Black swans always come as a surprise. We did not expect that the coronavirus will cause such considerable damages to our societies and businesses. Nobody was ready for lockdown and such a sharp decline in business activity.
Our flexibility and change management mindset went on a trial again. Things are getting back to normal, but many questions still need answers. We cannot predict the future, and it is difficult to prepare any plans. However, what should Human Resources do after the worst moments of crisis are over?
First thing first. Keep the momentum. Change the operating rhythm first.
In any crisis, a quick reaction is one of the most critical success factors. Leaders make decisions without having sufficient data available. Nobody can any useful data, because they are not available at all. They have to use their gut feelings to ensure that the business will survive.
Also, they need to be quicker than competitors to save the market share. Human Resources team has to join the club and help the organization save as much cash as possible. As a business, we have to keep ourselves ahead of the curve.
We tend to underestimate the importance of momentum; we as human beings prefer keeping our status quo. It is the first lesson learned for Human Resources because the coronavirus crisis is an excellent lesson in Change Management.
Most companies invest tons of money into change management programs, but this crisis will test our flexibility. We see how efficient our investment in expensive programs was.
On the other hand, Human Resources has to strengthen its role as the Employee Advocate, because employees need to be heard. Leaders usually solve cashflow first. Human Resources must think of People first.
Learn to Live in a New Normal.
The world has changed dramatically in the first half of 2020. At the beginning of the year, we expected it to be another good year for the West. Nowadays, we undergo one of the biggest economic crises that will ruin many businesses and lives.
Additionally, we have to accept that a New Normal will stay with us for several years. Our habits will alter – less shopping in the city, fewer lunches at restaurants, less traveling and more home office. It will probably last one generation before things change again.
We need to realize that the coronavirus has created a new reality for everyone, not just Human Resources. We will have to re-set our HR Strategies because they are not up to date. They were fine yesterday; they will not fit into a New Normal.
We will have to review our investment plans. The cash is the king, and no CEO will approve an expensive HR project that does not return financially in the short term. Outlooks will be limited up to 12 months because of insecurities in the system. Think cheap, and you will succeed.
On the other hand, being digital is cheap. The crisis provided proof that many jobs can be done remotely. Not just for a few days, but they can be done remotely forever. They only require a small investment in technologies. There is an excellent opportunity for small digitizations that are not expensive, and the entire organization can profit quickly.
There is a new point in the strategic plan of Human Resources. We have to keep moving forward and being cheap. Usually, it is the best and safe tactic for uncertain times. However, HR will have to encourage different leadership behavior.
HR Managers will have to support (or push in some cases) internal clients to make brave, bold, and painful decisions. They will have to help them slim down organizations. Human Resources will have to play the role model, and other business function leaders will follow. A great HR leader has the HR redundancy plan already ready to be executed.
Currently, the customer is the winner. She will be the most crucial person in the room again. Margins will be slim, and the demand for products and services will be limited.
As a result, we will see many cheap and creative HR innovations, and many expensive HR projects will be abandoned. Coming years will be difficult for providers offering huge and expensive monolithic HR solutions. Contrary, creative and competition-winning HR teams will be able to run a great Employer Brand program at almost zero cost.
We will see a wave of many benefits cancellations. The most expensive ones will be discontinued first and quickly followed by benefits seen in all start-ups around the Globe. In the run to reduce the operating costs, small perks and sweets are the first victims of cash constraints in a start-up business.
Companies will try to keep employees on the payroll, but they will reduce all those nice extras, everyone was worried to touch in recent years.
Many changes will happen in Talent Development, Sales Incentive Plans, and Compensation and Benefits. Employees will get stringent targets, and they will earn less cash for the higher effort. Yearly bonus plans will be canceled or adjusted to pay less than they did in the past. Having a secure job will be a very welcome benefit for many people again.
Welcome to a new cheaper reality. It will not end soon.
Communicate, communicate! Then communicate even more. Keep asking questions.
Employees are smart, and they clearly understand that the organization is not in good shape. They expect that cost-saving exercise must happen. Tell employees as soon as possible what they can expect. It is also beneficial to communicate about milestones and triggers. Employees should understand what will trigger the next step.
During a crisis, you do not need a detailed communication plan. Most employees value honest communication most. They will listen to any news provided by the company immediately. However, the leadership team has to be ready for two-way communication. They will ask questions, and they will expect to receive honest answers. It is always better to tell the direct truth and not to raise unmanaged expectations.
Being silent does not help at all. We are social creatures, and Finance guys will not keep their mouth shut. Rumors will spread quickly, and the leadership team will lose control over messages and the mood in the organization.
If the team does not have an update, they should say there is no update. However, you cannot keep this message forever; at one point, the team has to stand in front of the staff and make the announcement. So, it is better to have a regular communication rhythm to keep employees informed about all details. Details are crucial; otherwise, employees will find out that the team is hiding bad news.
Raising employee engagement is always tricky. In a crisis, it is a job for the true leader. People in the organization believe that the leadership team will find a way for the team to survive an awkward moment. They want to be close to leaders, and they want to act autonomously.
Human Resources Back To a New Normal Plan
A New Normal will be different from what we have known and experienced so far. Running the business will be more difficult. Governments will push companies to de-globalize and shorten supply chains, and diversify a portfolio of providers. National security will become a topic in many Board Rooms.
All this will create a massive push on Human Resources. In the West, many skills and competencies required shortly are not available in the market. There will be a demand for technical expertise; HR will look for jobs that were outsourced to cheaper countries in the past. However, this will be short term. Later on, everyone will hire robotization and automatization experts. Industry 4.0 will become a new buzzword.
However, this crisis is also an excellent opportunity for creative and agile businesses. By promoting innovations and creativity, Human Resources can contribute actively to building a new re-born organization.
Also, we have to put some nice HR stuff on hold. Priorities that were important yesterday are no longer valid. Building an extraordinary Employer Value Proposition can be postponed; on the other hand, it should not disappear from our radar completely. There will be a day when we have to return to it and restart the effort.
Focus on your primary competitive advantage.
A customer is the most important person for any organization. Right now, in the crisis, the importance of a single customer paying the bill increases significantly. Human Resources has to support Sales function in keeping in touch with clients. Maybe, sales incentive schemes should be simplified and adjusted considerably temporarily.
Each crisis is also a new opportunity, and we should not forget about it. Over time, most businesses build an internal complexity. This crisis is a moment to look honestly at our internal procedures. Teams should introduce simplifications that will make the company less expensive.
Additionally, employees will appreciate it because their empowerment will increase again. It is the right time to return to basics and primary corporate values. It is time to explore your primary competitive advantages and make them visible again. Strip off all complexities.
The same principle applies to Human Resources practices and policies. As we grow the business, we add more controls into our internal ecosystem. As the company matures, we tend to trust others less. The HR team has to manifest that it can simplify its procedures. It has to stand as a role model, inspiring other business functions.
Do not shoot for perfection. Perfection is expensive and slow. Currently, the HR team must make decisions without sufficient data. It has to demonstrate a deep understanding of the business and the ability to make a bold decision without enough supporting data.
Build simple solutions around your customers. Even as HR.
Put your internal and external customers in the center of your initiatives. In the end, they pay the bill and HR salaries. Honestly, we tend to forget our customers in difficult times (sometimes even in good ones).
As we try to balance revenues and costs, we put a lot of stress on our customers. In a crisis, we often try to charge more for less. Human Resources should be aware of this behavior because it also affects our employees. Let us not leave our clients unattended.
As always, it is a coin with two sides for Human Resources. HR has to listen to employees what they say about customers. Both usually have useful proposals, and HR managers should encourage employees to talk loudly. They can help the business in overcoming difficulties.
On the other hand, HR professionals have to protect and explain tough decisions made by the leadership team.
Human Resources has to promote the encouragement and empowerment of employees. Just let employees do their job and allow them to find new creative ways how to run the business. They usually find innovations if they get the freedom to innovate.
Those solutions are not perfect, but they work, and customers like them. Easy and straightforward solutions are usually cheaper and quicker to deliver. Now, it is not an occasion to be perfect.
Reinforce cost awareness.
Nowadays, it is about cutting costs. The Finance Director will repeat the speech about costs over and over to ensure she is heard. Human Resources will have to discontinue many projects and initiatives. Or it will have to be smart and creative.
However, you can run many development programs and other HR initiatives cheaper. People do not have to travel across continents to spend two nights in an expensive hotel. They can participate online at almost a zero cost. Simple and efficient learning and development videos can encourage employees to refresh and upgrade their skills.
Also, Employer Brand or Talent Acquisition can utilize talented employees who do not worry about being short movie stars. You do not need to hire actors and actresses to pretend that they are your happy employees. Moreover, your staff can be authentic and trustworthy for external audiences. All those recruitment promo movies can be recorded just for a few extra bucks.
Adding a new employee will become a mission impossible. Managers will complain that they have not enough resources to handle all duties and requests. Human Resources has to think creatively about splitting responsibilities in the team, adding further tasks, and providing limited pay rise to current staff. People will like it in general because they will have some extra in their pockets.
Redundancies? Decide and act quickly.
Those from us who remember the Financial Crisis in 2008 have a competitive advantage. Current circumstances cannot surprise them. They understand what will come and how they should prepare and execute it.
Also, they remember how they were forced to stop all beautiful HR development projects and how they were forced to change their focus on things that matter when the business crisis arose. All businesses were suffering, there was no demand, and the cash was the king.
Many businesses will have to cut the workforce significantly in weeks to come. They simply lack the sales volumes, and their cashflows suffer, and they generate losses.
It is better to do it as quickly as possible to eliminate the stress from the organization. Some leaders believe that employees will not discover missing sales. Nowadays, most people have access to daily reports, and they can build an opinion almost instantly.
Not having information is stressful for employees, and the leadership team needs to act bravely. Leaders cannot lose the engagement of remaining employees. Also, each lost day limits the chance of saving the organization for the rest.
The HR function needs to be ahead of the curve. If employees expect redundancies, it is beneficial to release redundant roles sooner than later. It is great to have a detailed analysis and a plan, but this time it will not be perfect. Some mistakes will happen because being quick is mission-critical.
Long waiting for detailed inputs makes it just worse, and the required redundant roles increase significantly over time. Employees will not focus on saving the business; they will focus only on protecting their jobs. They will keep talking in endless discussions in corridors, and rumors will spread quickly.
Act quickly, communicate often, and provide support to those who have to leave the organization.
Introduce and roll out People Care Program.
When the crisis hits the business, we always forget about the most valuable asset – employees. We care about keeping revenues, pushing costs down, and stopping all investment-heavy projects. We keep our focus on the cashflow; we ignore the fact that the people will make the business grow again. We just expect to take care of themselves.
However, an excellent Human Resources function always centers its activities around its critical customers. Employees are among them. Best organizations introduce some sort of People Care Programs or Initiatives.
Employees realize that some alignment of the cost base to new normality will happen. They assume that redundancies will be inevitable. On the other hand, the organization can take care of employees and release them properly.
The business can manifest even in this situation that it is a socially responsible employer. It can postpone redundancies in specific cases, provide additional benefits, increase the redundancy package, introduce the outplacement program, and inform all staff regularly about the latest business development.
It is the role of Human Resources to ensure that employees are included in serious discussions. They cannot be treated just as a resource; employees will save the business, not products. Employees should feel like the only ingredient of cost-saving initiatives. At one point, the army of engaged employees will have to turn to customers and explore new ones in a much worse market.
The organization must manifest that it cares for its employees. Redundancies are not a welcome topic, but Human Resources can make the transition easier for leaving employees. A People Care Program can release stress and calm down fear and negative emotions.
It is not the end of the world. Remember it.
This corona crisis is not the end of the world. It has just fastened some HR trends, that would happen anyway. Also, it does not destroy the environment as we know it. We just need to adapt quickly, and as always – the one who changes best will be the winner.
All HR professionals should know that the quickest player is not the winner, but the one who adapts best is a winner. Being agile and open to new ideas will help to win.
Human Resources must allow others to act quickly and to be agile. HR Policies should be reviewed; many of them canceled and discontinued.
Promoting trust to employees and providing sales guys with increased delegated authorities is a good beginning of the New Normal. And it can stay with us in the future when we forget about the coronavirus and the COVID-19 disease.