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A recession is (probably) on the way – our top tips for employers

Preparing for recession – tips for employers

I’ve been through several recessions in my 35 year HR career, and whilst it’s not certain that the UK is heading for a recession, it certainly feels that way. In this article I’m going to cover my top tips for employers preparing for recession.

With sky high inflation, labour shortage and no end in sight to global supply chain issues, it seems that the current slide in economic growth is likely to end up in a recessionary descent.

What happens to the labour market in a recession?  People and businesses stop spending money, jobs are shed, unemployment increases, wages are suppressed and support services are cut – along with investment in training and other ‘non-essential’ spending.

Our top 10 tips to help employers prepare for a recession

What should employers be doing to prepare for the (almost inevitable) recession on its way? Here are my top ten tips for employers.

  1. Brush up on your redundancy skills – if job reductions are necessary the priority should be to ‘cut the fat, not the muscle.’ Employers should be thinking now about how (and who) they will choose to lose as salary budgets come under pressure. Also, don’t forget the dignity aspect – redundancies are sometimes necessary, but that doesn’t mean they have to be cruelly executed. A quality HR outsourcing partner, like myHRdept, can guide you through this process & advise you on the options.
  2. Update your org charts – Tied up with ‘1’, up to date org charts supplemented by key employee information (commencement of employment, age, salary, date of birth) will aid restructuring conversations and save a lot of time when the pressure’s on.
  3. Highlight your most recent joiners and those with less than 2 years service. This will be the least risk route to headcount reductions, but would that lose any key recent joiners and, if so, what can de done to avoid or mitigate that?
  4. Highlight any temporary or agency workers, alongside new starters these are (normally) the first to go in a recession.
  5. Prioritise training and development commitments –Be clear on where your priorities lay and re-evaluate what each will add to the bottom line. What would your organisation lose out on if they don’t happen, or happen later when better economic conditions return (which they will). Are there any contractual penalties from pausing or aborting projects, and if so what are they?
  6. Work with senior managers to prepare contingency business plans for a business downturn. If the worst happens, what aspects of spending/cost can you rein in without causing too much damage to recovery prospects when the recession ends and growth returns?
  7. Think about outsourcing support functions – certain aspects are more easily outsourced than others in a recession e.g. payroll, ER & aspects of HR admin – is now a good time to talk to HR outsourcers like myHRdept?
  8. Look at IT projects – you might like an all bells and whistles fully bespoked system, or a coveted ISO accreditation, but can these wait, or perhaps just focus on the basics for now?
  9. Prepare your communications, reassuring those remaining about the innate strength of the organisation and future plans for re-growth. Lastly….
  10. …remember that following every recession is a recovery. Revisiting point 1, ‘cut the fat, not the muscle’…..if you cut too deeply, you will not be able to benefit from early recovery opportunities.

How can HR support from myHRdept help prepare for a recession?

myHRdept routinely support employers with redundancy campaigns – collective and voluntary. We also provide settlement agreements for riskier exits and voluntary exit agreements for lower risk scenarios. All of our retained HR support packages contain a bank of support hours which can be used for these purposes, plus of course to risk assess particular plans of action.

If you’re thinking of outsourcing your HR or employment law needs, why not contact myHRdept? Call us on 01628 820515, email us at to discuss your requirements, or contact us via our website and we’ll call you back.

About the author

(Bill Larke was formerly HRD for Coca-Cola’s UK operations and has worked with the Boards of some of the UK’s best known employers. His experience of managing redundancies is ‘regrettably large.’ He is now a key HR Director for HR outsourcer myHRdept, celebrating its 20th year of HR outsourcing.)

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