How HR Can Help Organizations Adapt to Tariff Uncertainty
Nearly one-third of those surveyed last week by the Institute for Corporate Productivity (i4cp) say they expect their companies’ headcount to decrease as a direct result of the tariffs announced by the Trump administration, compounding challenges that include increased prices and disrupted supply chains.
The top action organizations are considering in response to challenges presented by the tariffs is revising their organizations’ current workforce planning strategies.
Of the 304 professionals who participated in last week’s survey, which ran from 4/9 to 4/14, 37% reported that adjusting their current workforce planning is under consideration. This is followed by pausing projects (34%), reframing global strategy (28%), and implementing hiring freezes (26%).
Exactly what those workforce planning adjustments will look like is uncertain.
While 32% said that their companies’ headcount will decrease, the same number (32%) said that their planned headcount will remain unchanged for now, and 27% said it’s just too soon to know. Only 4% said that headcount will increase in their organizations as a result of the tariffs.
Over half (55%) said that despite the Trump administration's promotion of tariffs as good for U.S. business, their organizations' leadership does not agree.
This group went on to cite perceived disadvantages such as escalating costs, supply chain disruption, delayed decision-making, lowered employee engagement, and potential talent loss.
There is also concern that hiking the costs of goods and services will decrease consumer demand (cited by 69%).
This is a complex issue made more complex by its highlighting of the immediate impact of brand behavior on customer perception (both internal and external) and the potential impact on competitive edge.
For example, we’re witnessing changing consumer behavior in real time in response to brand decisions and actions, and how those actions result in consumers feeling valued or disregarded by those brands.
It’s not surprising that the need to pass costs on to consumers, which could result in disillusionment of their customer base, was cited as another top concern (53%).
Those organizations that can avoid passing along increased costs to their customers (at least for now) can do a lot with brand-enhancing messaging:
“Here at Acme Inc., we care about our customers. Unlike our competitors over at ABC Co., we’re keeping prices down.”
Among the actions companies are considering taking to adapt to the tariffs, 29% of survey respondents reported that they are discussing how to capitalize on potential opportunities.
Others are taking a wait-and-see approach to varying degrees—in addition to the 34% who reported that their companies are hitting the pause button on projects, 23% said they are cancelling projects altogether due to current uncertainty.
These challenges add significant pressure to the HR function, which is already heavily engaged in navigating the disruption and uncertainty stemming from the Trump administration’s executive orders on diversity, equity, and inclusion (DE&I).
Strategies for HR leaders in responding to U.S. tariffs
HR leaders must stay informed, involved, and available to their teams. This starts with a deep understanding of the current landscape, the potential effects of tariffs on the industry and the organization, its workforce (employee experience, engagement, well-being, etc.), and business strategy. Things are shifting quickly and often unexpectedly—the goal should be to ensure that a plan and solid structure are in place to ensure agility and resilience, no matter what.
Ensure that the entire team understands the implications and scope
All HR team members should know which of the organization’s products and/or services are or might be impacted by tariffs, and how this may influence supply chains, manufacturing processes, staffing needs, etc. This could involve rethinking hiring practices, exploring cost-saving measures, or evaluating the feasibility of relocating operations or employees to countries with lower tariffs or more favorable trade relationships. While some organizations may be increasing their outsourcing of functions and talent to other countries, others are looking more closely at automation and AI to increase efficiencies in labor spend.
Prepare for difficult conversations and decisions
Tough decisions about reducing costs may be ahead. HR should be prepared for potential workforce reductions, restructuring, or adjustments in benefits, and the conversations that go along with them. If job reductions or restructuring are necessary, HR should be fully prepared to provide support through transition services, career counseling, and severance packages to maintain morale and provide a smoother transition.
Consider talent engagement and retention
Retention of key talent is always a concern when there are force reductions; do some scenario planning now. Will compensation packages need to be adjusted to remain competitive or aligned with the market? What about remote work? Could more flexibility help? Are policies in place for managing remote teams across different regions?
Cross-functional collaboration
HR should coordinate with teams directly impacted by tariffs (e.g., supply chain, manufacturing, procurement, etc.) to understand staffing implications or potential changes in operations. Communications should also be coordinated to ensure consistency and clarity in messaging.
Monitor policy changes
As we’ve seen, tariff policy and the ripple effects can change quickly. HR professionals should be alert to government announcements and updates to tariff policies that might affect their industry. Consider assigning someone on the team to monitor and provide daily updates as needed.
Three Cs: care, communication, culture
HR should be prepared and proactive in listening and communicating, especially during periods of uncertainty or crisis. Lack of information or vague messaging only exacerbates angst for everyone, HR included. Make sure that the talking points are as clear and transparent as possible to help reduce anxiety and keep employees informed and engaged.
A healthy culture is one in which everyone feels seen and heard. Stay on top of employee sentiment—conduct regular polls, surveys, or check-ins to ensure two-way communication is flowing. Making time to listen and acting on what can be acted upon sends a clear message that employees are heard.
By staying informed, adapting to changes, collaborating with others, and maintaining a flexible approach, HR professionals can help their organizations navigate whatever lies ahead.
Additional analysis on this data will be made available exclusively to i4cp members in the coming days.