Navigating Financial Challenges: HR’s Role in Supporting Organisations

Contrary to reports from the end of 2022, indications suggest that the UK economy may have just swerved a recession in 2023. Nevertheless, the economic outlook remains uncertain, to put it mildly.

It was just over a year ago that we saw massive job cuts at Twitter (now known as X) and Meta (the parent company of Facebook, Instagram and Whatsapp). Though each company had its unique reasons, these job cuts heralded a broader trend. Many retailers also struggled during 2022 during the ongoing ‘Cost of Living Crisis’. This trend continued into 2023 with retailer Wilko falling into trouble in the Autumn. This is not UK specific either, with many countries around the world also expected to see a slowdown in economic growth as we head into 2024 and a New Year.

Many of us today recall the impact of the ‘Credit Crunch’ in 2008. Observing the current landscape, echoes of that time seem inevitable. In early 2023, Credit Suisse bank required a government backed takeover by one of their main competitors, UBS. This happened after customers withdrew £55 billion. This evokes memories from 16 years ago, when in 2007 when Northern Rock witnessed queues of people waiting to withdraw their money.

How can HR support with ?

HR teams can often work late and be left with the literal task of turning off the lights and locking up the office/store/worksite (other places of work are available!). Figuratively speaking, this is often true as well. HR teams are frequently among the last to oversee a company navigating a transition. This could be managing redundancies, supporting a TUPE transfer after a merger or acquisition or another process that requires a formal consultation with employees.

To use the example of a company being closed down and mass redundancies being made, you would expect a HR team to be heavily involved in the planning, implementation and any follow up activity that may be required. And once the majority of the workforce has been through such a redundancy process and final payments are made to the impacted employees the HR person/department faces the task of making themselves redundant (following the correct process of course).

But what happens when the lights need to come back on? Or, as is more often the case, what happens when a company needs to implement cutbacks without completely shutting down?

Identifying areas for cost-saving measures can be challenging and time consuming for any business. Once the decision has been made and areas identified then communicating clearly, adhering to due processes, and managing the emotional stress and implications become crucial. This is particularly the case for business owners and company directors when they are monitoring other economic factors affecting their company’s viability, this could include factors such as energy bills, supply chain disruptions and other revenue streams.

While various cost-saving strategies exist, sometimes redundancies become unavoidable and handling them with empathy, compassion and adherence to the proper procedures is critical. By doing this it can help to mitigate potential future grievances and/or employment tribunal claims, which in themselves can cause further costs to be incurred.

Beyond the employees directly affected by layoffs, the aftermath for employees who remain with the company in the aftermath of cutbacks can have a huge impact. Awareness of “Survivor Syndrome” and/or “Sinking Ship Syndrome” and how to address these is vital and having a short-term strategy to address these are essential. However, ensuring the engagement, productivity, and focus of these employees in the long run is also pivotal for sustained business success.

If you would like to have a chat about implementing your HR strategy, making some changes to your organisational structure, checking your employment documentation is up to date or if you have a general HR question that you’d like to discuss then please get in touch with Adam via email or by phone on 07597 248428