How should Australian HR handle a recession?
Some economists say there is a 20-25 per cent chance a recession will hit Australia in the next 12 months. How should the HR industry adapt in an environment that most practitioners have never even experienced?
The HRM Online article, "How should Australian HR handle a recession?" quoted Russell Reynolds Associates Consultant Tina Shah Paikeday on why leaders have to be agile to weather the storm during the downturn. The article is excerpted below.
During a downturn, a different type of leadership is required at all levels of business, says Tina Shah Paikeday, leader of Russell Reynolds Associates Global D&I Consulting Services. Leaders need to be agile enough to navigate difficult and constantly changing circumstances by shifting strategy.
At the same time, HR officers need to have tough conversations with their business leaders around talent within the workforce, and about ensuring great resilience.
“That’s going to be the skill set that will enable you to weather the storm during the downturn. What you want to look for are leaders who are able to change from being pragmatic to disruptive, depending on the circumstances, in terms of their strategic approach,” says Shah Paikeday.
“As we anticipate the economic downturn, we’re going to see hiring slow down. So in that case, identifying the people who do have that agility is something I’d recommend. In addition to that, as we think about talent in the downturn, the emphasis from leadership advisory firms like ours will be on development.”
Most important, she says, is identifying those in the organisation at all levels who already have agile leadership skills. Next up is to develop those people and others. If a large gap is identified, if the organisation does not have enough agile and resilient people available in the current workforce, now is the time to hire for those traits.
What about diversity and inclusion? Is that put on hold when times are tough? Actually, that’s when it becomes even more important, says Shah Paikeday.
“The perspective on this is that organisations able to harness the power of diversity are able to get to higher levels of innovation, which is important when you’re trying to navigate highly ambiguous situations,” she says.
“You have novel problems to solve in a recession, and the research shows that when you have those diverse perspectives at the table… you’re better able to navigate the circumstances in the same way that I was talking about leadership agility.”
To read the full article, click here.