Human Resource Planning and Recruitment Strategies - Case Study Example

INTRODUCTION In a stable economy, human resource planning, recruitment and flexibility are driven more by long term rather than short term needs. For instance, organizations can afford to send fifty employees to learn how to use a technology that will not be operational until after two years. Again, some organizations would recruit staff way ahead of the position becoming vacant. This is because of the predictability of the economy during these times. Things will always work out as planned. But in an economy negatively affected not only by local, but global issues, with no solution in the nearest future, organizations need to tread the path of caution. The present global financial meltdown has created real and urgent human resource issues for organizations throughout the world. Everything seems to be shrouded in uncertainty. Employers are unsure of how events will play out in the near future, while employees sit tight, holding fast to the job on hand, not because they don't want better opportunities but because everything is in a stand still. For the purpose of this study, I interviewed an employee of KPMG, who provided me with details concerning the prevailing conditions in the company, as a result of the global economic crisis. KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. The firm has a total of 137,000 outstanding professionals working together to deliver value in 144 countries worldwide. BEFORE THINGS WENT SOUR The realities created by the present global financial crisis are poles apart from what used to obtain when the global economic climate was good. Being a firm that recruits high flyers and top graduates, there was always a high turnover in manpower before the crisis began. People were leaving and coming in at a fast rate. This implied that HR was always on its feet and on the move. Career fairs and campus recruitments were conducted every three months to recruit the best and put them on standby, even if there were no vacancies ( it was sure someone would leave soon) Compensation and benefits were reviewed every year to retain as many people as possible Opportunities for off-shore trainings abound. Members of staff were sent on trainings several times every year There was a great deal of flexibility in work style. People were allowed to come into the office at flexible hours provided they worked for the stipulated number of hours Consulting jobs from clients streamed in whether employees went out on marketing or not. The reputation of the company attracted new clients every day. Sometimes the firm had no option other than to reject jobs that are not value adding Performance Management is a very objective process, but hardly does it result in lay-offs and dismissals HUMAN RESOURCES PLANNING IN A RECESSION According to Vetter (1967, p15), Human Resources Planning is "the process by which management determines how the organization should move from its current manpower position to its desired position. Through planning, management strives to have the right number and the right kinds of people, at the right places, at the right time, doing things which result in both the organization and the individual receiving maximum long-run benefits". Writing in the American Psychologist, Jackson and Schuler (1990, pg 227) state that "traditionally human resource planning occurs within the context of the overall organizational plan and its strategic focus. It generally involves predicting, in the light of prevailing circumstances and past performance, the organization's future human resource needs and planning for those needs to be met". It includes establishing objectives and then developing and implementing programs (staffing, appraising, compensating, and training) to ensure that people are available with the appropriate characteristics and skills when and where the organization needs them. The biting economic climate has affected planning in several organizations. Now more than ever, there is uncertainty about the future and how things will unfold. Planning is now kept at a low level and it is more focused inwards than outwards. TABLE 1.1: SUMMARY OF PREVAILING SITUATION IN THE FIRM STATUS STAFFING COMPENSATION TRAINING AND DEVELOPMENT Upturn Encourage sufficient turnover to minimize layoffs and provide new openings. Encourage mobility as reorganizations shift jobs around. Control compensation costs, but ensures that employees are competitively remunerated Flexibility and skills of an aging workforce. Series of offshore trainings attended Downturn Plan and implement workforce reductions and reallocations, downsizing and outplacement on the increase Implement tighter cost control. A percentage of salary is now tied to performance Implement retraining and career consulting services. Trainings are mostly in-house FLEXIBILITY IN A DOWNTURN During this period, organizations are critically looking inward to see how much of their internal processes, procedures and methods they can streamline, modify and optimize to bring down cost to the barest minimum. They are continuously seeking advice from consultants on ways to be flexible and cautious at the same time. In a release by PriceWaterHouseCoopers (Issue 7, March 2009), advising manufacturing companies on the way forward, they state that "the manufacturing industry has taken the lead on offering reduced salaries to save jobs. Other sectors have focused on redeploying people to those parts of the business that continue to thrive. We are seeing changes to benefit structures to drive out expense and a true flexibility on variable pay to eliminate 'wasted' incentives. The message is clear - businesses in all sectors must consider different ways to reward and deploy their staff to minimise the long term impact of this downturn". Furthermore, what used to be tolerated when the going was good is now a sin. Any form of wastage, for example is greeted with sanctions. For example, I spoke with an older friend of mine who told me that in his company, you can only print documents only when your manager has signed a memo stating what is to be printed, the purpose and quantity. Even then, the cost is borne by the department instead of the firm, a practice which is unprecedented. This is not what used to be the case, where employees printed as many documents as they wanted, personal and official. In my focus company, there has been a decreased patronage by clients, leading to reduced revenue. As a result, salaries have been cut down and a good percentage of pay has been tied to performance. You only get that part if the company meets its target, a situation that is unlikely. There has been an emphasis on the need to account for every use of company facilities and equipments Furthermore, a number of low skilled jobs have been outsourced to low skilled personnel such as interns and temporary staff, in order to bring labour costs low. Stringent policies and practices are released on a daily basis to regulate workplace behaviour. Absenteeism and lateness are no longer condoned as before. Now, employees have to give cogent reasons why they are either absent or late and it has to be backed up by proofs. RECRUITMENT IN A DOWN TURN For many organizations, this is a time to cut cost as drastically as possible. Businesses rely heavily on the current volume of sales, anticipation of increased patronage and a host of favourable factors in deciding whether or not it wants to recruit. But in a downturn such as we find ourselves, there is a need to maximize the use of personnel at a very low costs. For positions that must be filled immediately, companies are resorting to alternative methods of recruiting such as head hunting, personnel referrals, internal advertisements and so on. As a result of the biting effect of the economy, there has been an almost total disuse of advertisement media. For my target organization, there has been more than 70% reduction in staff recruitment. In fact, in the last few months more than fifty people have been advised to leave, an unprecedented decision in the company. More and more, there is a mounting pressure on employees to justify the pay they earn by enlarging their job functions. People now do more than they are being paid to do. Internal recruitments and selection practices are now the order of the day. For instance, a critical position was vacant about six months ago. Instead of immediately sourcing expertise from outside the organization, given the critical nature of the job, the organization decided to send some staff members on an offshore training to learn the technology involved in the job. Again, reflecting the emphasis on cost reduction in the long run. Though there are claims from reputable sources that recruitment programs have not reduced in spite of the economic crisis, I think the activity is not as real as it seems. For example, an article on the Times Online website, quoted Matthew Parker, managing director of online recruiter Step Stone, as saying that he could see no signs of a downturn yet - either on the firm's jobs boards or in the software and services side. According to him, there was an increase in demand on both sides of his business. "We're having trouble recruiting enough talent for our own company," he said, indicating that the so-called war for talent has not abated. The actual situation might be that the alarming rate of lay-offs is compensated by a small increase in staff recruitment to fill wide gaps. In conclusion, we must realize that this phase is only a temporary one and will surely pass away. It is therefore, the responsibility of management to tread with caution in dealing with their staff during this period; so that they can remain loyal when things become favourable again. In his book Taking Charge of Change: 10 Principles for managing people and performance, Smith (1996) puts it clearly: "Today's most urgent performance challenges demand that you learn how to manage people through a period of change.....People facing change need more than understanding of the end of their journey". REFERENCES Jackson E.S and Schuler R.S., February, 1990. Human Resource Planning: Challenges for Industrial/Organizational Psychologists. American Psychologist. PriceWaterHouseCoopers Electricity and Gas Update briefing. March 2009. Managing People in the downturn, Issue 7, Employment Cost Flexibility. http://www.pwc.co.uk/pdf/issue_7_managing_people_in_the_downturn.pdf (Accessed 20 November 2009) Smith D.K (1996). Taking Charge of Change: 10 Principles for managing people and performance. Harvard Business School Press. Times Online. April 13, 2008. Hunters out in force despite downturn. http://business.timesonline.co.uk/tol/business/career_and_jobs/recruiter_forum/article3735009.ece (Accessed 17 August 2009) Vetter, E.W., 1967. Manpower Planning for High Talent Personnel. American Psychologist Arbor: University of Michigan, Graduate School of Business. Interview conducted over the phone with an employee of KPMG on the prevailing human resource situation in the firm - 17/11/09 Read More