HR toolbox for uncertain times: analyze, adjust and bounce back

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Economic crises or periods of uncertainty and instability put companies to the test, especially SMEs, which have less financial leeway than large groups. Faced with a drop in activity or sales, human resources management becomes a key lever for adjusting costs, optimizing organization and preparing for recovery.

SME managers and HR directors can thus draw on flexible and effective HR levers to adjust their payroll, streamline their work organization and optimize their compensation policy.

Here’s a detailed toolbox of measures that can be activated during periods of reduced activity, with figures and illustrations to help you understand their impact.

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Adjusting headcount and payroll

Payroll costs often account for 30-50% of an SME’s expenses. In an uncertain economic climate, adapting the workforce is the first lever to activate. However, this must be done while maintaining employee commitment.

Immediate and temporary measures

Before considering more radical decisions, there are a number of actions we can take to adapt our workforce to the drop in activity:

  • Non-renewal of short-term contracts (temporary work, fixed-term contracts)
    • Impact: immediate reduction in payroll costs with no legal impact.
    • Example: a company with 5 temporary workers at €2,500/month saves €12,500 a month by not renewing these contracts.
  • Taxation of paid vacations and RTT
    • Impact: reduction in the cost of under-activity without redundancies.
    • Example: if a company has a payroll of €300,000 per month for 30 employees, and they take 10 days off (about 1/3 of the month), the company saves the equivalent of 10% of the payroll over one month.
  • Short-time working
    • Impact: the State covers a portion of salaries (on average 72% of net and 100% for employees earning the minimum wage).
  • Provision of personnel
    • Impact: temporary loan of employees to another company, avoiding redundancies. Loans are made at “cost price” for a defined period.
    • For example, a small business with a low level of activity can lend 5 employees to a company in need, thus saving on wage costs for the period.

 

Structural adjustments

If the period of uncertainty is prolonged, temporary measures may no longer suffice. It then becomes necessary to adopt structural solutions, which enable a deeper and more lasting adaptation to the company’s new economic realities.

  • Negotiated part-time work
    • Impact: reduction in payroll while maintaining employment for a fixed period, with compensation for employees.
    • Example: if 10 employees go from 39 hours to 30 hours, i.e. a 23% reduction in working hours, a company with an average payroll of €35,000 for these 10 employees saves around €8,000.
  • Wage cuts with employee consent
    • Impact: helps avoid layoffs in uncertain times.
    • Example: a 5% pay cut for an SME with a payroll of €500,000/month represents savings of €25,000/month.
  • Negotiated departures
    • Impact: reduction of fixed costs through individual agreements, with calm and controlled dialogue. Less confrontational than redundancy, it helps to maintain a good social climate and manage the workforce flexibly.
    • if a company reduces its workforce from 30 to 20 through negotiated departures, it reduces its monthly expenses from €90,000 to €60,000, subject to a negotiated package of departures. The return on investment can be achieved in just a few months.

 

Optimizing work organization

Adapting work organization means maintaining competitiveness with fewer resources. Efficient reorganization helps to adapt activity to demand, while limiting unnecessary costs.

Work organization in a logistics company

 

Flexible working hours

  • Annualization of working hours
    • Impact: adjust schedules to off-peak and peak periods.
    • Example: a business cycle with 39h/week in high season and 31h/week in low season saves around 7% on payroll costs.
  • Package days
    • Impact: eliminate the hourly reference for managers and optimize productivity.
    • For example, an executive paid on the basis of 235 days worked per year instead of 218 will be able to optimize his workload without any increase in salary.
  • Time Savings Account (TSA)
    • Impact: allows you to store overtime without paying for it immediately. However, you need to manage your cash flow carefully in the event of employee departures.
    • Example: an employee accumulating 20 hours of overtime per month (at an hourly rate of €20 per hour) in a CET immediately saves 20% in overtime costs.

Rethinking compensation policy

The right remuneration system can involve employees while reducing fixed costs. It’s a question of inverting the paradigm to transform a budgetary constraint into a lever for motivation and performance.

Introduction of variable compensation

  • Target-based bonuses rather than fixed salary increases
    • Impact: transforms a fixed charge into a variable charge.
    • Example: an SME that replaces a €150/month increase with an annual performance-related bonus of €1,800 saves money if the target is not met.
  • Elimination of obsolete bonuses
    • Impact: reallocate resources where they are most needed.
    • Example: a company that eliminates a bonus of 5% of monthly salary for 30 employees saves €7,500/month.

Social and tax exemptions

  • Profit-sharing
    • Impact: incentive compensation with impact, exempt from employer contributions under certain conditions. The company can choose to implement positive-impact criteria for profit-sharing, such as waste reduction.
    • Example: a profit-sharing scheme costing €1,000 per employee costs 20% less than an equivalent salary bonus.
  • Company savings plans (PEE) and PERECO
    • Impact: allows employees to save with tax benefits.
    • For example, a contribution of €1,000 to a PEE costs the company less than €800, compared with €1,300 for a traditional bonus.

The right HR policy to bounce back

HR management is not just about reducing costs. Preparing for the upturn is just as crucial as managing the downturn. A strategic HR plan can turn a difficult period into an opportunity to develop and strengthen internal skills.

  • Investing in training
    • Impact: enhances employees’ employability and motivation.
    • For example, using periods of under-activity to train 20 employees with OPCO funding enables skills upgrading at reduced cost.
  • Social audit and HR diagnosis
    • Impact: identify strengths and weaknesses to anticipate recovery.
  • Enhanced social dialogue
    • Impact: better communication avoids conflicts and facilitates necessary adjustments.

Why use a timeshare HR in uncertain times?

Implementing these measures requires expertise in labor law, HR management and corporate strategy. For an SME, a HR timeshare is an agile, cost-effective solution, enabling the right levers to be quickly activated without weighing down the structure. It’s a time-limited investment that should yield a profit.

During a difficult period, flexible and responsive HR management is the key to transforming a difficult period into an opportunity for strengthening and development.

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Philippe Caquet, President Boost'RH groupe

Philippe Caquet

According to our expert, a crisis is a tremendous opportunity for transformation and creation. On the contrary, the worst mistake would be not to act. You have to dare, decide, communicate and get your teams on board to show them that you are taking the necessary measures to safeguard your business.

Our expert takes the example of a microelectronics company he worked with during a slump in activity. The first priority was to adapt the workforce without affecting permanent staff. First, he put an end to temporary contracts and froze hiring. Then, for permanent employees, he activated several levers: short-time working, training during slack periods, and even staff loans to other local companies. It’s a win-win solution: the company limits its payroll, the employees keep their jobs and their salaries, and as a bonus, they return enriched by a new experience.

Among the most effective tools, he also cites the Time Savings Account (Compte Épargne Temps – CET), which enables overtime hours to be stored during peaks in activity and drawn on during slack periods. This avoids sudden shocks and even helps manage cash flow. You do, however, need to anticipate provisions in the event of departure.

In difficult times, the role of HR is not limited to managing the existing situation. It has to prepare for recovery. Teams must not become disengaged. When the upturn comes, you need to be able to get things moving again quickly, without being caught short. This presupposes having trained the right people, maintained a certain rhythm (for example, by reorganizing teams into 2x8s instead of 3x8s), and restored perspective.

In this context, time-sharing HR is a flexible, cost-effective solution. The company manager doesn’t always have the right reflexes or the necessary distance to respond to the situation. Time-share HR comes with a toolbox, invaluable neutrality in sensitive decisions, and the ability to propose solutions that can be implemented immediately. And if the company already has an HR person, he or she can bring a fresh pair of eyes to the table and challenge management.

To sum up

En 3 Questions

  • What HR strategies are possible in times of crisis?

    HR strategies in times of crisis include adjusting the workforce (short-time working, reduced working hours), optimizing organization (annualization of working hours, CET) and implementing a flexible compensation policy (target-based bonuses, employee savings schemes). The aim is to reduce costs while maintaining employee commitment.

  • How can you reduce your payroll without laying off staff during a downturn?

    To avoid redundancies, companies can resort to measures such as switching to part-time working, modulating working hours, eliminating obsolete bonuses or introducing state-funded short-time working. Negotiation with employees and staff representatives is essential to ensure acceptance of these measures.

  • Why use a timeshare HR in uncertain times?

    A HR timeshare provides SMEs with access to crisis management expertise without the cost of a full-time employee. It helps to implement appropriate solutions, secure the legal aspects and manage the HR adjustments needed to get through the slump and prepare for recovery.