The world economy is showing some positive signs, but leaders warn HR to keep planning for tough times.In the US, for example, they are calling them ‘green shoots’: those tiny specks of good news that are leading many to believe the worst of the economic downturn is now behind the world. Share markets around the world rallied toward the end of last month, enjoying their first sustained upswing since the plummets of last October. Even some housing markets in North America appear to have stabilised.
There’s good news specific to Asia as well. In India, for example, cement and steel prices are up, reflecting stable domestic demand. Car sales are also on the rise. Closer to home, there’s evidence retrenched workers in Singapore are having some success in their search for new jobs (see page 6).
But world leaders have warned against misplaced optimism. They say there are still some significant underlying problems with the world economy that need to be addressed.
As The Economist opined last month: “The worst thing for the world economy would be to assume the worst is over”.
Singapore’s Prime Minister agrees strongly with that sentiment. Speaking to the annual May Day rally on May 1, Lee Hsien Loong told workers, union leaders and employers the tough times were likely to be around for some time yet. “Our latest growth forecast for the whole year 2009, is between minus 6% and minus 9%,” he said. “We have never had to make such a bad forecast.
“It is better for us to plan on the basis of a prolonged downturn, prepare for a long slough ahead. And if in fact the ‘green shoots’ burst forth, treat that as a bonus. It is not time to relax or celebrate yet.”
That will mean more of the same for HR professionals in Singapore and the rest of Asia: more avoiding retrenchments; more working to do more with less; and more strategic thinking to help organisations survive.
Lee says the Singapore Government will do all it can to help. “We can help companies to save costs and to help employees stay employed. We know how to do it, we know that is where we need to focus, and we have put our resources and energy on saving jobs,” he said.
The Prime Minister also called on employers and HR leaders to exercise caution and responsibility in what could be a politically destabilising period. He says there are stress lines within the local community which could be inflamed by unfair hiring – or firing – practices.
”We have to remind employers to hire fairly and retain fairly, based strictly on merit and performance,” he said. “When you are under stress, having to decide who to keep, who to drop, you have to be completely fair, otherwise we will have big problems in Singapore.”
This is particularly true when it comes to the racial and religious divide in Singapore. “In a downturn, we are concerned that minorities (and) non-Chinese workers will be more affected because larger proportions of the Malay and Indian workers have lower skills, and lower skilled workers are more vulnerable. It happened in the last recession, and it will likely happen in this recession.”
Over the much longer term, the Prime Minister says there are some positive signs. Major international businesses still see the island-state as a place to invest and do business. As well as the two integrated resorts, Lee pointed to several positive meetings he had recently had with potential investors.
“They are impressed with how our government and our people are responding, and they see Singapore playing a bigger role as they do more in Asia,” he said. “Many of them have specific plans to invest here, or are in fact, recruiting here, even now.”