Humans, key components in business

2009-03-05 00:00

The global economic crisis has turned many business practices upside down. None more so than those pertaining to people. For many years, the accepted dictum has been that a skilful and far- sighted approach to human resource management would lead to improved competitiveness.

Progressive people strategies, it was argued, would give organisations an edge over their opposition. Yet many companies have paid and continue to pay lip service to the role that human capital plays in improving performance.

As the global crisis deepens, many of the world’s most famous business organisations have been retrenching employees at a rate not seen for decades. The result is that challenges in the post-recessionary world are going to be mountainous.

Competition for people talent will ironically increase as a re-sult of the current widespread unemployment. Markets and industries will move into a new equilibrium, leaving people to reflect on their true value to employers and their trust or lack of trust therein. Companies will have to implement a lot of internal marketing to re-establish lost credibility with actual and potential employees.

Post-recessionary companies worldwide will encounter four main human resource trends. The wise will not only be al-ready taking cognisance of these, but they will also be strategising to minimise the potential disruptions that they could wreak on the manner in which future business will be conducted.

The first of these is that people talent and leadership capabilities are increasingly in short supply. As business practice be-comes more complex and em-ployees’ expectations change about what they want from their jobs as well as from life in general, the pool of talented individuals is diminishing.

Secondly, research indicates that throughout the world, workforces are becoming older with people having fewer children.

A team of researchers from The Boston Consulting Group has recently proposed that many organisations will find it difficult in the long term to fill key positions, and to replace the valuable expertise held by retirees.

Thirdly, as more organisations become global players, the recruitment of foreign talent together with the integration of diverse cultures will compound an already complex human resource environment.

Lastly, more employees appear to be wanting a life outside their workplace. Future decisions about careers and jobs will be made on the basis of, for example, family life and a desire to follow personal interests and passions unrelated to the working environment.

While there are numerous strategies that can be employed to manage these trends, several stand out. Firstly, organisations need to make a human resource (HR) strategic plan the cornerstone of their corporate strategy. This demands that senior management has a good understanding of the extent to which its corporate strategy needs people. Such a position gives direction to the HR function and assists with the scenario planning for the number of prospective employees, their qualifications and when they are likely to be needed.

Secondly, organisations need to understand fully employee sourcing. This includes recruitment, internal staffing, the marketing and branding of the HR function (both internally and externally), as well as diversity issues that target workforce requirements.

Linking this to the company’s demand for future employees provides greater insight as to how expertise can be more effectively employed.

Thirdly, each employee’s performance review must reinforce the company’s corporate strategy, with staff development being aligned with the organisation’s chosen direction in the marketplace.

Lastly, employee compensation and retention need to be regularly measured, as does work-life balance, staff engagement and motivation. This gives management the opportunity to improve relationships with and between staff, a key component in the development of any competitive advantage.

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