The impact of economic downturn on human resource policies in small businesses: the case of North Macedonia
Journal
Economic Development, Year 24, No. 2/2022
Date Issued
2022
Author(s)
Piperkova, Irina; Popovski, Vasil; Davitkovska, Elena
DOI
005.96:334.72.012.64.02]:338.124.4(497.7)
Abstract
Globally, businesses struggle to survive amid the rising uncertainty, inflationary pressures and increased costs as well as disrupted supply chains, which deeply affects their performance. Such economic turmoil
will inevitably result in cost cutting measures by businesses, thus affecting
their human resource policies and practices. This raises issues related to the
implications of the economic crisis on the human resource function and the
challenges in terms of human resource policies that small businesses face. The
main objective of this paper is to assess the immediate effects of the economic
downturn on the performance and management activities of small businesses
in the Republic of North Macedonia, as well as their response in terms of human resource management policies. The findings reveal that although small
businesses consider increased costs of doing business to be their primary concern, most of the surveyed businesses did not and do not anticipate to decrease
the pay levels or monetary rewards of their employees, nor do they plan major
reductions of employee training and development opportunities. In fact, as a
response to the growing inflation, many businesses have increased pay levels
of their employees. In terms of staffing policy, the results show that the majority of businesses have already frozen their planned recruitments, but do not
plan to implement layoffs. These findings are in line with the studies on firms’
human resource policy response conducted during previous economic crisis
will inevitably result in cost cutting measures by businesses, thus affecting
their human resource policies and practices. This raises issues related to the
implications of the economic crisis on the human resource function and the
challenges in terms of human resource policies that small businesses face. The
main objective of this paper is to assess the immediate effects of the economic
downturn on the performance and management activities of small businesses
in the Republic of North Macedonia, as well as their response in terms of human resource management policies. The findings reveal that although small
businesses consider increased costs of doing business to be their primary concern, most of the surveyed businesses did not and do not anticipate to decrease
the pay levels or monetary rewards of their employees, nor do they plan major
reductions of employee training and development opportunities. In fact, as a
response to the growing inflation, many businesses have increased pay levels
of their employees. In terms of staffing policy, the results show that the majority of businesses have already frozen their planned recruitments, but do not
plan to implement layoffs. These findings are in line with the studies on firms’
human resource policy response conducted during previous economic crisis
Subjects