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Management Report

Management reports, briefs issued by Samsung Economic Research Institute

Five HR Strategies in Dealing with Prolonged Low Growth

Five HR Strategies in Dealing with Prolonged Low Growth

KHO Hyun-Cheol, BAE Seong-O, YE Ji-Eun, CHIN Hyun
KIM Myeong-Jin, PARK Ju-Young, RYU Ji-Seong

Mar. 11, 2013

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Concerns are rising that low global economic growth will persist for a long time. Even if a lengthy trough does not materialize, a robust rebound cannot be expected soon. Under these circumstances, corporate management is under heavy pressure to keep costs in check, raise productivity and secure new growth engines. For Korean companies, where labor productivity is just 49% of that of the US, these tasks are especially challenging. To succeed, they will need to reshape how they handle their workforce.

A low-growth period is characterized by limited resources, squeezed profit margins, increased risks and fragile emotions in the workforce. In response, companies need to stress practicality, fairness and vitality. Practicality involves injecting resources with emphasis on tangible outcomes. This will differ from the typical cost-cutting seen in a downturn. Fairness involves fair HR due to limited resources and growing employment anxiety. Vitality stresses the mental alertness and internal communication of a company.

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