Can Innovation Outwit Recession?

In a crisis, be aware of the danger – but recognize opportunities as well.

Downturn in economic conditions and we are ready with our two most easy, quick fix solutions of containing costs – lay-offs & budget freeze. Why can’t we think beyond this? Is it so difficult for HR to be creative?

It’s important to think ahead, times are bad now but will not remain so ever. Where do we want ourselves to be sitting when the tide turns? Lets take time to do that analysis and make sure when things start to change, we are exactly where we need to be to capitalize it.

To come out a winner in such tough times, it’s not always necessary to choose between increasing productivity and cutting costs. It can be both – all that is needed is ability to think differently and driving it across with conviction.

Think unconventionally – Trainings may still be possible

Cutting training budgets can be seen as a quick way to save money during a recession, but now is precisely the time to keep investing in the skills and talents of people. The skills of an organization’s workforce are its best guarantee of future prosperity and the best investment a business can make in these challenging times. All that is needed is finding a more cost effective approach of investing in developing employees. For instance, assign top performers or area experts to hold in-house training sessions and optimize on the internal talent pool which is available. If there are specific trainings wherein outside expertise is needed, organization can work out a new approach of sending one or two employees to learn basic tools needed to customise, personalise and deliver training courses internally.

On similar lines rather than having a policy of hiring freeze which may negatively impact customers and organizational brand leading to revenue loss, a different approach may be used. For instance, source talent through internal references rather than outsourcing it to some agency and modify organizational referral reward policies. For instance, instead of paying them bonus or cash prize, make the rewards more aspirational like being mentored by HOD or senior employee in the organization.

Consider Alternatives and explore possibilities – Layoff may not be needed

Organizations can consider various measures rather than involuntary workforce reduction. These include Flexi-Work options which includes tele-working and telecommuting, part-time, compressed/consolidated hours, annualised hours, staggered hours, and job sharing. Other options could be encouraging employees to take a sabbatical for educational studies or skills upgrading.

Infact, few companies have also adopted Flex-leave program where employees will get 20 percent of their salaries & benefits over a 6 - 12 month period. Stock options offered will remain in place for those who took the offer. Employees can take another job during their leave, but can't work for a competitor. These programmes not only help control costs, boost motivation but also increase productivity.

Another such way to optimize output from the workforce could be to ask them to spend a part of their time on corporate development activities where group of employees come forward to suggest projects which will help develop the organisation. Focusing on culture development, branding, better linkage of strategy and employee goals, improving the quality of performance reviews, internal communication systems are all good examples. This not only helps organizations to increase productivity but also decreases hiring needs.

Engage well – There may be enough opportunities to leverage

There is no denying, we are dealing with difficult times but shifting focus to the future and finding new ways to engage people will ensure above average growth going forward.

As work slows down everywhere HR can facilitate other departments and business groups to invest time in their people by instituting different measures at different levels. For top performers, it can take the form of giving stretch goals and challenging assignments to them and giving them enough decision-making authority and flexibility based on their skill, experience, and maturity levels. For the next level of talent, performance coaching sessions can be facilitated with their respective managers to further increase their productivity. It could guide employees in taking up some key projects/initiative which were important but kept getting procrastinated as they were time-intensive.

It will be good if we use this time effectively to plan ahead and mobilize for turnaround by focusing on reassessing employees’ skill sets, restructuring the organization, researching and exploring opportunities to value add to the business. For instance, find innovative ways of reaffirming employees’ confidence in the company such as blogging by the senior management or HR connecting with employees informally more often and giving a patient hearing to their concerns.

“Unless the downturn threatens a company's existence, executives should focus on rooting out operational slack and inefficiency, not on modifying or sacrificing strategic initiatives, which build capabilities for long term competitive advantage.” - Kaplan and Norton, Harvard Business Review, (December 2008)

A crisis is too good an opportunity to waste – put on your thinking caps and make the best of it!