HR survival tips for tough times

Financial markets and economies around the world are in turmoil. Some have described these as events that happen once in a century.

While the full impact on the UAE and GCC may still have to evolve, it is critical for companies to be prudent, and to manage their financial and business risk.

I remember many years ago when I worked out of our US operations, in times of trouble some of my US clients would even manage costs by ceasing to offer guests coffee. While I won't go that far, there are clearly things that should be done from an HR perspective.

The first HR action to consider, is a hiring freeze. Minimise the exceptions made to this rule. I think it is doable.

The UAE has been in growth phase over the last three years at least. In times of growth, people don't focus on internal efficiency. I am sure most companies have the headcount to get the job done efficiently.

Then start looking at internal efficiencies. Start with basic productivity measurements such has the number of transactions per employee, or the number of customers per employee. It doesn't need to get any more sophisticated than that. The inefficiencies will become evident even with these basic calculations.

Also look at imbalances in roles and the headcount between departments. Don't hesitate to move people around to get the job done.

Compensation

Then look at compensation and increments. Most CEOs, boards, and HR heads have felt these last few years almost as if a gun had been put to their heads, with unrealistic expectations in terms of fixed and variable compensation from new employees as well as increments.

It's time for employees to be grateful for good employment in a time of global crises, and giving something back to the organisation. It's time for bringing balance to this issue with more realistic increments, and mostly driven by performance.

I have written extensively on how Employee Stock Ownership Plans (ESOP) have been incorrectly designed in favour of employees in the UAE. The last thing any Board should do now, is to compensate employees even more due to the collapse of UAE stocks. Tough luck.

HR cost alignment

Lets move on discretionary staff expenditure. Travel must be curtailed to only what is essential, and only for certain roles, or key levels of management. Entertainment expenses and phone bills need to be managed.

Any planed off-site activities with significant expense need to be deferred. If your firm is allows leave to be cashed out instead of taken, I would disallow it. These expenses can be avoided.

Finally, lets move to office space or infrastructure related to staff. I would defer any refurbishing of assets. Also, if lease renewals are coming up, I would seriously consider not renewing some leases. See if core space can't be used more efficiently.

In the last few years, a well-known author has talked about the world being flat. This is from the standpoint of the firms being provided market opportunity on a global basis.

Unfortunately, the other side of the same coin is also true. Financial and economic challenges also travel quickly across a flat world.

Don't underestimate it.

- The author is the managing director of Cedar Management Consulting International.