Recession Proof Your HR Department
Suzanne Malausky
Executive Coach | HR Advisor | Author | Speaker | EverythingDiSC? Partner
Dear HR leaders,?
Do you need to stretch your HR budget in 2023??
Here are ideas from me and my fellow HR experts for managing your HR budget in a challenging year. Read our thoughts below and let us know if you have other ideas to offer.
Recruiting in a Downturn @Amylyn Kyler
As we look back over the years some of the best team members have been lost during an economic downturn either through layoff or employees exiting due to fear of a pending layoff.
Recruiting carries a significant overhead, especially in the cost of salaries and recruiting tools which can be one of the first targets for reduction.
Typically, your recruiting tools are on a one-year contract which you cannot escape mid-year leaving you with one thing left to cut…your staff. "It really hurts to let go of your best recruiters when you KNOW you WILL need them again."
As we enter the new year sitting on the bubble of a possible recession, consider how you can save money on annual contracts for recruiting tools. LinkedIn recruiter seats and parking spots can be AWFULLY expensive, especially if you have layoffs and no one to use them. Are tools like Monster, Indeed, Simply Hired, etc., bearing the type of people you are truly hiring? If hiring slows, is it a better investment to hold reserves in your budget for outside help who will carry the burden of the costs of the tools when you are able to hire?
How can recruiting INCREASE revenue? Yes, there ARE ways…?
The first step in developing a "revenue impact" focus is for recruiting to begin to convert its results into dollar impact on revenue so there is no doubt about their impact on the bottom line. Work with the CFO's office to convert talent-management results (i.e., quality of hires, speed of hire, strength of the employment brand, and recent hire retention rate) into the actual dollar impact that they have on revenue. If you can demonstrate that HR and recruiting actions directly increase revenue, you will avoid many of the budget cuts that are targeted toward functions considered to be "overhead cost centers."
Go into the new year with a strong plan. Evaluate your team talent, plan your spend on recruiting tools wisely, and secure and develop your relationships with outside executive search firms and recruiting contractors that you can use on an as-needed basis at a significant cost savings. Are there recruiting partners on your list that really do function as an extension of your team? Find those firms that focus on long-term relationships over revenue, and they will be sure to serve you well.
Considering Compensation?@Tamara Brownfield
领英推荐
The most important message I am relaying to my clients is to be on the more conservative side during the salary increase process this year. It is going to be important not to react to inflation; as historical data shows, inflation has fluctuated with much greater variability while salary increases have remained relatively steady around 3-4%. Total salary increase budget projections for 2023 are 4-4.2%, and I definitely recommend staying within the 3.8-4.2% range. We will have a much better idea after Q2 2023 how the competitive market has moved and the cost of labor effect. It will be a good opportunity for organizations to conduct a competitive market study, assess their salary ranges and how their employees compare, and if needed, make market adjustments (or budget for market adjustments) at that time. It is easier to add to salaries than take back, as well as potentially avoiding lay-offs or RIF's due to providing additional dollars to fixed costs, in the way of base salary increases, that may not have been necessary due to the organization already paying in an extremely competitive position versus the market.
As far as talent attraction and hiring - it is important to have a formal compensation/Total Rewards philosophy and strategy in place - to guide decisions and apply programs consistently and equitably across the organization. A formal compensation structure, which supports the philosophy and is reviewed versus the competitive market every year or two, will ensure pay ranges maintain competitiveness and are aligned with the market when competing for talent. It is dangerous to react to individual candidate salary demands that work against your organization's philosophy and structure, as it will create potential inequities within the organization and decisions that are not fiscally responsible for your company.
HR Headcount?@Trisha Earls
Two tactics come to mind when I think about ways to keep the HR team recession-proof. First, I use this challenging time to develop my high-potential players with stretch assignments. Rather than outsource that project when budgets are constrained, I asked high-potential players to take on new assignments to build their skills and have them learn something outside of their usual area of expertise. I frankly acknowledge the additional work but emphasize the skill-building aspect of the assignment.?
Second, if I, unfortunately, must reduce headcount to help the company navigate the recession, I think of functions I can outsource or hire someone part-time to fill. During the pandemic and the resulting "great resignation," talented HR practitioners left companies and instead opted to consult part-time. There is a plethora of talented HR consultants who can manage your employee relations matters, internal hotline complaints, as well as training and development initiatives on a project basis rather than carrying the cost of a full-time FTE in those roles. This keeps those critical projects moving so that you do not lose ground during the recession and ensures you are providing critical HR services to employees.?
Developing Leaders @Suzanne Malausky
The first minute you stop investing in your leaders' development, the turnover clock starts ticking. Today's employees, and goal-driven leaders, want your partnership in their professional growth. When budgets are tight, here are a few ideas to explore for keeping the clock ticking in your favor.
Understand their needs. Leadership principles may be universal, but development is personal. So, ask leaders what would help them. Send a no-cost survey asking for both the "what"(new skills they want to build or topics of interest) and the "how" (preferred modes of learning like books, experiences, or self-study.). You might be surprised how their answers can inspire clever budget-friendly solutions. Examples like hosting a book club, job shadowing, and stretch assignments are low-cost, high-return possibilities that might work for your leaders.
Recruit them to Teach. Collaborate with your best leaders in creating a custom leadership Masterclass for your organization. Host monthly or quarterly sessions where leaders share their experiences and expertise with others. Open dialogue builds self-awareness, confidence, and communication skills and helps drive a learning culture. Consider topics focusing on product knowledge, business operations, financial acumen, giving feedback, or motivating the front line.
Host a Talk is Cheap Campaign: Bring everyone on board the development-on-a-budget bus by asking leaders to spend time in their one-on-ones talking about things other than work performance. Provide a library of relevant topics to discuss and support professional growth, like new research studies, current leadership articles, or industry news.
Invest energy and ideas to stretch your money this year.
Managing Director @ Kyler Professional Search | Connecting Top Talent with Great Companies
2 年As a past Corporate Recruiting Leader I know how hard it is to run an internal recruiting team on a small budget. Hoping this info is thought provoking and helpful in some way. Thank you so much for including me in this article Suzanne Malausky. Happy to have had the opportunity to be a part of your venture and appreciate you sharing your knowledge and connections. All the best in the New Year!