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The natural response to a recession is to stop spending on human resources (HR) entirely. However, such a unilateral decision only harms your chances of weathering a downturn in the economy. A better approach is to understand your spending limitations and use the resources you do have to obtain the greatest benefit for your company. The strategy for investing in HR during a recession should include hiring, training and retention.


It’s tempting to wait until the economy improves before hiring more employees, but the pool of available candidates will be smaller if you do that. More unemployed workers are available for hire during a recession, many of whom have simply been downsized rather than fired for poor performance. Hiring essential employees now will benefit the company in the long run. Take advantage of an employer’s market by hiring great employees at a lower cost. Bear in mind that you’ll need to ensure their compensation is still competitive once the economy improves.

Use the skills and experience of your new employees to set up new programs that will provide benefits when business picks up. For example, an experienced computer numerical control (CNC) programmer could develop and implement a direct numerical control (DNC) system to network CNC machines together. An expert in six-sigma process improvement can create a program that cuts costs by improving efficiency. A warehouse guru can establish a kanban scheduling system for just-in-time (JIT) manufacturing. Consider hiring a consultant if you need help with these new projects but can’t afford the cost of a full-time employee.


Your workforce will often have extra time on their hands in the recession, even though they’re still on the payroll. This period is a great time to develop job descriptions that will help you identify areas where workers were trained. A training program can also include cross-training that teaches employees tasks typically performed by other departments, which can facilitate shift scheduling. Another advantage of training current employees is that it increases your workers’ skill sets while keeping your employee base intact.

Formal training in process-improvement programs such as lean manufacturing techniques and six sigma allows employees to prepare the company for a higher workload. Preventive maintenance programs and “green” programs typically require very few resources other than time, which is something your employees have in abundance during a recession. It’s important to view training during this time as an investment in the future rather than an unnecessary expense.


Companies can retain employees during an economic boom by simply increasing compensation. Retention becomes more difficult during recession because the business may not have any capital available. Communication is the most important step in preventing employees from panicking due to the many rumors that arise about a company’s future during a recession. It’s vital that you instill confidence in your employees and provide them with as much stability as possible.

Financial compensation is certainly an effective tool for retaining employees, but you should also look beyond money during a recession. Publicly acknowledging employees for their good performance is particularly important at this time, as is soliciting their input on critical matters and entrusting them with greater responsibilities. Offering to run errands is another perk that can cost very little, but mean a great deal to your employees.

The book is still out on whether or not we are experiencing a recession now or if one will come in the near future, but we know this, prepare yourself now. Learn how Employer Flexible can help you hire, train and retain the employees you need now and in the future.


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