SUMMARY
The ongoing Covid-19 pandemic has had a deep economic impact on every organization
Each sector will have its own recovery journey and HR function will have a key role to play there
The role of an HR remains extremely crucial and guided by the rules of VUCA 2.0
The ongoing Covid-19 pandemic has had a deep economic impact on every organisation. And as every sector and every industry prepared itself to deal with this situation, the role of HR underwent a paradigm shift! HR function and leaders are no longer just about who is good with people interactions and manages the processes; HR now is a function that understands how to win with talent, which has become of utmost importance in today’s scenario.
With the industries and sectors going through their own curves of economic recovery, the HR function has to focus on ensuring that the people are engaged, reskilled and upskilled to cope with this change is the necessity of the hour.
Each sector will have its own recovery journey and HR function will have a key role to play there. While some sectors may have a V-Shaped recovery, others may look at a U-shaped or even a Z-Shaped recovery. To give you a little more detail on the different economic recovery curves, a V-shaped recovery means that once the lockdown ends, the customers will return immediately and employees need to be ready and able to provide products and services.
For example, the ecommerce industry. A large number of ecommerce companies are in the process of capacity building and reskilling their employees to meet the expected surge in demand. For these sectors, HR function was step in step with business, they were constantly hiring and adding numbers to their employee strength so as to meet the demand.
Amazon, for instance, has hired 175,000 employees during the pandemic, which translates to $4 Bn investment in Covid-19 related spending on employee benefits and safety measures included $500 Mn bonus for the front line workers and delivery personnel. Imagine the type of upskilling and onboarding process which the HR function would have to continuously clock throughout the pandemic!
Some economies and industries have a U-shaped recovery. This means that these businesses were never out of the market. Though they had few customers, the demand was still there. But, post lockdown uplift, the demand for these industries has gained again. For example, food and beverages sector. While during the lockdown, they could only do home delivery, the demand for which was also low due to fear of pandemic.
However, post lockdown, they are back in business with takeaways, DIY kits etc! These employees who had to be furloughed, have come back with the new skills on making contact-less deliveries yet ensuring customer delight. And the HR leaders of these industries had to ensure that their employees’ mental wellbeing was given utmost importance and a safe and secure environment was created.
Further, for some more industries the recovery expected is to be L- shaped. Simply put, their business have dropped off and it is unclear if it will ever recover. For example, Entertainment, Tourism and Hospitality. The employees of this sector have seen the worst side of the pandemic. There has been no business and the profits have simply plummeted.
The employees have been laid off and there is a clear uncertainty as to whether the business will ever be the same again. Due to travel restrictions, there are simply no people planning their holidays. Further, the restriction on maximum number of 50 in a gathering, has ruined the event planning and entertainment industry. In such a scenario, the role of HR has to take the empathetic view and handle the employees with a lot of sensitivity.
Then there are industries that have a W-shaped recovery. W-shaped recovery is quite a roller coaster ride with ups and downs until the uncertainty ends. For instance, the Real Estate sector. While buyers view this economic downfall a great time to invest in the sector, sellers see it as a huge loss on the profit ratio. So, there are days when the demand is a lot and the sector sees a surge but then there are days when the demand is low and the curve comes down.
In such a scenario, ensuring that the employees stay motivated and strong, emotionally resilient to deal with the bumpy ride is a challenge that every HR professional in this industry has to be equipped to handle.
There is also a Swoosh Curve, similar to the ‘Nike’ symbol. This recovery model is characterised by a steep drop and a gradual recovery. These sectors will take longer to return to the pre-crisis growth than it took to fall. A classic example for this is the Aviation sector. Though, during the lockdown, due to restrictions, the demand completely fell flat.
With the lockdown partially relaxed, the demand has gone up again and the sector, though not posting high profits, is gradually coming back to its feet. The employees in this sector, in order to sustain, have been majorly reskilled into different roles and departments, will need to build psychological safety and emotional resilience.
And lastly, there is a Z-shaped recovery model. This type of recovery model is specific to industries which suffer from a downturn during the pandemic but then bounces back up above the level it would have been in the pre-pandemic baseline, before going down again to normalcy. The Automobile sector is characterised by this recovery model.
With no sales during the lockdown period, the sector saw a big decline curve, which quickly went up as soon as the government relaxed the lockdown restrictions. Due to unavailability of public mode of transport, people were left with the option of purchasing a new or pre-owned vehicle. However, once the saturation is reached, the demand will hit a normal level on its own.
According to second-hand car dealer Cars24, the first time buyers are opting for pre-owned cars and the demand in the month of June 2020 was at 134% as against 46% in the month of May. So while the HR might have had to hire new employees to meet the growing demand, they will have to ensure that once the demand normalises, these new employees are also provided with an alternative role within the organization.
Hence, whatever recovery model and route we might undergo, the role of an HR remains extremely crucial and guided by the rules of VUCA 2.0. Irrespective of the sector we are in, staying relevant to business and employee needs through tweaked HR policies and practices, judicious investment in capabilities, emotional resilience and psychological safety, restructuring and building an agile structure with empathy are some underlying themes.
