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This is because employees are more receptive to improving themselves in such times, veteran human resource practitioner Elizabeth Martin-Chua said yesterday.
Companies can also use the time to prepare workers for the next economic recovery, the recently retired senior vice-president with Royal Philips Electronics said on the sidelines of the inaugural Singapore Human Capital Summit.
She echoed what other business executives at the conference said: That a recession presents opportunities for companies to spot potential leaders, ramp up training of workers and build up trust between management and employees.
Standard Chartered Bank's group chief executive officer Peter Sands noted that real leaders can be identified in bad times: 'In times like that, courage and determination are needed in leadership.'
A slowdown in business also allows time to send workers for workshops and other training to hone their skills, said hospitality group Banyan Tree Holdings executive chairman Ho Kwon Ping - a view shared by IT company Hewlett Packard's vice-president for human resources Michael Vavakis, and logistics and supply chain management company YCH Group's chief executive officer Robert Yap.
YCH, for instance, plans to train its workers in China, Indonesia and India in radio-frequency identification technology, which can be used to track inventory. This is currently used only in its Penang operations.
By doing so, it can scale up its business more quickly when the upswing comes, said Mr Yap.
This was the case with Philips' operations here during the 1997 Asian financial crisis, said Dr Martin-Chua. She was the Dutch multinational's executive director and vice-president for human resource.
With less work to do, its 5,000 employees at the time were divided into groups of 100 and attended three- to four-day workshops to help them improve on quality and productivity.
The company also identified under-performing workers and drew up improvement plans for them.
'They responded well because they were so glad they could keep their jobs,' she said.
'During good times, everybody threatens you: 'If you don't rate me well, there are others I can go to'.'
At a gala dinner last night for conference participants, Acting Manpower Minister Gan Kim Yong called on business and other leaders present to keep investing in their workforce during a downturn: 'I urge all organisations not to let up on talent development efforts and cut back on investments in human capital.
'When the economy recovers, organisations with a team of talented and skilled personnel would be better positioned to take full advantage of the new opportunities.'
He also launched an award by his ministry and French business school Insead to recognise Asian-based organisations with exemplary human capital management practices.
Applications for the award open from December.
Adding variety to the continuing education and training system here, he also announced two new national-level competency standards in human resource, and in leadership and people management.
They are part of a growing list of certifications for workplace skills that are designed to be comparable to formal academic qualifications.
Areas now covered include retail and precision engineering.
Retraining workers in a downturn is the preferred option to retrenchment, employers attending the conference said.
Banyan Tree's Mr Ho said that when his hotel business in Phuket was hit following the 2004 tsunami, he met his 4,000 employees there and asked them to voluntarily take pay cuts or no-pay leave.
'Everybody volunteered... As a result, we did not have to retrench anyone. It's this kind of a social contract within a company that takes time to develop.
'They trusted the management, and when times became good again, we gave good bonuses and restored their pay. So I've confidence now that if another crisis hits us and we need to do something like that, people would do it.'
Additional reporting by Elizabeth Wilmot
