COVID-19: A Five-Point Agenda for Strategic Human Resource Management
By Krishnan Hariharan, Online Learning Facilitator, Australian Institute of Business.
The Coronavirus pandemic has snowballed into a global crisis for business. From a Human Resources Management perspective, crises on a global scale affect people management, employee behaviour and their very future at work. Hence, HRM needs to step up in addressing and resolving the issues caused by this crisis.
The impact of Covid-19 can be seen in the context of two other global events of this century that have redefined the basic tenets of management, forcing businesses to revisit their assumptions.
In 2002, SARS, the first pandemic of the century, resulted in 916 deaths, affecting 8422 people across 32 countries, according to the World Health Organisation’s report of 2003. Globalisation was still evolving, and morbidity was relatively low. However, the reality of a globally transmittable virus plunged consumer confidence and led to job losses, resulting in significant labour market uncertainty in several Asian countries.
In 2007, the Global Financial Crisis (GFC) unleashed a new phase of turmoil for business management and governance. A financial catastrophe, the GFC wiped off $34 trillion in wealth by 2008 – $14 trillion in the USA, $10 trillion in Europe, Africa and the Middle East, and $9.6 trillion in Asia – according to a 2010 report by the Roosevelt Institute.
Now in 2020, Covid-19 is a different beast altogether, dwarfing SARS and GFC in sheer scale. Death toll from the pandemic has crossed 240,000 by the first week of May 2020, with 3.5 million cases around the world! The gravity of economic impact could not even be estimated yet as the catastrophe still unfolds!
All three global events are characterised by the common factors of uncertainty, plunging demand for products and services, rock-bottom business and consumer confidence, economic stagnation / recession, and labour market volatility in an intricately interconnected world. However, the scale of the Coronavirus pandemic has profound implications for skills management as well as training and development, among other HRM-related issues.
So, how can HRM gear up to the challenge?
- Plan for contingency: HR planning should take centre-stage. Businesses should take their HR leaders into confidence in contingency planning exercises.
- Reform workforce planning: The HR department should redefine “core employees” and expand the scope of contracting. Businesses may desist from committing to large workforces that would weigh them down when the economy grinds to a halt.
- Manage skills and expertise: Cross-training of employees (imparting wide range of skills) and job-enrichment (vertical loading of authority / responsibility) could mark the difference between shutdown and survival. Broaden employee skills, decentralise decision making, and delegate responsibility to optimise workforce performance and minimise overheads.
- Redesign jobs: Remote-working can be the new norm in many occupations. Job design should be revisited and employees trained to embrace this reality.
- Transition from HRM to Strategic HRM: There will never be a more pressing time for SHRM to stake its claim at the very top of strategy formation – any strategy that fails to consult HRM, and vice versa, could be devastating for business.
The world has changed, and so should business. The time for HRM to take the lead and break fresh ground in preparing business for a new future is now!