Corporate crisis situations are not uncommon in today’s highly-digitized, interconnected, and unpredictable business environment. Tense situations, such as an FBI raid, whistleblower claims, cyber attacks, and insider fraud among others can adversely affect a small business’s finances, reputation, and viability. Therefore, it’s important to have a sound crisis containment program in place in order to minimize the ensuing damage.
The role of the human resource function at the corporate crisis management table cannot be understated. During crisis management, every firm needs a dedicated internal stakeholder who can effectively coordinate with the employees and departments involved and create processes and procedures to prevent such situations in the future. That’s where HR comes in!
Read on to understand the role the human resources team plays in organizational crisis management.
1. Effective Crisis Communication
Effective, transparent, and consistent internal communication is critical in times of a corporate crisis. Being the hub of communications in an organization, the HR team plays a central role in planning and executing crisis communication strategies for internal and external stakeholders while preserving employee morale.
The human resource team is responsible for live communication with the heads of the departments, management, employees, media, and other business stakeholders. They ensure timely cascading of accurate information in times of crisis. They also offer guidance and reassurance to all the employees through written communication, making them feel secure and valued and strengthening their bond with the management.
Finally, the HR team focuses on delivering information and training to the internal stakeholders through the company intranet, HR help center, helpdesk for employees, email updates, company bulletin board, and password-protected site. Effective training educates employees about the crisis and informs them about their role in the process.
2. Upholding the Company Culture in Crisis Situation
A firm’s culture is what guides the organization in good and bad situations. Strong company culture determines how the business responds to crisis. For instance, your firm promotes a culture of open and transparent communication, it will do so in crisis too. On the other hand, a firm with a ‘no comment’ culture will struggle in a crisis situation.
Crisis or no crisis, the human resource team plays an important role in upholding the organizational culture. It proactively plans a crisis communication strategy and ensures that the decisions are communicated to the employees. Further, it trains employees and designs policies and mechanisms to mitigate business risks. The team is actively involved in the inside-out change management process and protects employees from the after-effects of the crisis.
3. Proactive Scenario and Response Planning
According to a research paper by PwC, 69 percent of businesses experience cases of corporate crisis. Yet, nearly 30 percent of them do not have a dedicated staff for crisis management. The ones who claim to have crisis response plans aren’t running the appropriate simulations to test them. Thus, most firms are dangerously unprepared to manage a corporate crisis.
HR professionals can help define goals and roles to crisis preparedness. Since they collaborate with all the other stakeholders, the HR team is in a position to take a holistic approach to crisis preparedness. Further, they can proactively work on safeguarding the interest of the employees and securing the vital assets by tackling areas of potential weakness during crisis planning.
Finally, they collaborate with the key organizational functions to develop the below-mentioned plans for continuing business operations.
- Emergency Response Plan for evacuation, sheltering, and lockdown
- Business Continuity Plan for coming up with strategies to manage the disruption of business post-crisis
- IT Plan for the recovery of computer hardware, connectivity, and sensitive data
- Proactive Onboarding Plan when hiring people
4. Crisis Recovery Planning
The human resource team is actively involved in solving people’s issues after a crisis. For instance, employees may be demoralized and confused after a crisis and may need help getting back to normalcy. They may also face compensation issues that need to be addressed in time.
The human resources team helps the firm overcome the harsh effects of a corporate crisis, allowing the business to get back on its feet within no time.
Dealing with a corporate crisis requires an organization to properly assess the situation and respond to it in the most appropriate manner. Because of its ability to drive profound corporate transformation, the HR function is at the center of all strategic decisions and actions in an organization, including crisis management.
We are sure the information shared in this post will help you appreciate the central role of HR in organizational crisis management.