Management retains ‘soft side’ during crisis

A new study has found that human resource management in Ireland has retained its ‘soft side’ despite the difficulties posed by the economic crisis. ‘Soft’ methods connected with development of staff have been used, rather than 'hard' HR, characterised by curbing pay rises, cutting jobs and cutting working time. Unions meanwhile have played a defensive role, with their focus being on job retention and minimising the impact of cuts to employment terms and conditions.

Managing the crisis

A new book has discussed how human resource management in Ireland has reacted to the economic crisis. It shows how HR has managed to retain its ‘soft side’ – tactics aimed at motivating staff through encouragement and positive communications.

The recently published book Recession at work: HRM in the Irish crisis by William Roche, Paul Teague, Anne Coughlan and Majella Fahy is based on research conducted by University College Dublin (UCD).

It concludes that Irish HR managers have not ditched the ‘soft side’ of HR in response to the recession. ‘Soft’ HR can be classified as communications between HR managers and employees designed to maintain employee motivation and commitment, such as skills development and encouraging more employee involvement in aspects of work.

The study finds that HR managers have, not unexpectedly, engaged in the ‘hard’ side of HR – introducing curbs on pay and bonuses, making reductions in headcount, cutting working time, and curbing recruitment and promotion. However, they have also had to be ‘steadfast in implementing the softer side of HR practices’. Firms have used communications to manage the recession, as well as holding onto staff through redeployment.

In the survey, 444 HR managers were asked for their input. About half said they had not cut their training and development budgets. The survey also revealed two main patterns of response.

  • Roughly half of the respondents have focused on pay freezes, curbs on overtime, short-time working, redundancies and more rigorous working to mitigate the difficulties the recession has brought on their business;
  • Half of respondents revealed they have implemented fewer measures and had mainly frozen pay and limited overtime.

Improvisation under pressure

Focus groups were also engaged as part of the study, composed of 30 HR managers and 17 union officials. From these groups it emerged that there has been:

…improvisation, often under extreme pressure, and a concern to balance cost savings with maintaining goodwill on the part of employees (and sometimes trade unions).

The study also looked at the position of HR managers within the leadership structure of companies. It shows HR managers have ‘fared lightly’ relative to others during the recession. HR had ‘avoided radical reconfiguration [and] depletion of resources’, while such managers ‘gained new influence as business partners, mainly on foot of a hard HR agenda dictated by short-term responses to business challenges’.

The book’s authors note: ‘The dependence of line managers on HR expertise has also grown as redundancy programmes and other retrenchment measures have become common.’

However, this ‘new centrality’ of HR according to the book:

…does not appear to have been commonly translated into leadership with respect of HR strategy over the medium to long term, nor into strong advocacy of soft HR. Though HR managers are ‘working the pumps’, they are only infrequently ‘navigating from the bridge’.

Unions on the defensive

Trade unions have prioritised the protection of jobs, often negotiating concessions on pay and conditions in return. They have, however, sought ‘clawback’ mechanisms for such concessions if and when there is financial improvement. During the process of restructuring, unions have sought a high level of involvement to shape the end result.

Yet HR managers reported that little in the restructuring plans changed following engagement with union officials, with very few ‘clawback’ mechanisms agreed. However, they also said employers had not used the recession as an opportunity to cut unions out of discussions. Half of unionised companies found that unions had been ‘realistic and constructive’ in talks; just a third of HR respondents said unions were not particularly cooperative.

A sort of equilibrium had emerged, the book’s authors argue, that involved management agreeing to work within collective bargaining while unions accepted that management would drive policies to deal with the recession. This brought benefit to both sides: management avoided damage by not souring relations with unions, while unions kept open ‘representational channels’.

However, the ability of unions to act assertively has been somewhat weakened. They have lost the national institutional support of social partnership, members fear losing their jobs, while a willingness to take voluntary redundancy has undermined union efforts to retain jobs.

Andy Prendergast, IRN

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