Inside the HR field’s evolution since the housing-market crash in 2008

Back in the olden days—you know, in 2008—HR departments were often treated like couriers for the C-suite, given the thankless tasks of administering pink slips and sliding tissue boxes across a desk to workers who lost their jobs as the housing-market crash gave way to the Great Recession.

“Back in 2008…HR still was not seen as like a partner to business, it was still seen more primarily as an adversary to business, because of the ways it advocates for people,” Sarah Morgan, director of DE&I at HR consultancy Humareso, explained to HR Brew.

Flash forward to present day, and new economic crises loom: Layoffs and hiring freezes are grabbing headlines, while tech companies rescind job offers amid historic inflation and uncertain markets. Yet again, economists have ample reason to yell “Recession!” from the rooftops. But as the economic headwinds veer south, HR departments are increasingly viewed by companies less as functionaries of the ugly side of downturns, such as layoffs and furloughs, and more as stakeholders who can potentially help their companies weather turbulent economic conditions, according to three experts who spoke to HR Brew.

HR has “definitely taken a bigger seat at the table” since the Great Recession, explained Chris Whaley, founder and principal consultant of the HR consultancy Escape to Expand, who was previously VP and head of HR at Philips Healthcare.

“In the years since [the financial crisis]...We have an HR profession that has evolved significantly, to the point where that business-acumen piece is almost a must-have if you want to succeed in this profession,” said Mike Bergen, senior partner and North America region leader at the executive staffing agency Kingsley Gate Partners.

As dark clouds hover over some embattled industries, 2008 can be a teachable moment for HR as companies seek to avoid layoffs and budget cuts this time around, the experts said. People pros, they maintained, can use hindsight and their more pronounced positions to soften the impact of this downturn on workers and provide transparent, compassionate leadership in uncertain times.

Data days. When you think about HR’s evolution, think of a four-letter word: data.

Nowadays, HR leaders “can manage what culture looks like…and measure what engagement looks like. And we can see what the impact is to our business results when these things are impacted,” Bergen said. “A lot of people now recognize that there’s a lot of HR that is very data-driven and analytical.”

During the Great Recession, according to Bergen, HR’s approach “was very reactive; it was: ‘Let’s cut the people that are part of our business that, are nice to have but not directly impacting our bottom line.’” Now these decisions are increasingly informed by insights from tools like the workforce management dashboard UKG, Morgan said. She explained how technology could hypothetically show leadership organizational fault lines, such as wage inequality: “We’ve had 10 raises this year, and they’ve all come out of this one department or this one area. We’re completely forgetting about this other group of individuals.” Those insights have proven instructive as HR departments increasingly ground their approaches in data, Bergen said.

Shadowy then. Engaged now. During the Great Recession, Morgan was an HR generalist at a Jiffy Lube franchise in North Carolina. Her location was spared from layoffs, but as the national employment rate dropped, Jiffy Lube corporate was rocked by the downturn, she recalled to HR Brew.

Layoffs and budget cuts sparked “feelings of burnout and stress and resentment within the organization” as workers at her location pressed on with fewer resources. She recalled navigating the rocky terrain without much finesse, underestimating the importance of direct communication. “I don’t know that [workers] necessarily understood that [layoffs were] related to what was going on in the economy, because we were not as transparent about the reasons for those decisions at the time.”

Morgan’s experience isn’t unusual. According to Whaley, HR was not encouraged to be as transparent with employees back then, especially if a company’s immediate outlook was grim. “In the past, we were [kind of] kept away from employees’ point of view, because you didn’t want to cause anxiety or strife or distraction in the business,” he said.

It’s become increasingly difficult for HR departments to operate that way now, Whaley explained, as “social media” and “24-hour news cycles” have, in his view, afforded workers more of a window into how businesses and industries are faring in the broader economy.

Instead of cutting quick and deep, Whaley recommended that HR departments ask their employees for guidance on where resources can be shifted. During his time at PhilipsHealthcare, he said that his team “had a program where we asked for people to put in ideas for things to stop doing. And it sounds kind of counterintuitive, but we ended up with employees coming up with ideas. As a leadership team, we didn’t even know some of these things were happening.”

Another way to offer transparency and warn of a possible storm brewing: town-hall meetings, Morgan said. “It’s a good time to allow almost like a town hall, where the information is presented, and people are given the opportunity to ask questions and interact.”

In that sense, HR may still be a courier of sorts, but one that reports information back to the people, rather than just the C-suite.—SB

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