HR playbook: People managers in eye of storm as Trump’s tariffs lash workforce strategies
As President Trump’s tariffs send shockwaves through the global economy, HR leaders find themselves at the epicenter.
With markets reeling and economists predicting soaring prices and job cuts, people managers are scrambling to maintain organizational stability while navigating the uncharted — and the impact on talent is already evident.
The electronics trade association IPC reports that 18% of companies in the sector have frozen hiring specifically due to the tariffs, with another 36% considering it. This, as the outplacement firm Challenger, Gray & Christmas put total March layoffs at more than 275,000 — a figure bested only by the darkest days of the pandemic.
And even though the U.S. economy added far more jobs than expected in March, the tariffs could test the resilience of the labor market moving forward, according to economists.
HR departments aren’t merely watching from the sidelines but, rather, are right in the thick of it. “This isn’t a knee-jerk reaction to uncertainty — it’s a deliberate reset in how HR will think about leadership,” said Camille Fetter, founder and CEO of Talentfoot Executive Search & Staffing. “Those that adapt the quickest will dominate.”
The impact of the tariffs on HR extends far beyond hiring freezes. Sherri Bockhorst, head of consumer experience and strategy at the employee benefits tech firm Businessolver, warns that they also promise to send pharmaceutical costs skyrocketing, creating an immediate crisis for HR people already battling healthcare inflation.
With a reported 80% of active drug ingredients in the U.S. sourced from other countries, according to the FDA, the tariffs threaten to amplify an already explosive problem, Bockhorst stresses. Nearly half of 740,000 employees her company recently surveyed admitted they would feel “panicked” by unexpected medical expenses.
With the threat of layoffs in the air, workforce morale is another factor. “Building a strong workplace culture takes years — damaging it can happen much more quickly,” said Lisa Walker, global industrial practice leader at the talent advisory firm DHR Global. HR directors, with their unique vantage point, are ideally positioned to advise CEOs and executive teams on how to implement needed staffing adjustments “thoughtfully and strategically,” she added. “Often, it’s not just what is done but how it’s done that determines morale and engagement.”
When it comes to navigating fallout from the tariffs, Patrice Williams-Lindo, CEO of the coaching service Career Nomad, offers HR leaders a four-point battle plan:
Strategic triage. Describing HR as “part ER doctor, part chess master” in challenged times, Williams-Lindo said smart people management teams are mapping tariff-impact scenarios (mild, moderate, severe) and aligning workforce adjustments accordingly. The most critical questions: Which employees are essential for viability? And which roles could be repurposed rather than eliminated?
Morale CPR (Culture, Protection, Retention). “You can’t quietly gut teams and expect morale to hold,” as she put it. In the current environment, transparency becomes oxygen for organizational health. Winning strategies include proactive communication about stabilization efforts, highlighting investments in critical talent, and creating “micro-wins” like internal mobility options to keep top performers engaged despite economic turbulence.
Legal and ethical guardrails. In the rush to cut costs, companies must not ignore legal landmines, including the WARN Act, disparate impact concerns and retaliation risks. Beyond mere compliance lies a deeper question: What do companies owe employees during such systemic disruption? The best organizations are developing contingency plans that prioritize dignity and fairness, protecting both people and long-term brand trust.
Ripple effects for CPOs. The tariffs are just the tip of the iceberg, having the ability to impact compensation strategy, DEI goals, vendor partnerships and global HR policies. Forward-thinking chief people officers are activating internal think tanks that unite operations, HR and legal to scenario-test responses to future trade shifts — positioning HR as strategic commanders rather than reactive administrators.
As for employers looking to expand their talent pool in these times, Fetter advises recruiters to lean toward hires who can drive top-line growth while protecting margins, navigate geopolitical uncertainty while uncovering new opportunities, leverage AI without losing human connection, and build agile teams while maintaining operational excellence.
The CEO sees the best-positioned HR practitioners as those who can balance immediate cost pressures with long-term workforce strategy, ensuring their companies emerge with their most valuable asset — talent — intact.
As she sees it, “When it comes to hiring and retention in this environment, adaptability is now the most valuable leadership trait.”