HR Departments Asked to do More in the Face of Cutbacks in Finances and Staff

Corporate human resources departments are facing severe staff and revenue cutbacks even as they are being asked to do more for their companies, concludes a new Conference Board report.

About half of the companies in a Conference Board flash survey of leading HR executives reported significant downturns in revenue, almost all followed by some reductions in force. Many also reported cuts in the staffing of HR and in support for key HR initiatives. Every HR expense in every company is now being severely scrutinized.

"Companies that based ambitious HR initiatives on the expectation of supportive corporate growth strategies have adjusted to the prospect of uncertainty," says David Dell,
Research Director, Capabilities Management and Human Resources Strategies, The Conference Board, and author of the report. "Now there is little time or money for strategy. The emphasis is on execution."

The report shows that HR executives are facing an array of contradictory objectives.  They are being asked to maintain high levels of service at the business unit level, support employees who have great personal concerns about their future, build their company as a great place to work, and at the same time, find areas in which to scale back. 

For most companies, carefully crafted compensation strategies linked with pay for performance are the latest weapons in the fight to keep, motivate, and attract talent.  

JUGGLING GROWING RESPONSIBILITIES AND REDUCED COSTS

HR is in the very difficult position of juggling three competing priorities:

1. Building and nourishing long-term corporate capabilities to stay successful, when the future is very uncertain.
2. Sustaining and increasing productivity and revenue without the large technology investment companies counted on in the past decade.

3. Limiting or even reducing employee costs.
  
"While certain company practices have changed, the imperatives that makes HR truly important in the long term continue," says Dell. "HR needs reliable ways to get, keep, and motivate the right people. The people value of companies is beginning to receive attention from sophisticated investors. Though money for HR projects and new initiatives may be harder to come by, the cost benefits are better, and are getting more serious consideration than in the past.  Perhaps most encouraging is that even companies reducing their work forces are accelerating
their efforts to be perceived as good employers."

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