John Bax, Tryact HRD: In the next six months, the HR market will increasingly suffer

Wall-Street: Considering the financial crisis, what do you believe the evolution within the human resources market will be over the next six months?

This financial crisis, pretty unique in its kind this time, triggers the coming of an economic recession. Even the rumors of this recession will inevitably make companies postpone investments, and investments in human resources will not be excluded. I believe that in the next six months the human resources market will increasingly suffer from this development.

Wall-Street: In your opinion, will the job cuts increase or we have already reached the tipping point here?

Personally I think that the job cuts will increase as long as no signs of economic recovery occur. And I don’t expect big signs of recovery in the next half year, especially because of the fundamental changes needed to treat this financial crisis, which is, to state it again, pretty unique in its kind.

Wall-Street: Some managers said they were planning to cut training budgets, extra benefits, or utility costs. Do you believe managers should keep their budgets for training?

Basically, I don’t believe in cutting cost just for the sake of cutting cost. And when this cutting of the cost is triggered by RUMORS of an approaching economic crisis, I even consider it pretty naive. I believe in well-thought investments in good times as well as in bad times. In good times you should build reserves for the bad times, and in this way avoiding having to cut cost in vital investments when times get rough, which will lead to even higher cost or losses on a midterm range. If you have no money, you cannot spend any. But if you do have money, you should never stop investing in the development of human resources, especially of those which represent key-positions in an organization. You will always pay a high price for that choice.

Wall-Street: If you were a general manager right now, how would you reorganize your budget in order to keep production at a constant pace and to see layoffs as the final resort?

I would put more focus on key success factors within the company and even invest more money into them than before, and cutting other budgets. I might even invest in internal projects focusing on increasing the utilization rate or quality standard, which did not get the attention they deserved, because of having been too busy during the time before the crisis.

Wall-Street: When job cuts are already a certainty, what would you advice managers to do in order to keep the employees’ positive way of thinking?

Personally I am in favor of managers being open about the reality and giving space to the remaining employees to express their opinions and feelings about that reality. I believe in managing reality instead of creating illusions. And to me, coaching employees to focus on what they can influence instead of what they cannot influence, helps to maintain or restore the positive way of thinking.

Wall-Street: Do you believe that some of the smaller human resources companies may run through a period of lack of contracts because hardly anyone is hiring in crisis times? Do you believe some HR employee may be laid off?

Sure, there will be a shake out. As I said before, investments will be postponed or even cut, also investments in human resources. And as the Romanian market in human resources is still a relatively young market, there are not too many HR-companies which have strong roots (turnover, profit, financial reserves, network, etc.). This means there are a lot of HR-companies on the Romanian market which are still very vulnerable.

Wall-Street: What are your expectations for the HR market for the coming 2 years - after the crisis will have ended?

I think that the HR-market will have an incredible boom. On the one hand, because it was already a rising market before the crisis. On the other hand a lot of companies will discover and/or feel like there is a lot of catching up to do after the cutting cost period.

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