After economic collapse: What happened to human resources in Iceland?

Abstract

The purpose of this study was to understand the effects of the 2008 economiccollapse on the role of the human resources function (HR), derived from thepremises that the HR profession is sensitive to outside conditions and itscontinuous search for legitimacy and power. It utilizes a qualitative researchmethod, comprising semi structured in-depth interviews with Icelandic HR dir-ectors responsible for HR during the 2008 economic collapse. Analyzing thedata by coding it by major themes, unusual single events or issues, allowsvaluable insight into the HR role in times of economic turbulence. Key findingsare the following: 1) The HR profession’s search for status and power is appar-ent in the focus on having a seat on the organization’s board, persistently shownto be the profession’s ultimate goal. 2) A variety of retrenchment methods wereutilized during the collapse. Interestingly, lowering salaries was deemed un-successful, appearing to affect long-term recovery. 3) Role changes: While theHR directors appeared to gain input and power during swift and far-reachingcost-cutting, Ulrich ́s (1997) ‘employee champion’ role became dominant and anenhanced sense of responsibility for employee wellbeing. Furthermore, HRdirectors assumed responsibilities traditionally outside the realm of HR. Thefindings demonstrate the continued vulnerability of the HR profession toexternal conditions.