This past week, there’s been more coverage in the traditional and new media focusing on the impact of the credit crunch, and its consequences for people management.

The Sunday Times has drawn attention to the British Chambers of Commerce forecasts of growth slowing to 1.7% this year from 3.1% in 2007 and to a survey from the British Retail Consortium showing sales are down 5% on the previous year. It also notes that the Institute of Directors quarterly business opinion survey to be published later this week will warn of ‘a further drop in confidence and a plunge in investment expectations’. The article then goes on to indicate the likely results of these changes through the CIPD’s warning that two in every five employers plan redundancies over the next three months.

A number of blogs have echoed HR Circles recent post, City talent crunch warning, arguing that these economic conditions make people management even more important. One of the most powerful of these arguments has been made by US research firm, Bersin & Associates, which calls for organisations to maintain and invest in their talent during the downturn.

"We have studied hundreds of companies and constantly look at the maturity of their talent management strategies. Again and again I comment to people that the most well-developed talent management strategies happen to reside in companies that endured terrible economic or business cycles. These organizations have been forced to search their souls, and what they found (if they survived), was that 'talent is all we have'."

The tougher economic conditions can be an enabler to more effective business and people management, but means that organisations need to be even more focused on segmenting their workforce, engaging and developing their talent, and being very careful about who they lay off when they need to do this.

For more information:

HCM blog