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Companies could be repeating the same human resources mistakes of the last recession

 

Employers cutting staff risk creating skill shortages in the future

Companies are putting their long-term future at risk by repeating short-term cost-cutting measures used in the last recession that were subsequently regretted, according to reports.

Reports say that employers cutting experienced staff and new trainees risk creating skill shortages in the medium term – as happened as a result of the last recession. A third of companies are planning to cut full-time roles, having already cut back on recruitment and shed temporary workers, according to a survey of 883 executives across Europe.

Britain is bearing the brunt of the recession, with 57 per cent of firms planning cuts, compared with 32 per cent in Germany and 37 per cent in France.

Executives were also asked which cost-cutting measures worked during the last recession. Despite admitting that cutting back on training, bonus payments and company events had hampered employee commitment, respondents continued to take these actions now. Hiring high-performing employees from competitors, which had the most positive impact on employee engagement last time round, was one of the least popular moves.

While HR leaders are under “colossal pressures”, long-term workforce planning remains important. Sectors which have already experienced skills shortages, such as nuclear energy, are ill-advised to cut back on recruiting across the board and on training and development activities.

Due to demographic changes in the UK, employers should not expect a ready stream of younger workers when they want to increase their workforce numbers again. Employers should find ways of flexing the organisation without actually losing staff, so that experience and skills are not lost.

 

What executives are planning to do in this recession
Cutting back on recruitment – 69 %

Cutting back on company events – 54 %

Cutting back on company performance-based bonuses – 45 %

Laying off full-time employees – 34 %

Cutting back on individual training – 33 %

Cutting back on individual performance-based bonuses – 27 %

Hiring high-performing employees from competitors – 9 %