ABSTRACT
The responsiveness of HRM models to changing economic and labour market conditions continues to be a challenging issue for practitioners while also providing fertile ground for academic research. The global financial crisis of 2008-2009 offers rich insights into the behaviour of firms during a deep downturn, and the resilience of prevailing HRM models in the face of adverse financial pressures. Drawing on comparative national labour market data along with a wide range of secondary sources, this chapter shows how organizational downsizing and outsourcing have in many ways been established as default responses to periods of turbulence, resulting in sharply rising unemployment in the immediate aftermath of the crash. Furthermore, some firms leveraged crisis conditions to reduce pay and conditions and implement changes to working practices that might not have been possible during ‘good times’. This employer opportunism has been partly facilitated by a deregulatory turn in many European countries and austerity cutbacks in public services. Nevertheless, cross-national patterns of restructuring are still shaped by a wide range of institutional factors, such as embedded systems of employment regulation, custom and practice arrangements with workers and trade unions, and social norms that promote fair treatment. This chapter concludes by arguing that those firms that looked to stabilize employment, retain and develop skills and invest in new technology during the downturn may be better placed to take advantage of a new phase of recovery as labour markets tighten and product markets become competitive on quality rather than price.
