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Home News HR WhatNow : Recession Survival Guide List (1 of 2)

HR WhatNow : Recession Survival Guide List (1 of 2)


Enable Group | Jul 28, 2020

Blog, For Employers, For Employees ● 5 min read

Singapore enters technical recession as GDP plunges 12.6% in Q2

For the readers who are currently operating in any capacity of the HR personnel in a company it is official: Singapore has entered into its worse economy performance, possibly, since its founding year. Report read here.

This is the situation that we all as companies operating in Singapore have to deal with and many of the companies you are in may succumb to the pressures of sustaining workforce costs amidst diminishing revenues.

Companies committed to surviving a recession have an obligation to their employees and this is the time where the human resources departments play an integral role in reassuring employees about matters such as job security, earnings and the company’s strategic direction.

There are so many underlying themes for HR to deal with during a recession, layoffs, restructures, mergers, salary adjustments, withholding allowances & benefits, morale, sentiments; and the list goes on.

We have compiled a 2-part survival guide series for you.

It is impossible to provide all the answers within an article especially since no one is in the same situation with the same conditions, but in best efforts we have compiled a highlighted list that we hope you can draw from to get your desired solution.

Trust Leadership

The role of HR is to build employees’ trust in leadership through honest, effective and frequent communication, regardless of the circumstances. One of the reasons employees report leaving their jobs is that they lose trust in company leadership, according to Leigh Branham’s book titled, “The 7 Hidden Reasons Employees Leave: How to Recognize the Subtle Signs and Act Before It’s Too Late.” Branham studied more than 19,000 exit interviews produced between 1999 and 2003 by the Saratoga Institute to write his book. When HR or company leadership neglects communication, the result is that employers risk their employees losing confidence in them. During a recession, it’s all that more important to communicate and build employees’ trust.

Company Status

If the company is recession-proof, meaning it provides necessary products or services, the role of HR is to remind employees that the company is forging ahead despite an economic meltdown. As the saying goes, the only sure things in life are death and taxes; therefore, the most recession-proof businesses are likely mortuaries and accounting firms. On the other hand, if the company will be affected by a recession, HR’s role is to assist company leaders in describing the business strategy for staying afloat and keeping employees apprised of the company’s status and direction.


During a recession, employers may be inclined to offer overtime hours instead of hiring new workers. The cost-benefit factor is that hiring new employees costs more money than paying overtime wages to current employees. Therefore, some employees may welcome the opportunity to increase their paychecks. In either case, HR’s role is to assure employees that their jobs are safe. If employees’ jobs are at stake, HR should explain what process the company will use to notify employees of layoffs, whether they will receive severance or early retirement opportunities and the timing of potential layoffs.

Payroll and Benefits

During a recession, employees’ pay might not go as far as it would during an economic recovery. Therefore, HR should provide employees with options for increasing their take-home pay. Options might include adjusting withholding allowances, reducing contributions to their savings accounts or re-evaluating their health plan choices. HR also should counsel employees on additional ways to reduce payroll deductions, such as suspending payroll deductions that some employees elect to donate to charitable foundations.

Review Operations

There’s no substitute for good information. Armed with the right data, you can confidently adjust organizational policies based on economic conditions.

  • Track metrics. Measuring the right things is an important start. In planning for a recession, if you don’t have metrics in place, you’ve got to get them. Otherwise, you’re shooting in the dark, the HR needs to be the one that has a calming effect. You don’t want knee jerk. You’re making decisions with facts and figures.

    Data on productivity, compensation, training and other items related to business goals and financial results can help an organization know what impact downsizing will have. Cutting across the board generally isn’t effective, so HR needs the information to make changes strategically—but carefully. If you cut critical positions, it can make a company anorexic.

  • ​Document performance issues. Before a recession, it’s important for HR to make sure that evaluations accurately reflect the work of employees. Some businesses think they can sweep underperforming employees out as part of a reduction in force. But if there’s no indication of problems in reviews, the organization opens itself up to lawsuits. A less-productive worker who’s older, for instance, can file suit claiming he was laid off because of age.
  • Allocate scarce resources. Companies anticipating a poor economy can save money by making cuts to merit increases and bonuses. It’s up to HR to figure out how to allocate limited bonus money by working with managers and looking at performance reviews. But salary reductions are another story. Starting new employees at lower levels can lead to discontent when they find out colleagues are earning more.
  • Evaluate ongoing programs. Data can reveal what programs can be trimmed and which are effective and needed. For instance, if the company has a high rate of workplace accidents, it might need to increase, not cut, safety training.

    Training and development programs tend to be first on the chopping block. But training is often critical since it builds capabilities and focuses workers on the future

Using a SWOT (strengths, weaknesses, opportunities and threats) analysis, HR can pull together cost-benefit information about which initiatives contribute the most to the business and its bottom line. Which programs should be scratched depends on the organization and its values and weaknesses, so the analysis will differ by employer.

HR departments need to ask themselves, “What can we eliminate, what can we automate, what can we outsource?

– End of part 1 of 2 –

About Enable Consulting

Established in 2013, enable Consulting is a specialised HR solutions provider for small and medium-sized enterprises.

We believe that having a strong and robust HR function is a key driver for continuous growth in any successful business. It is on this belief that we have built many successful partnerships with clients across different industries.

We are a people business and it is our talent pool that defines us. Each and every one of our consultants is highly professional with many years of experience in HR management and services.

Our Consultants are PMC certified to further be able to help local SMEs improve and optimise their HR operational efficiency through Singapore Grants. enable is about offering affordable, high value adding solutions to improve business performance; while at the same time nurturing and inspiring a fair and respectful working environment. But above all, enable is about enabling you.

Contact us for a non-obligatory Q&A consultation today

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