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In economics, the term recession
describes the reduction of acountry's gross domestic product
(GDP) for at least two quarters.
The usual dictionary definition is "a
period of reduced economic activity"
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The United States-based National
Bureau of Economic Research (NBER)defines economic recession as: "a
significant decline in economic activity
spread across the country, lasting morethan a few months, normally visible in
real GDP growth, real personal income,
employment, industrial production, andwholesale-retail sales.
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That private organization defines a
recession more ambiguously as "a
significant decline in economic activityspread across the economy, lasting morethan a few months.“
In macroeconomics, a recession is adecline in a country's gross domestic
product (GDP), or negative real economicgrowth, for two or more successivequarters of a year
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History of recessions
· July 1980 - November 1982:2 years total
· July 1990-March 1991:8 months
· March 2001-November 2001:8 months
· December 2007-current:15 months as of March 2009
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Causes of recessions
Currency crises
Energy crisis
Under-consumption Overproduction
Financial crisis
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Causes of recessions Currency crises A currency crisis, which is also called a balance-
of-payments crisis, occurs when the value of acurrency changes quickly, undermining its ability toserve as a medium of exchange or a store ofvalue. It is a type of financial crisis and is often
associated with a real economic crisis
Energy crisis An energy crisis is any great bottleneck (or price
rise) in the supply of energy resources to aneconomy. It usually refers to the shortage of oil and additionally to electricity or other naturalresources. An energy crisis may be referred to as
an oil crisis, petroleum crisis, energy shortage,electricity shortage or electricity crisis
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Underconsumption
In underconsumption , recessions andstagnation arise due to inadequate consumer
demand relative to the amount producedOverproduction
In economics, overproduction refers to
excess of supply over demand of productsbeing offered to the market. This leads tolower prices and / or unsold goods
Financial crisis The term financial crisis is applied broadly toa variety of situations in which some financialinstitutions or assets suddenly lose a largeart of their value
Th I f R i
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The Impact of Recession on
Employment
As, the impact of recession isunpredictable and depends
entirely on the nature of therecession. The lessons learned onpast recessions have somehow
helped us trace the patterns andgiven us ideas on how to solve theproblem.
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The Center for Economic and PolicyResearch states that the looming
recession will raise unemployment by
about 2 to 3 percent depending onthe nature of the recession. Thismeans that there will be about 3 to 5
million unemployed Americans in
case it happens.
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On the other hand unemploymentdata doesn’t represent the educated
workforce. For them, the truth is there
are more available jobs than there arecandidates and the unemploymentrise affects mainly the low-skilled
workers .
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STRATEGIC ROLE OF HRMDURING RECESSION
The recession is about the creativeHuman Resources Management. TheHRM Function is asked to bring new
ideas, to change the HRM Processes andto develop or change the procedures. Andthis effort has to be cheap or it has to cut
the costs of the organization. The HRMInnovation is easy in times of the businessgrowth, but the recession is not good forbig innovative HRM Initiatives.
Th i t h t b f d b
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The point has to be focused by
HRM during recession are as
follows: To optimize the manpower strength.
To take strategic initiatives to increase the
productivity and efficiency of the entireorganization.
To work on compensation benefits.
Redesign training and development programs.
Ensure your organization’s policies andhandbooks are up to date.
To identify the real key employees and to intact
them in the organization
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Layoffs. Ensure you are familiar with your legalresponsibilities in a lay off to minimize your
organization's risk. Be sure that you haveproperly defined the criteria you are using todetermine who will be let go.
Redirect Your Employees to Other Departments(Job Rotation)
Listen to Your Employees
Keep Them Motivated and Busy(Communicate-Communicate andCommunicate)
Show them the long term vision
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Thank You
BY
MUNISH SHARMA
HARJOT SINGH
HIMANSHU GIRIDHAR
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