4 HR mistakes in a downturn


In times of economic uncertainty, the significance and importance of the HR functions becomes even more crucial in order to protect the future of the business. Hence, human resources often play a critical role during these difficult times to ensure that the best employee resources are available when conditions begin to improve.

Here we have a look at some common challenges and possible solutions.


Complete hiring freezes

Making sweeping hiring freezes will not help a company in the long run. Instead, new hire requests should be evaluated on a case by case basis. At this point it is important to post some key questions to the department head, such as, “Is this position critical?” or “Will leaving this position vacant put undue stress on existing staff?”

There are some creative ways to get round a hiring freeze. One example is to consider if the position could work on a part-time, job rotation or flexi-time basis. In this instance, a professional contracting employee can also help relieve workload pressures without adding to the headcount. This will also aid the organisation when economic conditions improve as they would already have existing employees who are already trained and familiar with company culture ready to be converted to a permanent position.

Failure to plan

While in the midst of a downturn, it is important to remember that it will not last forever. This is the time to take a step back, look at your business and determine where your strengths and weaknesses are within the HR function. HR departments that cease all their HR functions will find themselves having to play catch-up when things eventually improve.

This is also an ideal time for companies to implement new systems, update training materials or literature and generally catch up on internal housekeeping.

Take the time during a downturn to focus on the company’s best performers. 

Do not overlook top talent

Take the time during a downturn to focus on the company’s best performers. Do they need upskilling or training? This is especially valuable if you are not able to give them an increase in pay grade, job promotion or bonus. Through these measures, they will still feel valued and likely to stay with the company. There are several non-monetary incentives that companies can provide. Examples of these are additional leave allowance, training and life coaching.

Most prudent employers are not pushing down base salaries as this generally has a catapult effect on employee retention. This occurs when the market conditions eventually start improving and when there is more hiring activity on the market. Some companies have even increased the base salaries for a group of employees identified as key resources as part of their retention strategy.

Prolonging the interview to offer process

The best talent will always be sought after, even in a downturn. Taking weeks or months between the interview and offer stages will almost guarantee that you lose your first choice candidate for that position in your company. Ideally, before starting the recruitment process, HR should have lined up the schedules for all key decision makers who will be playing a role in the selection process, ensuring that the entire selection process can be ideally completed over a two to three week period.

Ensuring a seamless hiring process is likely to give the potential employee a good impression of the organisation. Candidates are more inclined towards firms with a confident and swift recruitment process. A disruptive interview life cycle further projects uncertain times and either creates more doubts in their minds or gives top talent the opportunity to be snapped up by other companies.

With our extensive experience and in-depth knowledge of the Singapore market, we are well-placed to help you with your hiring needs. Contact us today for a confidential discussion.

Hiring advice