By Andrew Hupert

Part of the new recession-mythology is the notion that certain companies will emerge from this crisis stronger than they were when the global downturn started. Like many myths there is a grain of truth hidden deep within the cocoon of thrice-repeated tall tales. When the dust settles, there will indeed be a few new winners and a handful of impressive transformations. Many tough-guy bosses are in for a shock, however, when their best people suddenly take advantage of the recovering job market to jump ship.

HR issues will make or break your company’s recovery. Recessions don’t end with an official announcement or the change of a headline. Recoveries are murky and uneven – and there is an excellent chance that your firm or industry will lag others on the way up. If your shop is staffed with resentful, frightened or hungry people then your recession story may not have the happy ending you were hoping for.

Does your team feel lucky to be working for you – or are they getting sick of hearing you tell them how lucky they should feel?

Tips for managing your HR policy in a crisis:

1. Manpower planning is more important in a recession — not less.
Companies that grew quickly during the boom times started looking bloated and wasteful when the recession started. Headcount reduction is a quick & sure way to reduce expenses – but it must be done correctly. If you must lay-off a significant number of people, have a plan and execute professionally. This is no time for personality-driven purges or reactions to sudden market changes. You need to determine your ideal Staff/Worker – Manager ratio to avoid ending up with a distorted company structure. Make sure you are obeying the first rule of lay-offs: One deep cut makes you a surgeon – lots of little ones make you a butcher.

2. Avoid having working poor in your own shop.
Furloughs, reduced hours and enforced holidays require a delicate touch and consistent approach. Any reduction in real pay should be handled with compassion, professionalism and fairness. Bosses should be seen to be sharing in the pain – even if it’s just symbolic. Recognition and non-cash compensation is more important now than ever. Weigh cost-cuts carefully against the price in terms of morale and productivity. Don’t work your smaller staff to death just because you think it’s more productive – and don’t allow your middle managers to burnish their own performance at the expense of your staff’s health & sanity. Over-working people in bad times is a mediocre survival strategy but a dreadful recovery plan. Pay on time and in full. Clever accounting tricks should never harm your loyal staff.

3. Leadership counts more now than ever.
This is a bad time to try to start a democracy in the workplace. I remember one autocratic owner facing the end of the hi-tech bubble in 2000 who called the entire staff together in an impromptu brain-storming session about what the company could do to turn around their dismal sales. It confirmed everyone’s worst fears and drove morale into the ground. You need to look like you are in charge, clued-in and on top of things. Rhetoric matters. Don’t say that everything is fine if it isn’t, but don’t try to jawbone done expectations. Be the first to make sacrifices and the last to complain. Be compassionate, measured and consistent. No swaggering, no blaming, no blustering.

4. Rumor control – but don’t talk your own shop to death.
If there is bad news, get it out and over with. Have a house view on the economy, industry and global outlook. Don’t be ‘chicken little’ but don’t be a clueless hard-ass. You need to be compassionate but honest. Staffers who come to you with concerns aren’t necessarily whining or complaining – they may have valid concerns. Most of all, establish some kind of dialogue that includes your front line & younger staffers. Talking to your team is great – listening is even better.

5. No, they are not lucky to have jobs.
Even if they are, you should not be the one saying it.

When the recovery starts, the bull-market HR mantra is still valid – the people you want to hold on to the most will find it easiest to leave, while the people you don’t really need will hold on for dear life.

Andrew Hupert, China Solved

This is the third part of “Surviving the initial downturn is not enough – Part 1”. Here you can find part one and part two.