Although some are now calling the economic downturn "the Great Recession," anyone who has worked during the last few years, would probably agree that it has not been a "great" experience. The effects have been felt globally, and many nations are taking significant actions to attempt to bring quick recovery. The news is full of what's happening on a macro scale. In a recent survey of HR and payroll professionals, Ceridian asked questions about how the economic crisis has affected organizations and departments at the micro level.  

"Great Recession" may have offered HR its long sought strategic opportunity

Although some are now calling the economic downturn "the Great Recession," anyone who has worked during the last few years, would probably agree that it has not been a "great" experience. The effects have been felt globally, and many nations are taking significant actions to attempt to bring quick recovery. The news is full of what's happening on a macro scale. In a recent survey of HR and payroll professionals, Ceridian asked questions about how the economic crisis has affected organizations and departments at the micro level. 

More than 200 companies of all sizes were polled, representing an even mix of smaller (fewer than 500 employees) and larger organizations (with more than 5,000 employees) across a diverse range of industries (manufacturing, retail, services, etc.). Most of the survey questions related to the impact of the recession on organizations and departments, and the actions that were taken in response to the recession. Almost half of the respondents (49 percent) represented human resources, 24 percent represented finance and 27 percent represented C-level positions. This mix of functional areas was very beneficial as it led to a valid organization-wide perspective as well as a departmental perspective -- most importantly, the HR department. 

Some of the survey results were expected, others were surprising:

  • The recession had a negative impact on 94 percent of organizations surveyed.
  • Yet at the same time, 80 percent of organizations also report a positive impact from the recession.
  • Actions such as budget cuts, reduced hours/part-time hours and workforce reductions were seen as leading to negative effects on the organization -- specifically low morale and employee dissatisfaction in 90 percent of the organizations.
  • Actions such as offering flex-time, virtual work, job-sharing and developing a more cohesive leadership led to more positive outcomes.
  • HR departments saw negative results such as the brain drain from HR due to loss of long-term employees.
  • HR departments saw positive effects from greater creativity/innovation and an increased presence of HR in strategic discussions.
  • The largest and the smallest of companies experienced the most significant negative experiences while mid-sized businesses (with 500 - 1,500 employees) reported the highest positive impacts from the recession.
  • Low morale and dissatisfied employees is pervasive; 90 percent of organizations reported an increase in these areas.

  • Nearly 40 percent of organizations reduced company-paid health care coverage benefits between 2007 and 2010, representing the largest change in benefits associated with the recession.

In the coming weeks, Ceridian will publish an executive brief with the full survey findings and recommendations to help organizations emerge successfully from recessions. These recommendations include:

  • Realistically assess both the positive and negative impacts of your organization's actions in response to the recession.
  • Compare your organization's responses with those outlined in the survey.
  • Plan innovative HR responses to future business changes that may lead to more positive impacts.