Softening the impacts of a recession through efficiency

The key to weathering a poor economic outlook is a renewed focus on efficiency, writes Arj Bagga.

Arj Bagga

During periods of economic downturn, public sector employment is often seen as a safe bet. While private enterprise is at the mercy of consumer spending, it is widely believed that industries that are funded by local, state and federal government – such as healthcare, education and aged care services – are more resilient during recession.

Indeed, on the surface, initial signs for the public sector labour market, at least at the federal level, are promising. In the Labor government’s October budget, another 7,500 jobs were promised for the sector, with a vow to limit the reliance on external contractors and consultancies. However, according to ABS data, this equates to only a 3 per cent increase in positions for the Commonwealth, which currently employs 254,000 people, with labour market changes at the state and local level still unknown.

There is one thing that we know for sure: regardless of sector, during recessionary periods, management will be looking to double down on efficiency through more effective HR practices. If Australia is poised for a recession – and all signs point to this eventuality – HR leaders and public sector employees alike need to prepare themselves.

There are three key strategies that will help to ensure HR management, systems – and staff more generally – are as productive as possible:

Be proactive with performance reviews

With an increased focus on ‘doing more with less’, there is a greater pressure on each job function, process and person to be fruitful. By proactively, and regularly, reviewing internal structures, workflows and accountabilities, HR leaders can quickly identify underperformance – and address it.

This advice should be heeded by employees, too. As roles and targets shifted through the Covid, many have been left with questions, or feelings of uncertainty around expected performance. In addition to this is the prevalence of post-pandemic burnout, which can result in a loss of perspective and ability to priortise.

To counteract this, those working in the public sector should be on the front foot, beginning open, honest conversations with management to ensure both parties are clear on the responsibilities, expectations and goals of their role.

Focus on what you need

Recessions can see departments tightening the purse strings when it comes to hiring, which can make finding staff difficult, particularly when combined with higher salary expectations, driven by a competitive labour market and increased cost of living.

Amidst these conditions, HR practice needs to shift focus on acquiring the talent necessary to lead progress and growth. To do this, leaders should assess the current capabilities of each team and identify the gaps, keeping in mind the critical skills that will best serve the department. This approach also widens the talent pool; by focusing on knowledge and ability, rather than just experience, HR leaders improve their recruitment prospects.

Whether we are headed for a recession or not, utilising these three actions will result in improved efficiency and better functioning teams; which can only be a benefit to the public sector.

*Arj Bagga is an Executive Advisor in Gartner’s HR Advisory team.

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