HR should accept blame for retrenchments in an economic downturn


The economic downturn has provided a real life case study of Strategic HR management or mismanagement. For a long time I have been saying that if HR wants to be regarded as a real strategic player, then they have to be willing to take accountability for the achievement of the organisational goals. As an example, if Company X wants to achieve a 20% top-line growth for the next 3 years, HR should be held accountable for x% of that 20% growth figure. The HR solutions that they provide should be measurable to the extent that they can show they have or have not contributed their fair share.

Likewise Human Resources should also be partly accountable for not achieving the organisational goals ~ you can’t be a strategic player, then in the bad times absolve yourself of your obligations to help achieve the company goals and return to being the “shoulder to cry on” for all the retrenched employees. If companies are retrenching because of the economic downturn, who’s fault is it? To blame the economy is a cop-out and simply too easy for HR.

An effective strategic HR department would have been regularly monitoring and doing scenario planning  with regards to their strategic workforce plans. This strategic activity would have highlighted the possibility of excess staff in the forthcoming months. Out of the scenario plans, HR solutions would have then been produced to support the likely scenarios. These could have been practical plans like reducing non critical skill recruitment, active skill redevelopment of resources that you would not want to leave the organisation, preparation of the organisation for a slowdown, early retirement options, flexible work arrangements. 

Being proactive to possible scenarios is what makes HR a value adding department and will certainly breed trust and support by line management and executives. Being reactive and thinking that your role is to execute the retrenchment policy and procedure is not value adding and is a sign of misunderstanding what it means to be a strategic HR department.

So is HR to blame for retrenchments in this economic downturn? – absolutely if they consider themselves a Strategic HR department.