policies for their risk/benefit, and decide which ones you think
you will really need. Don't over insure.
Page 41

Taxes
38. Don't overpay your income tax quarterlies. If you anticipate that your taxable income will
drop this year, don't pay taxes based on last year's income. Work with your accountant to pay
quarterlies based on a more accurate estimate. If you've already overpaid your quarterlies, ask
your accountant about a quick refund.

39. Close to year-end, schedule a tax-planning meeting with your accountant to shift income and
expenses. For example, shift income into the next year to decrease this year's taxes.
Office Supplies
40. Shop for the best prices. Don't pay too much attention to percent discount. Look at the
bottom line. No one pays full retail. Purchasing supplies in bulk may be worthwhile.

41. Use office warehouse companies like Office Club. They usually offer the lowest prices.
Many will deliver. Don't forget discount stores like Price Club, Wal-Mart, and Costco. Many
carry some of the most-purchased office supplies, like paper, pens, and laser jet cartridges. You
don't always need to buy brand names.

42. Keep close track of inventory so you don't have to pay someone to "run over" to the nearby
high-priced office supply store.
43. Lock the supply cabinet. Yes, this will cause grumbling. Explain that it will keep it neater,
and you'll be less likely run out of supplies.

44. Use fax instead of mail whenever possible. It's cheaper and faster.

45. Use the back side of old copies for rough drafts to cut your paper costs.

46. Cut "post-it" pads into smaller sizes to use for page markers. Or, have your photo processor
do it.

Equipment and Phones
47. Sell or donate excess office furniture and equipment. Storage space is expensive. You can

Page 42
sell it to employees, the public, or the vendor (on consignment). Donate it to local charities or
schools.
48. When leasing equipment, get an option to cancel due to closure or consolidation. Don't get an
"evergreen clause", where the contract always continues unless you give 30 days’ notice. They
are difficult to cancel, as the expiration date is hard to monitor.
49. Renegotiate your equipment leases. For example, change to a smaller copier. Buy shorter
maintenance agreements, so that, for example, if your copier volume is lowered, you can
decrease maintenance. See if you really need all your service contracts. Maybe it’s better to pay
for repairs on an ad hoc basis.

50. Reduce phone lines. If you have fewer staff, you need fewer phone lines. Cancel some of the
optional features you don't really need.

51. Make long distance calls and fax during off peak hours.
5.2 Some more miscellaneous cost cutting strategies
Choose the Right Site
1. Get the local CVB (convention and visitors bureau) to do the legwork in setting up your site
visit.
2. Use local destinations or smaller cities that can offer you more for your money.
3. Use a video camera to tape your site inspection. This will help you to remember the property
and reduce the need to revisit.
4. Research your hotel suppliers. Is there any competition? How busy is the market? Are you in
high, low, or midseason? How many years has the supplier been in business?
5. Research the rack rates, as well as group rates. Call the toll-free line or reservations desk of
the property or chain. This way you will know the "worst case" pricing.
Budget Smart
6. Communicate your budget information to the convention services manager. His or her role is
to work with you.

Page 43
7. Always budget at least 10 percent of your expenses as "contingency." This will take care of
unforeseen costs such as- labor strikes - bad weather - overtime - extra postage and mailings -
phone and computer hookups - cancellation insurance - speaker substitutions
8. Ask for a discount for cash payment on-site.
9. Limit authorized signatures, and don't accept charges signed for by unauthorized people.
10. Learn the tax laws for both your organization's location and the location of your event. You
could be eligible for tax breaks that you aren't claiming.
11. Know the value of your business. Keep a detailed history of all your events.
Contract Do's and Don’ts
12. Have several supplier options, and don't let any one supplier think he or she is your only
choice.
13. Develop long-term relationships with properties and chains you use often. Negotiate volume
discounts.
14. Prepare a detailed request for proposal. Communicate the value of your meeting.
15. Ask for everything and anything that you want right up front:
- complimentary coffee and tea in the rooms - complimentary meeting space, rehearsal space,
setup/tear-down - no package-receiving charges - continental breakfast in the meeting room -
extended-stay rates - free local calls - free office space - free or reduced parking for VIPs and
staff - late cutoff dates - reduced room rates for speakers - reduced room rates for staff - upgrades
for VIPs and staff - welcome gifts and notes - a specific amount of electricity for your event to
be underwritten by the venue
16. Add a clause in the hotel contract that states you will not pay the final invoice until you have
received a detailed post-convention evaluation.
17. Work with hotels to fill their "hot dates," or meeting space "holes." Though the low season
seems to be getting shorter, try to schedule meetings in the least busy times of the year.
18. Be flexible with your arrivals and departures.
19. Make sure the contract's cancellation clause is reciprocal. What if the hotel is undergoing
major renovations during your event? Or if there is a change in management?
20. Build up your F&B (Food & Beverage) totals with on-site meals and functions. Hotels will
be more willing to negotiate.

Page 44
21. Never sign a contract unless you agree with it in its entirety. Cross out or edit clauses with
which you do not agree, initial them, and get the supplier to initial his or her agreement.
22. Pay attention to cutoff dates. Keep in regular contact with suppliers even after the contract is
signed. Watch the business climate in that city/region.
Save on Staffing
23. Hire on-site registration and secretarial staff instead of paying for in-house staff's travel costs.
24. Know local overtime regulations.
25. Pay staff travel per diem. Outline exactly what they're allowed to spend on meals and
transportation.
F&B Tips
25. Deal with the chef directly. Challenge him or her to work with your meeting's goals and
concept. The chef will know what is in season and what is grown or produced locally, and can be
very creative if given the opportunity.
26. Buy your coffee, tea, and decaf in bulk or by the gallon, if at all possible.
27. Order as much as possible "by consumption." Uneaten food and drink can be returned and
not charged. This works well with soda and packaged foods like potato chips.
28. Re-use food if possible. Wrap uneaten Danishes and doughnuts from the coffee break and
provide them at lunch with the dessert options.
29. Instead of hot breakfast, serve an extended continental breakfast by adding fresh fruit, yogurt,
and cereal to the regular offerings.
30. Cut down on portions. Cut danishes and doughnuts in half. Offer mini-muffins, mini-
doughnuts, mini-danishes.
31. Use sit-down meals, which can cut food preparation labor costs as much as 20 percent.
32. Skip the dessert, salad, or soup. Dessert can be served at breaks.
33. Distribute box lunches instead of holding a formal, sit-down lunch.
34. Ask which other groups are using the hotel at the same time. You may be able to have the
same menu, thereby gaining economies of scale that can be passed on in cost savings to you.
35. Place expensive food items in harder-to-reach places on the banquet table.

Page 45
36. Avoid shrimp, oysters, and other expensive delicacies.
37. Compare a la carte vs. per-person pricing on a spreadsheet.
38. If you are able to, buy soft drinks in bulk and have your staff serve it. Sometimes hotels will
waive their "must use our banquet services" clauses for small hospitality suite functions.
Room Setup Savings
39. Find out which groups are in the hotel immediately before and after your meeting and work
together on your staging requirements. This will save you money in labor for setup and
teardown.
40. If a meeting lasts more than two days, keep the same meeting room setup.
41. Use skirted tables instead of renting secretarial desks for on-site offices.
42. Reduce the number of breakout rooms needed, saving audiovisual and setup costs.
43. Use the same room with two setups. For example, use the room seminar/classroom-style for
the educational session, and banquet-style for serving lunch and for breaks. Put up screens or use
plants to divide the space.
Speaker Secrets
44. Book local speakers or entertainers to save on travel expenses.
45. Hire now. Speakers and entertainers often raise their rates every year. Lock in at this year's
rates so hire in advance.
46. Negotiate a flat rate instead of fee plus expenses.
47. Piggyback speakers and entertainers with other groups in the same hotel.
48. Use versatile acts in more than one event.
49. Understand union rules and hire the minimum number of musicians/workmen that are
required.
Transportation Tips
50. Analyze the cost savings of airfare requiring a Saturday-night stay. It may not be cheaper
than paying for the extra room night plus applicable per diem.
51. Instead of meet-and-greet services, distribute vouchers for airport shuttles and/or fare for
public transport.
Page 46
52. While negotiating for your hotel or resort, request complimentary limousine service for VIPs.
Also inquire about reserved and complimentary parking.
53. Ask that your special guests and staff get reserved parking spaces close to the hotel entrance.
54. Ask the local taxi company for discount coupons for local shows, restaurants, and sightseeing
attractions.
55. Use the carrier's VIP lounge for the group's meet and greet.
56. Travel during off-peak hours (early morning or late evening).
57. Ask hotels whether they provide a complimentary airport-shuttle service and book with those
that do.
AV Answers
58. Sit down with your AV (Audio Visual) Company and work out the least expensive way to set
up.
59. Buy a TV and give it away later as a door prize instead of paying rental fees.
60. Use LCD panels instead of video projectors.
61. Don't arbitrarily put AV in every room. Ask speakers and moderators what they'll need first.
62. If you need AV for more than one day, negotiate a reduced rental for additional days.
63. Just before the meeting, reconfirm the speakers' AV needs. Presenters may have originally
requested equipment that they no longer plan to use.
Cash is King
64. Consider leasing versus buying your office equipment.
65. Change payment cycle to twice/month or every two weeks.
66. Stretch payments terms, pay no earlier than 30 days out (unless you can save on payment
discounts)
67. Develop cash flow budgets and invest unused cash.

Page 47
68. Refinance any outstanding loans.
Outsourcing
69. Consider outsourcing non-core functions (accounting, information technology

support, printing/mailing, etc).
Un-Fix Fixed Costs
70. Don’t be afraid to ask existing vendors for help. Possibly renegotiate contracts or Cut down
on hours/usage.
Use the Web
71. Consider using the web for booking airline and rail tickets. Centralize travel booking for
volume discounts when possible.
72. Move printed materials to your website (e.g. Annual Report, newsletters, member
communications, meeting brochures).
73. Take online/EFT (Electronic Funds Transfer) payments from members.
Program-Based Reporting
74. Allocate all costs (direct expenses, personnel and overhead) to each major program area.
Pull the plug on non-performing programs. Revisit budget assumptions quarterly to determine if
upcoming projects are still necessary or if they can be postponed.
E-learning
75. Utilize e-learning or CD-ROM based learning for staff. Renegotiate your credit card discount
fee at least annually as credit card volume increases. Find Low-Cost “Expert” Trainers.
E-mail

Page 48
76. Consider personalized e-mail marketing vs. costly snail mail and fax services.
Supplies &Purchases
77. Look at purchasing processes. Delay capital purchases. Establish Clear Policies and
Procedures. All check requests/expense reports should be authorized. Test internal controls for
evidence of fraud. Ensure that someone in the office is monitoring office supplies on a weekly
basis. Prepare inventory sheets of essential items. Charge programs/departments for supplies
used as a direct expense for their area. Consider a purchase order system. Evaluate Courier
Services. Consolidate carriers for volume discounts or use Priority Mail for non-essential items.
Bank account analysis.
78. Meet with your banker to review your monthly account analysis statement for potential cost
savings. Have traveling staff share a laptop. Setup a Virtual Private Network (VPN) access for
remote/traveling staff. Change your policy to require prepayment for all product purchases and
meeting registrations.
Audio/Web Conferencing
79. Consider audio/web conferencing versus in-person workshops. Archive for later use (sales to
members). Use for committee/task force meetings. Allow staff to share the cost savings. Develop
a program where staff receives a percentage of the cost savings. Set clear guidelines and consider
excluding senior management. Centralize the hiring of temporary/permanent employees. Have
all hiring run through one staff person. He/ She may be able to negotiate lower rates based on
volume. Better yet, ask employees if they know of individuals that may want to work part-time
or intern for a specified period of time. Save on the inflated temp fees altogether…
Evaluate All Staff Positions
80. When a staff person leaves, evaluate whether the position is still needed, or whether it can be
filled by a part-time person or outsourced completely.
Get staff involved.
81. Make cost savings everyone’s business! At least annually, review the association’s financials
with the entire staff. Convince them why they should care!

Page 49
Comparison-shop smartly.
82. When buying office equipment, use shopping comparison sites, such as
www.streetprices.com, www.Nexttag.com, www.Shopzilla.com, www.Pricegrabber.com and
www.froogle.com. To get the best prices, check out multiple comparison sites for each purchase.
Also check out prices on eBay as well as other auction sites like Bidville, ePier, and iOffer. Items
on less-used auction sites sometimes fetch lower prices than ones on eBay, or offer alternatives
to bidding.
Buy in bulk.
83. Chances are you'll save by buying items you use a great deal of in bulk at warehouse stores
like Costco. For supplies you use in your home business that aren't available at office superstores
or warehouse stores, consider joining other home business owners to buy items directly from a
manufacturer.
Pay Credit Card Bills Soon After They Arrive
84. Credit card companies will take as many as three days to log your payment, so your best bet
is to pay soon after receiving your bill if you have the money in your account and can pay the
balance in full. If you miss the closing date, you'll be charged the larger of a late fee or interest
on the old and new balance. There are a number of ways you can cut costs and save money in
your home based business. That's the bad news. The good news is that everyone is in the same
boat and we all have to face the reality that the current economy is not going to change
overnight.
Don't waste paper.
85. Save on the amount of paper you use in your home office by using: -- Personal information
management software instead of making notes on paper.
Ground, Maintenance:
86. Make our campus totally smoke-free, maybe we wouldn't have to pay as many grounds
people to pick up the cigarette butts. Stop the use of uniforms for maintenance and operations.
Stop hiring consultant. Release all temporary employees, contractors and consultants. Cut back
on management travel and seminars.
Energy/ Electricity cost:
87. with mounting energy bills eating into everyone's income and increasing the cost of doing
business at home, it's a good time to look into ways to economize your home business. First we'll
take a look at some ways to keep your energy costs in line, followed by some other ways to cut
corners and save.

Page 50
• Turn off all computer workstations and monitors when office time end. Currently, computer
rooms remain powered all day long, even when the room is not in use.
• Remind staff to shut down computers, lights, etc. when not in use.
• Perhaps we could turn down the air conditioning a bit at Bundy.
• post signs or install light sensors to turn off lights when you're the last person to leave a room.
• Heat our water with solar hot water heaters.
• Invest in drought-resistant landscaping. It can be as beautiful as the green and lush.
• Require all building and landscape designs be “green” and energy efficient.
• Eliminate gasoline allowances for ALL employees.
• Instruct the cleaning crew to shut off office lights when they finish servicing the area.
• Replace all restroom water faucets with one that have a motion sensor so no one could leave
the water dripping.
• Install low-flow toilets where ever feasible.
Miscellaneous:
88. Customer satisfaction is always the key to business success. But most companies lose focus
on this very vital factor and tend to concentrate only on cost cutting measures to beat the
recession. To maintain customer satisfaction levels you must appreciate the relation between
employee training, efficiency and quality of goods and services produced.
As part of cost saving initiatives when skilled employees are laid off or training costs for existing
employees are drastically cut down it will undoubtedly have a negative impact on the cost and
quality of goods and services produced. Inadequately trained people not only produce goods that
are low on quality but also high on costs due to rise in scrap and rework.
Poor quality of services puts off the customers and they tend to drift away. On the contrary if you
continue to invest in honing the skills of your people you will be able to produce superior quality
of services. This will help you to fare much better than your rivals. Better quality helps you to
keep your existing customers satisfied and also enables you to attract new ones.
Success in recession depends to a great extent on your ability to cash in on your rivals’ failure.
There is nothing like it if you are able to make your rivals’ customers crossover to you while
keeping your own customer base intact.

Page 51
Prudent companies do not view training costs as a drain on revenue but regard them as tools that
help in generating business. They use the down time resulting from recession to build employee
skills.
During slowdown the workload on your employees gets reduced due to fall in overall volume of
sales. This will make your best employees feel bored and also insecure. They may even be
tempted to look for better opportunities elsewhere. Instead of making these employees sit idle
give them an opportunity to upgrade their skills.
Training is no doubt expensive but the benefits often exceed the costs. They help you to retain
your best employees by giving a boost to their sagging morale. When the economy brightens
your people will be able to handle work in a more proficient manner and bring cost savings to
you in the long run. Providing training during recession is not as expensive as it is otherwise.
The training providers find very few takers so you can expect some good deals to come by. But
be wary of too low prices. If the quality of training is poor it practically serves no purpose. The
best alternative would be to use internal experts to provide the necessary training. Let your senior
executives share their experiences and knowledge with the staff. As all the employees benefit
from their knowledge and skills it leads to both training and team building. It also results in cost
savings, as you are not paying any outside trainers.
Cost savings are no doubt crucial during a recession but training is obviously not the right area to
economize. Only a well-trained employee who is capable of looking at the organization’s overall
performance can come up with financial savings at the micro level.
5.3 Conclusion
Human Resource Management must be able to address the right kind of demands related
to Human Resource functions during the recession. Human Resource Management must play a
highly proactive role in managing the issues of global recession by helping organization to
enhance their abilities to learn and collaborates, manage diversity, ambiguity and complexity.
Human Resource Management is responsible to manage the human resource of the corporate to
maximize the productivity, efficiency at minimal cost and maximize profit. During this global
recession, Human Resource Management is facing the many challenges and changes in
organizational level, workplace and HR department level itself. The challenges can be faced by
HR Managers effectively if proper strategies are implemented. The recession is the temporary
economic climate of the business world. It will be changed through more productivity at minimal
cost and maximize profit at moderate price of products in business.
The recession is healthy, from time to time. The recession helps to stop the businesses, which are
not bringing value added and the human capital is transferred to more vital businesses at lower
costs. In the companies, which survive the recession, the HRM Role is very important.
The recession is very dangerous for the companies. During the times, when the business grows
dramatically, the HRM Function introduces different policies, which are focused on spending
money. The company was able to carry all the costs and the employees started to take the
policies as the standard.
Page 52
In time of the recession, the HRM Role is to make cost cuts and the HRM Function has to
provide the list of the policies and the procedures to be cancelled or discontinued. The employees
do not like it, but the company has to return to the healthy basis for the future growth.
The HRM Function has to be able to identify the top potential in the organization quickly as the
company needs to make the cuts in the human capital of the organization. The HRM Function
needs to provide the tools to managers to inform their key employees about the security, the
company wants to offer to key employees.
Bibliography:
1. Electronic Resources.
www.neosolutionsonline.com
www.googlesearch.com
www.wikipedia.com
www.sitehr.com
2. Manual Resources.
HR manager’s views
Journals
HR Magazines
The Hindu News Paper Articles

Page 53

Role of HR in Turbulent Times: Chapter-1

Uploaded by

Copyright:

Available Formats

Role of HR in Turbulent Times: Chapter-1

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Role of HR in Turbulent Times: Chapter-1

Uploaded by

Copyright:

Available Formats

Role of HR in Turbulent Times

Introduction of the Sector

1.1 Meaning of Consultancy

Profile of the organization

2.1 Origin of Neo Solutions

2.2 Organization Profile

2.3 Services Offered

2.4 Vision and Mission of Neo Solutions

3.2 What can HR do?

3.4 Main HR Initiatives in Downturn Condition

3.5 HR priorities in Recession

3.6 HR Communication Strategies in Recession

3.7 HR Talent management in Recession

HR Role in Recession with Recruitment Strategy

4.1 Searching for talent

4.2 HR concerning areas while recruiting work force

4.3 Recommendations while employee facing negative challenges during recession

4.4 Points have to be focused by HR during Turbulent time

4.5 how to intact with employees during recession

4.6 Miscellaneous points to focus during downturn

4.7 affected HR processes by the recession

Summary and Conclusions

5.1 Key cost cutting areas

5.2 miscellaneous cost cutting strategies

Hari Naghu, MBA, SITAM College (Hyderabad.)

INTRODUCTION OF THE SECTOR

1.1 Meaning of consultancy:-

1.3 Management Consultancy: Organizations hire the management consulting refers to

1.4 Top Hot Trends in Consulting

Hari Naghu, MBA, SITAM College (Hyderabad.)

Hari Naghu, MBA, SITAM College (Hyderabad.)

PROFILE OF THE ORGANIZATION

Hari Naghu, MBA, SITAM College (Hyderabad.)

G.Naveen Kumar - Manager

Hari Naghu, MBA, SITAM College (Hyderabad.)

2.3. Services Offered:-

Hari Naghu, MBA, SITAM College (Hyderabad.)

The following are the types of searches followed:

The following are the advantages of Neo Solutions:-

1. Implementation of latest technologies into the training programmes.

Hari Naghu, MBA, SITAM College (Hyderabad.)

2. We understand the exact client/organization requirement, participant details their proficiency

Offering to the other Consultants:-

The following areas are being coordinated with the consultants:-

Hari Naghu, MBA, SITAM College (Hyderabad.)

Hari Naghu, MBA, SITAM College (Hyderabad.)

Hari Naghu, MBA, SITAM College (Hyderabad.)

Hari Naghu, MBA, SITAM College (Hyderabad.)

3.2 What can HR do?

v Revised leave structure for all employees

v Reduction in the different components of pay packages

v Identify the non-value added activities and resources.

v Giving show cause notices to the non performers

How to reduce the benefits cost?

Redesign compensation structure?

How to retain and develop high potentials?

Hari Naghu, MBA, SITAM College (Hyderabad.)

How to minimize the employee costs so as to avoid retrenchment?

Setting the context