Cyprus in Crisis: HR Coping Mechanisms

17 April 2013 & 24 April 2013

It is the first time CyHRMA introduced the institution of Round Table discussions with the hot topic “Cyprus in Crisis: HR Coping Mechanisms”. Two meetings were held, on 17 & 24 April 2013, at the University of Cyprus premises (Nicosia) and at the Technological University of Cyprus (Limasssol) respectively.

Αt the Nicosia meeting the coordinators were Mrs Chris(Chrysoula) Mathas (Former President of the CyHRMA), Mr. Artemis Artemiou (Honorary (Former) President of the CyHRMA), Mr. John Papachristos (Managing Director of the company Workforce Cyprus), whereas in Limassol the roundtable was coordinated by Mrs Chris (Chrysoula) Mathas and Mr. Andreas Papagapiou ( of Deltasoft Ltd).

Numerous HR professionals/association members participated from both local as well as international companies based in Cyprus. During the introduction, the President described the institution of Round Table and then the discussion expanded with reference to the following topics:

  • Human Resource Management and liquidity
  • Personnel support and measures for ensuring the right mindset
  • Comments / Ideas


The main reason companies close/shut operations is due to the lack of liquidity and not due to the lack of profits.

“How the management of human resources affects the liquidity of a company and what it needs to be changed in order to meet current challenges? Is there a way to increase productivity without increasing the costs?”


  • The crisis could be interpreted as a result of failure of Leadership and consequently a result of failure of HRM since it shapes the business strategy, culture etc.
  • The liquidity today is nonexistent and causes significant negative effects. HRM should safeguard and improve liquidity and of course, there are many ways to do this.
  • It seems in a great extent that HR professionals have not been involved enough with the issue of liquidity and have not taken enough initiatives and action to manage positively this issue.
  • HRM has the duty to take up measures and it should play a key role in these difficult times redefining its role. HRM and entrepreneurs should “speak the same language”.
  • HR professionals should consider and implement all ways and options available before deciding on layoffs which should be the last and worst scenario.
  • HRM should decide if having the same number of employees in a company is the right thing to do when there is no such a need. Employees’ dismissal may ultimately be the right solution both for the company and employee as he/she can grab this opportunity to make his/her self-evaluation, see what he/she really wants to do in his/her life and engage in something new and different.


  • Each Human Resource professional must get to know the company they work for very well as well as its workforce and operations.
  • They should compile a dynamic liquidity plan to accurately forecast future liquidity needs.
  • HRM should focus on alternative ways of employment, organization and personnel management such as:
    A) Part-time jobs
    B) Reduction of working hours – hence employees could engage in something else in their free time to make up for the lost salary
    C) Job sharing
    D) Work from home
    E) “Borrowing” employees to customers or other countries in case the company undertakes international activities.
  • Wages reduction – HRM should redesign the payroll system and various benefits, make the necessary adjustments and then implement the procedure for salary reduction.
  • Stop wages increasing/allowances or contributions to provident fund.
  • Break down the components of a salary in two parts: a basic salary and bonus. Consequently, all employees will always be in action through the implementation of a correct employee performance evaluation.
  • Implementation of a comprehensive policy addressed to low performers.
  • Maintain closer collaboration with customers – ask the customer what he/she wants and make the relevant changes in the company.
  • Maintain closer collaboration with other internal departments such as the Risk Management Department which could assist in forecasting possible dangers considered to be a threat for the company. HRM then can use this information in preparing the organization for future challenges.
  • Proper recruitment practices, selection and performance appraisal.
  • Make coherent proposals at all levels aiming at indentifying the necessary skills and capacities, placing the right people with the right skills to the right place and thus reducing expenses.
  • Encourage and build a great corporate culture which will enable employees to innovate everyday across the organization.


  • A well known educational institution, took the following measures to deal with the economic crisis in 2008: wages cuts giving in return 12 additional days of compulsory leave to employees and working hours reduction (2 hours) which upset staff. Initiatives were taken by the educational institution to receive income from other sources for example through the establishment of a Medical School (Pre-medicine), Online Programs (Ε-learning) and opening offices in other countries. Additionally, groups of people were composed aiming at building a closer relationship with the President of the educational institution which resulted in bringing closer the Leadership with the “front line”. Finally, employees with a lot of years of work experience trained other employees of the educational institution.
  • A consulting firm initially fired staff. Everything runs more smoothly this year. There is a strategic plan in which HRM and managers are involved and take initiatives.


“How can we help employees maintain a positive and optimistic approach so as to effectively support the organization in a business environment characterized by uncertainty, unpredictable changes and shrinking markets?”


  • Trust has been shattered in all sectors and at all levels – HR professionals must find ways to regain trust from employees. Internal communication is the key to success regarding the psychology in times of crisis. HRM must play a key role in the management and utilization of internal communication.
  • The biggest enemy of employee’s mental state is uncertainty and the fear it causes.
  • Lack of liquidity and hiring freeze cause gigantic uncertainty.
  • The crisis affects each one in a unique way, thus HRM should not adopt standardized approaches/solutions but should identify and cover individual needs of each person and team separately.
  • The aim is to maintain a positive and optimistic approach for the future and give the necessary guidance to the personnel to build its resilience in change and focus its energy on activities which create and ensure values.


  • HRM should be addressed both to the workforce and Leaders. In case that the appointed person hears and takes necessary measures is indifferent, then HR professionals must find the right key-person who will listen and act accordingly.
  • Re-assessment of each employee and repositioning to the right place according to his/her skills, the strategy and needs of the company.
  • HRM must ensure that all messages coming from leadership are realistic and that employees’ expectations reflect the reality. The HRM must tell the truth to employees for all issues which are of their concern and affect them.
  • Returning to the right values and principles.
  • HRM being a good example to employees should send realistic messages and guide them properly.
  • HRM must puzzle employees.
  • HRM must find ways to “wake up” employees and make them realize of the importance of values and performance.
  • HRM must inspire employees.
  • HRM must guide employees. It must be in place to show all available options and make them focus on the questions “What do I want?” and “What are my options now?”
  • HRM must maintain employee useful through various measures such as training.
  • Employees must get involved in various teams and form Τeam Briefings and Quality Circles along with their managers to facilitate discussion and expression of their views. Through discussions they can come up with solutions to their problems as well as to the problems of their organization.
  • Introduction of institutions related to the support and care of personnel (Employee Assistance Programs) aiming at dealing with conflicts, reinforcing resilience, providing psychological support etc.
  • Invest in continuous training.
  • Redefine the culture of the organization and implement relevant programs which will bring change.


  • The current crisis highlights once again the importance of an integrated strategic planning in which HRM should actively participate.
  • Another important element that should characterize HRM is the ability to forecast and take painful decisions when necessary. It should put an end to procrastination and indecision which their consequences could prove catastrophic.
  • Provide incentives to employers in order to invest in creating new job positions.
  • HRM must be in a close collaboration with the Management/ Leadership. Let’s not forget that HRM is the “tool” the various departments in an organization use to achieve their goals (e.g. Marketing & Sales). These departments serve the needs of customers and bring profit to organizations.
  • Goals and values should be redefined and on the other hand the HRM department must alter the way employees think of their work.
  • Evaluation during hiring, probationary period as well as the HRM planning must operate in a right way.
  • The HRM department should stop feeling sorry for the employees and overprotecting them.
  • HRM should develop effective behaviour resulting in desirable outcomes and fight reactive behaviour and negative thinking.
  • HRM should stop tolerating anything which is undesirable and train employees to the desired outcome.
  • The Public sector should get involved in the same way private sector does. The Public Services should become more extrovert and active.
  • HRM should be aware of the capacities of its company and propose realistic strategies.
  • All the above suggestions can turn out to be possible if the organization’s culture change. This change will result in the restructure of a company. Good things take time and effort.