In economics, the term In economics, the term recessionrecession describes the reduction of a describes the reduction of a

country's country's gross domestic productgross domestic product (GDP) for at least two (GDP) for at least two quartersquarters..

The usual dictionary definition is "a The usual dictionary definition is "a period of reduced economic activity" period of reduced economic activity"

The The United StatesUnited States-based -based National Bureau of Economic ResearchNational Bureau of Economic Research (NBER) defines (NBER) defines economic recessioneconomic recession as: as: "a significant decline in economic "a significant decline in economic activity spread across the country, activity spread across the country, lasting more than a few months, lasting more than a few months, normally visible in normally visible in realreal GDPGDP growth, real growth, real personal income, employment, personal income, employment, industrial production, and wholesale-industrial production, and wholesale-retail sales.retail sales.

That private organization defines a That private organization defines a recession more ambiguously as "a recession more ambiguously as "a significant decline in economic activity significant decline in economic activity spread across the economy, lasting more spread across the economy, lasting more than a few months.“than a few months.“

In In macroeconomicsmacroeconomics, a recession is a , a recession is a decline in a country's gross domestic decline in a country's gross domestic product (GDP), or negative real economic product (GDP), or negative real economic growth, for two or more successive growth, for two or more successive quarters of a yearquarters of a year

History of recessionsHistory of recessions

· · July 1980 - November 1982July 1980 - November 1982: : 2 2 years total years total · · July 1990-March 1991July 1990-March 1991: : 8 8 months months · · March 2001-November 2001March 2001-November 2001:: 8 8 months months · · December 2007-currentDecember 2007-current: :

15 months as of March 200915 months as of March 2009

Causes of recessionsCauses of recessions

Currency crisesCurrency crises

Energy crisisEnergy crisis

Under-consumptionUnder-consumption

OverproductionOverproduction

Financial crisisFinancial crisis

Causes of recessionsCauses of recessionsCurrency crisesCurrency crises

A A currency crisiscurrency crisis, which is also called a , which is also called a balance-balance-of-payments crisisof-payments crisis, occurs when the value of a , occurs when the value of a currencycurrency changes quickly, undermining its ability to changes quickly, undermining its ability to serve as a serve as a medium of exchangemedium of exchange or a or a store of valuestore of value. It is a type of . It is a type of financial crisisfinancial crisis and is often and is often associated with a associated with a real economic crisisreal economic crisis

Energy crisisEnergy crisis An An energy crisisenergy crisis is any great is any great bottleneckbottleneck (or price (or price

riserise) in the supply of ) in the supply of energyenergy resources to an resources to an economy. It usually refers to the shortage of oil economy. It usually refers to the shortage of oil and additionally to electricity or other natural and additionally to electricity or other natural resources. An energy crisis may be referred to as resources. An energy crisis may be referred to as an an oil crisisoil crisis, , petroleum crisispetroleum crisis, , energy shortageenergy shortage, , electricity shortageelectricity shortage or or electricity crisiselectricity crisis

UnderconsumptionUnderconsumption In In underconsumptionunderconsumption , recessions and , recessions and

stagnationstagnation arise due to inadequate consumer arise due to inadequate consumer demand relative to the amount produceddemand relative to the amount producedOverproductionOverproduction

In In economicseconomics, , overproductionoverproduction refers to refers to excess of supply over demand of products excess of supply over demand of products being offered to the being offered to the marketmarket. This leads to . This leads to lower prices and / or unsold goodslower prices and / or unsold goodsFinancial crisisFinancial crisis

The term The term financial crisisfinancial crisis is applied broadly to is applied broadly to a variety of situations in which some financial a variety of situations in which some financial institutions or assets suddenly lose a large institutions or assets suddenly lose a large part of their valuepart of their value

The Impact of Recession on The Impact of Recession on EmploymentEmployment

As, the impact of recession is As, the impact of recession is unpredictable and depends unpredictable and depends entirely on the nature of the entirely on the nature of the recession. The lessons learned on recession. The lessons learned on past recessions have somehow past recessions have somehow helped us trace the patterns and helped us trace the patterns and given us ideas on how to solve the given us ideas on how to solve the problem.problem.

The Center for Economic and Policy The Center for Economic and Policy Research states that the looming Research states that the looming recession will raise unemployment by recession will raise unemployment by about about 2 to 3 percent2 to 3 percent depending on depending on the nature of the recession. This the nature of the recession. This means that there will be about means that there will be about 3 to 5 3 to 5 million unemployed million unemployed Americans in Americans in case it case it happens.happens.

On the other hand unemployment On the other hand unemployment data doesn’t represent the educated data doesn’t represent the educated workforce. For them, the truth is there workforce. For them, the truth is there are more available jobs than there are are more available jobs than there are candidates and the unemployment candidates and the unemployment rise affects mainly the rise affects mainly the low-skilled low-skilled workersworkers..

STRATEGIC ROLE OF HRM STRATEGIC ROLE OF HRM DURING RECESSIONDURING RECESSION

The recession is about the creative The recession is about the creative Human Resources Management. The Human Resources Management. The HRM Function is asked to bring new HRM Function is asked to bring new ideas, to change the HRM Processes and ideas, to change the HRM Processes and to develop or change the procedures. And to develop or change the procedures. And this effort has to be cheap or it has to cut this effort has to be cheap or it has to cut the costs of the organization. The HRM the costs of the organization. The HRM Innovation is easy in times of the business Innovation is easy in times of the business growth, but the recession is not good for growth, but the recession is not good for big innovative HRM Initiatives.big innovative HRM Initiatives.

The point has to be focused by The point has to be focused by HRM during recession are as HRM during recession are as

follows:follows:To optimize the manpower strength. To optimize the manpower strength. To take strategic initiatives to increase the To take strategic initiatives to increase the productivity and efficiency of the entire productivity and efficiency of the entire organization. organization. To work on compensation benefits. To work on compensation benefits. Redesign training and development programs.Redesign training and development programs.Ensure your organization’s policies and Ensure your organization’s policies and handbooks are up to date.handbooks are up to date.To identify the real key employees and to intact To identify the real key employees and to intact them in the organizationthem in the organization

Layoffs. Ensure you are familiar with your legal Layoffs. Ensure you are familiar with your legal responsibilities in a lay off to minimize your responsibilities in a lay off to minimize your organization's risk. Be sure that you have organization's risk. Be sure that you have properly defined the criteria you are using to properly defined the criteria you are using to determine who will be let go.determine who will be let go.

Redirect Your Employees to Other Redirect Your Employees to Other Departments (Job Rotation)Departments (Job Rotation)

Listen to Your EmployeesListen to Your Employees

Keep Them Motivated and Busy Keep Them Motivated and Busy (Communicate-Communicate and (Communicate-Communicate and Communicate)Communicate)

Show them the long term visionShow them the long term vision

Thank You

BY

YASSER ARAFATH &

NAVEEN KUMAR K