HR Decisions To Prep for a Recession

Are we headed for a recession? Are we in a recession? This has been a question many have been asking since the start of the pandemic. 

According to an article by SIA, we are in a recession, but not the type you were thinking of. We’re seeing a reduction in middle management. Companies are reducing middle management with no plan to replace those roles. “White-collar, middle management jobs lost after Covid aren’t coming back and it appears to be a ‘recession’ for these workers,” SIA writes, quoting Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business. They also note that Dhawan says that “US jobs growth will go negative in the first half of next year, while US gross domestic product will moderate sharply in the first half of 2024.”

While we see a slowdown in these positions, we see companies holding on or struggling with keeping their front-line talent. Earlier this year, we saw Google cut jobs globally, hitting middle management. 6% of their workforce was terminated. Fortune reported several middle management reductions in February of this year, stating, “FedEx Corp. is reducing global officer and director jobs by more than 10% to make the company ‘more efficient, agile,’ according to CEO Raj Subramaniam in a memo to employees. The moves come as middle managers everywhere are under increasing pressure from both above — receiving messages from their bosses to do more with less — and below — enforcing return-to-office policies and navigating new hybrid work arrangements.”

While all of this is concerning, many state a rebound in 2025. While that seems so far away, we, as HR Professionals, can be strategic to work through this to “recession-proof” or be thoughtful about hiring and headcount during this time of transformation in the workplace. Let’s face it: we’ve seen workplace transformations in overload over the last few years, so this is the latest trend in changes that HR Professionals have to face.


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Some would argue that we’re in a recession now with this information — or that one is looming on the horizon. But, as HR professionals, we can think about our headcount strategically to protect our organization from these challenges and layoffs. Here are a few things to consider as you think about your organization.


Can you utilize talent differently? 

Maybe there’s a need to reduce middle management headcount, but can you utilize the talent differently? These roles are essential in many roles, especially in production, manufacturing, or warehousing. However, if there’s a need to reduce these roles, could you add value to the organization by utilizing their talent in training, project management, coaching, mentoring, or other roles across your organization? Giving employees options when faced with RIFs (reduction in force) can help retain the rest of the team.


What do you lose or gain with the reduction in these roles? 

There’s a cost/benefit analysis for transitioning or hiring all roles. What do you gain or maintain by keeping this role? What could you lose? Losing talent could drastically impact the organization, the well-being of employees, the trajectory of the organization, and more. Is that a cost that’s worth the benefit of saving their salaries?  


Could you hire differently? 

Hiring and creating a new position can be exciting, especially in an organization experiencing or projecting tremendous growth. However, with these projections on the horizon, it’s time to start thinking about how you hire. Looking at fractional or contract positions could help you be agile in turmoil. Hiring contractors or fractional workers allows you to ebb and flow, allowing you to test your hypotheses and give you time to ride out a potential recession.


With all of this being said, you have to make the best decisions that work for your business now and in the future. When thinking about talent, looking at the current talent and demands of the company will bring balance to your decision. We’re never quite sure what the economy will look like, but being smart about your hiring and retention decisions will help you ride the wave, whatever wave that is.