With economists projecting a better than 60% chance of a recession happening by late 2023, there’s no time like the present to investigate the impact that a recession could have on your business. REDW’s team of human resources professionals and compensation experts share their pro tips of how an HR Consulting team can help employers lower their risk and not be caught off guard.
1. Optimize Your HR Function to Reduce Costs
Now is the ideal time to bring in trusted human resource experts to evaluate your HR function, before the potential crisis arises. Getting a head start will help ensure your organization is not currently wasting money on suboptimal tools, resources, or technology.
Build a staffing plan that can withstand fluctuations and be easily adjusted to changes in revenue. In case of furloughs, separations, or larger reductions in force, you should adapt or create policies and procedures that comply with regulations while supporting your organization during challenging times.
Review your employee benefits and incentives and consider purging those that are unused or underappreciated. Every dollar you invest in benefits should directly stoke engagement.
2. Revamp Your Compensation Planning with Specialty Software
A compensation planning tool will provide you with immediate access to market-competitive pay ranges—based on reliable and current survey data. Using it will allow your organization to create an internally equitable compensation structure that that is agile in the face of changing economic conditions.
The ideal compensation software is rightly sized for your organization. Out-of-the-box reporting capabilities that allow you to quickly project costs and assess a variety of compensation models will support your recession staffing plan. Exploring these models provides you and the executive management team with solid data for the various options and helps make better informed decisions.
3. Prepare for the Future with Customized Leadership Training
Investing in the professional development of your leadership team is a major step for managing risks for long-term success. Training tailored to your workplace culture and existing policies is especially valuable.
Promoting and reinforcing compliance with employment laws—in advance of belt-tightening— will instill confidence in your management team while helping them better prepare for changes that could be on the horizon. If a recession prompts the need to reduce your workforce, thorough documentation of job performance will be a helpful resource when making difficult separation decisions. These adjustments are key to helping mitigate recession risk by both cutting payroll costs and maintaining your path toward your organization’s future success.
4. Gain Assistance with Unemployment Claims
Employers can cut costs by minimizing unemployment tax premiums. Clearly communicate progressive discipline, comply with termination policies, and have an effective unemployment claims management process in place.
Developing and implementing a thorough process can be time-consuming for an already busy HR team. Outsourcing this process is a way to save a significant amount of money. Controlling the unemployment tax premium—typically a percentage of taxable payroll that is increased based on claims experience —ensures that claims are reduced and are ultimately not charged to the employer’s account.
5. Boost Efficiency and Reduce Payroll Costs with Outsourced Support
An additional way to control costs in advance of a recession is by determining which functional areas or job functions could be outsourced. This should be considered across the board, as well as within your HR department.
For small to medium-sized organizations, REDW’s team of HR professionals offers the support of in-house employment counsel, executive-level HR leadership, and day-to-day human resources functions for the price of a single HR Manager-level team member.
Outsourced support reduces salary expense as well as payroll costs such as employee benefits, PTO/sick leave expense, and bonus/incentive compensation.
Helping Employers Reduce Recession Risk
As the possibility of a recession looms, it’s essential for businesses and organization leaders to consider and begin implementing strategies to mitigate risk. From leveraging good software choices to outsourcing support, these strategies can help reduce costs while boosting efficiency.
Custom leadership training provides valuable skills and helps manage risks for the long term, while skillful unemployment claims management can concurrently save a significant amount of money. Projects like these provide cost and efficiency savings that can often fully offset the expense of engaging trusted consultants.
Our team is eager to help you become recession ready. To discuss optimizing your HR function, request a demonstration of our Compease software solution, set up customized leadership training, streamline your unemployment claims process, or to learn more about our on-call hourly support and outsourcing solutions, contact Cristin Heyns-Bousliman, Esq., THRP, Principal and Practice Leader of REDW HR Consulting. Be prepared for whatever comes next with friendly, skilled business partners who are invested in your success.
