Economic_Crisis

During an economic crisis, employees will less likely to receive any increase in their salaries; even worst, In order for the employers to prevent hitting rock bottom, they would have to make some drastic changes with their HR programs, such as layoffs, hiring freezes and resetting merits for their upcoming year. Regardless of the given situations of financial trouble, employers will also try to make smaller cost-cutting changes to move forward and attribute the level of performance of those who are very valuable to the company’s growth and innovation. During a tough economic crisis, companies will need to adjust to longer-term programs strategies to weather the storm, and preserve valuable human capital and assets. The level of communication between the HR management and their employees is extremely important to help implement peace in the mist of chaos of financial recession. Companies are expected to make changes according to level of their financial need and shortage. Some adjustments and solutions to this financial recession may include temporary policies to help the company survive an economic chaos. However, as the business outlook remains challenging, many employers will be force to buckle down and make more permanent difficult decisions. Short term policies would require that the HR management take a measured approach to cost cutting – increasing communication to employees, instituting travel limitations, etc. Some other temporary approaches would include layoffs of less efficient employees, freezing salaries, and cutting 401(k) matches. Given the financial statistics and magnitude of the economic recession, some permanent policy changes are needed in order to help establish a more robust economy and prevent any future economic recessions from ever happening. Often, employees go through a review to find out raises and cost of living adjustments. But in an economic crisis, many businesses struggle to even stay float and make it through. For many of these businesses, offering raises on top of current salaries will necessitate a dip into the profit pool, or the layoff of less helpful employees to afford pay for high performing employees. In such hard times, it makes economic sense to let go of employees who are not bringing in revenue and to keep those with exceeding performance. Because of these layoffs and drastic changes in the employees’ budgets, employees struggle and face financial challenges through a year of raised prices and increased financial burden. In many cases, employees need to understand that salary freeze is a better alternative to massive layoffs. Other businesses fire highly paid employees and bring in new workers willing to do the job for far less pay. While this is not necessarily a wise business decision, it is the only way many employers see to survive the hard times when current salaries for original workers reduced or eliminated profit margins. An economy crisis does take a toll on everyone. For many workers, current salaries are no indicator of things to come. A raise does not mean that a company will survive intact any more than a hiring and salary freeze means that a business is going to fail. In new and uncertain times, employers are doing their best to make a business work in a setting they have never experienced. For workers, the best thing to do is to perform well and exceed employer’s expectations. By proving themselves a necessary asset, they decrease their chance of losing their job and increase the chances of a raise while also creating an excellent resume and recommendation in the chance that they do find themselves in the market for a new position.