But there is good news. For too long HR teams have complained about being unable to win a place on the business's strategic table. We are undoubtedly living in turbulent times, but if the HR function can grasp the opportunities these present, it might finally be able to prove its worth as a partner to the business.
At the start of this downturn, many commentators rushed to defend and protect training and development budgets. In principle, it is wise to maintain these in a downturn, as past recessions have clearly shown us that those organisations that manage to keep some of this activity going recover more quickly than those that have sacrificed this to budget cuts.
But it is naïve to assume that all activity can remain the same. Inevitably there will be budget reductions for HR, as there will for the rest of the business. For HR to prove it can make a difference, it has to focus the remaining resource on the people who will really make a difference to the organisation and help it survive and thrive.
No wonder, then, that a firm and clear idea of the organisational goals is so important. Only then can you prove how training, development and performance management activity are aligned with these. Measurement is still a critical activity but chances are all the traditional measures used in easier times will not be as effective in this more difficult period. What's more, it is vital that HR is providing information to the rest of the business in a useful format that can be understood against its own objectives.
So who are the people who will be able to help steer your business through this bleak period? Every organisation is different but our research has shown there are two groups that should be among the last to be affected by budget reductions: senior leaders and the so-called high potential groups. Moreover, now is the time for those in talent and accelerated learning pools to step up; this is the greatest opportunity they will have to learn, and they can help spread new ways of working and new organisational cultures around the business.
But it is also first worth re-examining the existing pools that are in place and assessing whether they are matched to the current business needs. Inevitably there will be fewer stretch assignments and senior vacancies available. If there are too many employees in the pool, it will lead to frustration and demotivation.
The HR function is uniquely placed to get an immediate sense of how the business is coping with the challenging environment. As well as the more obvious indicators of mood, such as employee feedback and engagement survey scores, our clients are telling us they need to put a ‘finger in the wind' and discover exactly how senior leaders are likely to react in a crisis. Leadership deficiencies, or ‘derailers', are inevitable, but in simpler times they are easily masked. In harsher environments they can be thrown into sharp focus. Knowing the behavioural traits as well as the skill sets of key employee groups can help organisations ‘manage around' any shortfalls, either by restructuring teams or reviewing processes.
Understandably, with new business priorities and a rapidly changing environment, employees will be facing new additions to their role and remit. Our research shows that during times of change, additional support is needed to ensure executives and leaders remain successful. Stepping into a new job or role can be incredibly stressful, and in today's world everyone is coping with change. Making sure there is support and training to help people stepping into new positions will ensure better long-term success. This is particularly true as leaders and managers will be facing competing demands, such as cutting costs while also winning new business. Helping managers deal with these kinds of paradox, as well as coaching and communicating better than they've ever had to before, will reap rewards.
Many businesses have effectively imposed recruitment freezes on themselves. Only HR is in the right position to look across the organisation and identify where people are being under-utilised.
Undoubtedly this will not all be easy. But re-evaluating HR's role in a few key areas will really prove that the function is a true partner to the business, and finally worthy of a place on the top table. And it will need to do so; globalisation and the rise of new technologies have not gone away. The business environment we emerge into as we pull out of this downturn is likely to be just as challenging.
Simon Mitchell is director at talent management consultancy DDI UK