Sizing Up the Downsize

I have been an HR professional for over 20 years. During that time, I’ve experienced directly what happens to many HR professionals during an economic downturn. To put it bluntly, first – you become something of a “downsizing hit-man” for your organization in order t cut costs. By that, I mean, you review your workforce plan, who absolutely has to stay and who can go, and you lay off employees. Then, after performing this very unpleasant chore, you may get laid off yourself. After doing this three or four times over the past decade, you definitely notice a pattern developing.

Here we go again. A recent article in the Wall Street Journal, published on April 7, 2008, called At Home Depot, More Workers Shifted to Floor highlights this process nicely. According to this article, the Home Depot is restructuring its human resources department in an effort to cut costs. They are laying off about 2,200 employees, all in their HR department. They are centralizing this function.

Bad news for the HR department at Home Depot, and I predict this is just the beginning. I believe other companies will perform similar cost cutting maneuvers, and reduce the size of their HR departments as well. It will happen, trust me.

I bring this up because although it is very bad news for the HR professionals involved, it is an opportunity for HR vendors. As HR departments are streamlined, their need for outside support (outsourcing) becomes that much greater.

And that’s not all – the folks remaining in the HR department will be that much more stressed and under pressure to perform with less resources. As HR suppliers wondering how you’ll weather the storm, think about how you can provide that extra support to your clients. Hopefully this is a silver lining of the economic thunderheads we see on the horizon.

Posted by Dawn Passaro

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