Key HR trends in the post-pandemic scenario
The entire world is reeling under the tremendous impact of COVID-19 that is spreading like wildfire and leaving behind its deadly trail across the world. According to the predictions by IMF, there will be a contraction of 3% of the world economy in 2020 in comparison to 2.3% GDP growth in 2019, and the world is projected to witness its worst recessions that it has ever seen.
The pandemic is bound to have a varied impact on businesses depending upon their size, magnitude, and nature. According to reports, several businesses especially among the start-ups and small scale industries are on the verge of closing down permanently whileothers may struggle to sustain. Beginningwith salary / wage cuts to lay-offs/ retrenchment, employees have seen it all and things might get dreadful if the situation persists.
During this imminent recession, there aremany sectors like health-care, pharma, medical equipment, gaming, insurance, online media & entertainment, e-learning, digital payment/fintech, food processing, etc. thathave witnessed increased demand and created new job opportunities. Being at the core of every enterprise, Human Resources are critical to the functioning of any organization. But like everybody else, they could have never anticipated this sudden paradigm shift that has taken place.
Let's have a look at the key HR trends that will dominate the post-pandemic scenario:-
1. Compensation Restructuring:Given the unprecedented times, many companies have either already reduced or are planning to rationalize / lower compensations on a temporary/permanent basis. They are also working towards restructuring compensation in a way that can bring down fixed costs and increase variable packages. Variable structure which is intended to be linked to productivity and performance parameters, will help in reducing the fixed costs of the enterprise while attempting to improve productivity levels and performance targets to the desired levels.
2. Deferment of Increment and Promotion: Due to the unexpected economic downturn and the consequent impact on profitability, a majority of companies are either holding back or are deferring appraisal cycles making sure increments and promotions are pushed away by at least a quarter.
3. Promoting Gig Economy:Companies may prefer hiring contractual workers through agencies rather than hiring permanent employees which would power savings on compensation costs/other expenditures that are incurred on permanent employees and also provide the comfort of fixed time hires or project hires, which can be managed from time to time without affecting an employee morale issue.
4. Redeployment/Re-skilling: Companies are mapping their employees' competencies and exploring the possibility of transferring / re-skilling some of their employees to other divisions/ locations wherever there is a demand or likely to have demand in near future due to the economic impact of COVID-19.
5. Embracing Technology: Companies might continue following social distancing in recruitment processes and carry out interviews and hiring through virtual platforms only. They are resorting to intelligent automated systems that offer virtual screening environment and interviewing experience, instead of conducting in-person interviews.
6. Employee Communications: Employees are the greatest resources of any organization and play a pivotal role in its growth. During such unprecedented times, many companies have increased their communication with employees as they realized that their morale levels can have a direct impact on customer engagement and overall business results. Employee communication has always and will continue playing a crucial role in any business.
7. HR Policies and Procedure Manual: Companies are redevising their HR manuals and policies related to work from home, insurance coverage, etc. and assessing the need to make modifications keeping the unforeseen situations like these in mind. This will help in ensuring the safety and security of the employees and the organizationís growth.
Before taking any strict measure, the companies must remember that people are the biggest asset in any organization - attracting & retaining the right talent takes a great deal of time and effort. Every movein people management must be viewed from all angles more specifically Ė talent acquisition, talent optimization, and talent retention.
COVID-19 has brought about a paradigm shift in the role an HR from hiring, recruitment, and appraisals to new working models, performance-based compensation restructuring, cost-optimization, etc. The smoother the transition the better shall be the survival of the business.