Into the Storm: How Human Resources Will Cope—An Academic Perspective

Katherine Mehr

Human resources is no longer regarded as a cost center or back-end activity compiled of passive administrative and operational duties such as compensation, benefits and compliance. Instead, human resources is now considered an important strategic partner in developing goals aligned to a company’s overall business objective. The human resources department is a leader that links the company’s operating strategies to meet organizational objectives.

Despite this, however, human resources is still usually the first department that suffers cuts during an economic downturn. e-BIM editor Katherine Mehr speaks with Karen Davis, Vice President of Human Resources of Brown University, on the effects of today’s uncertain economy and how the human resources department at Brown University plans to stay relevant and successful.

How has the current state of the economy affected your human resources organization?

It probably isn’t [affected] in a dramatic way, but what has happened these last couple of weeks at Brown University is [the economy] is affecting how we think about where we are going to get the resources to implement the plans that were already on the table. I am not yet personally ready to give up on those plans, and I don’t think Brown as an institution is ready to modify its strategic plan either.

We count on donors in large part to gather the resources to support a lot of our activity. We have tuition and other sources of income and we can count a lot on the endowment that we collect over time from donors. If you couple how affected donors are with the increased costs of fuel, construction and a lot of people being out of work, our bottom line is going to be impacted.

What are some of the challenges you are facing because of the economic downturn?

What’s happening in the economy has caused compliance issues. If you think about Sarbanes Oxley, which grew out of Enron and some of those other earlier corporate issues, it has led to similar new compliance requirements in the not-for-profit world. I certainly do predict that what’s going on now will also lead yet another new round of accountability and compliance requirements. A big thing for us is going to be how we monitor, manage and implement retirement plans with the whole Pension Protection Act. We have a new set of regulatory requirements that has begun to role out and will be implemented January 1, 2009. A lot of that is aimed at safeguarding employees’ retirement money, and that has grown out of some of the scandals and concerns of the last decade.

In light of gas prices, we are getting more requests from staff to be creative and imaginative in ways that they can work from home more often. There is a big demand to create ways to subsidize transportation costs in general, whether it’s public transportation or parking.

We have to be a little smarter about how we think about growing our total compensation for employees over time. We have made smart moves in the benefits arena to get more value for our dollar, but we would like to do a lot more in the work-life space. We have to go back to the drawing board and say, "What do we have to do now, what can wait and what can we push off?"

How is Brown University as an organization planning to overcome the obstacles the economy has caused?

Some of the plans are going to have to be stretched out more over time, and secondly, resources are going to be even more constrained and predicted. I see it in some ways as an opportunity to make some change that I might have otherwise had a hard time with. Higher education is very consensus driven. Every employee feels like he or she has a vote, and often, this is the case. Our leadership generally is not the kind of leadership that will just issue a memo and say, "Just do this and do that." We try to bring the community along.

What are you doing to run the human resources department better?

I think there is a big appetite for doing a lot of new things: investing in new systems, recruiting new people, upgrading the skills of our workforce. But if we don’t have as much money as we thought we were going to have, we are going to have to be more efficient in how we think about using those resources. Change that takes time is an expensive change. Change that is done more quickly often costs less. I see an opportunity to move some of my issues along in a matter of months opposed to years because of the constraint.

Does anything keep you up at night in regards to what’s happening in the economy and how it affects your business?

To be honest, I think what I worry about the most is the psychological toll that this kind of economy has on all of us as employees. I am actually less concerned about the long- time viability of Brown University or the higher education industry. We are here for the duration. We have been here a long time. We are strong and we have a lot of good ideas and plans for the future. We may slow at times and speed up at others depending on what’s going on.

I am much more concerned about our workforce, especially our low-wage workers and those people in the workforce who hoped to make a mid-career work change because they realized at some point that they are in the wrong place and have outgrown it. This is a scary time to start to look for a new job or a career change. There are some things that Brown University can help with and there are some things that I don’t necessarily have all the resources to support our workforce during these times. We are doing our best. I am thinking about the importance of Employee Assistance Programs (EAP) at this time and urging our employees to keep their skills up—whether their next job is going to be with us or someone else. I think we owe them training, coaching and resources.

First published on Human Resources IQ.