Economic Crisis

During an economic crisis, employees will less likely to receive any increase in their salaries; even worst, In order for the employers to prevent hitting rock bottom, they would have to make some drastic changes with their HR programs, such as layoffs, hiring freezes and resetting merits for their upcoming year. Regardless of the given situations of financial trouble, employers will also try to make smaller cost-cutting changes to move forward and attribute the level of performance of those who are very valuable to the company’s growth and innovation. During a tough economic crisis, companies will need to adjust to longer-term programs strategies to weather the storm, and preserve valuable human capital and assets. The level of communication between the HR management and their employees is extremely important to help implement peace in the mist of chaos of financial recession.
Companies are expected to make changes according to level of their financial need and shortage. Some adjustments and solutions to this financial recession may include temporary policies to help the company survive an economic chaos. However, as the business outlook remains challenging, many employers will be force to buckle down and make more permanent difficult decisions. Short term policies would require that the HR management take a measured approach to cost cutting – increasing communication to employees, instituting travel limitations, etc. Some other temporary approaches would include layoffs of less efficient employees, freezing salaries, and cutting 401(k) matches. Given the financial statistics and magnitude of the economic recession, some permanent policy changes are needed in order to help establish a more robust economy and prevent any future economic recessions from ever happening.
Often, employees go through a review to find out raises and cost of living adjustments. But in an economic crisis, many businesses struggle to even stay float and make it through. For many of...