Saas Bahu and Recession.

Managing a recession begins much before the recession. There are several macro-economic indicators that hint on the imminent recession. Overheating of the economy is one of the early signs of the imminent delcine in growth. The govt steps in with monetary policy to reduce inflation. (or induce recession?)

The first signs of recession are the declining sales pipelines across the industries. ( real state,and Finance sectors normally lead the recession). Instead of tightening the receivables, companies offer credit breaks to their customers. Only when the recession has been declared, and the sales/ business has dipped, the companies sit up and take notice of the problem. The layoffs are initiated. Layoffs of operations team indicate low sales, but layoff of sales force normally indicate lower sales effort. The hiring is frozen, attrition is at an all time low, the expenditures wrt R&D, trainings are put on hold, and lot of analysis is done on innovative ways to reduce the cost.

Once the economic recovery is initiated, ( keep a close watch on the monetary policy and the supply of money), the first indication would be coming from the interest sensitive sectors, the sales starts to increase, the attrition starts increasing and innovative policies and internal communication must be initiated to increase retention. The production / service capability will now need to be increased and this would involve additional expenditure, hence with increasing sales, there would be increasing pressure on the cash position of the company. So the daunting task for HR is to identify the trends from the economy, proactively take steps to engage and retain the existing dissatisfied employees, look for labour supply to meet the increasing demand for resources, leverage on the KM processes innovatively to meet the increasing business demand.

Like sales is during recession, profitability is during economic boom. :-) During the boom, it is easy for the sales team to decrease the profit margin on the product /service provided, in order to win larger volumes of business. Simlarly for the HR there is a tendency to hire associates at the fourth quartiles of the exisiting salary ranges. A boom period is the time to increase the profitability, build cash reserve and plan to take strategic advantage during recession.

There was a movie that had been released recently, Saas Bahu aur sensex, a hilarious title. This title reflects the ups and downs in a relationship, and truly this cycle is an integral part of our lives. For me the Saas bahu serials that I have to watch is more torturous than the recession itself. We are all aware and confident that the good days are not far away. :-)

This is one of the good ppt on how to tackle recession. http://www.slideshare.net/indusnet/strategies-for-tackling-recession?type=presentation