 Five
Hints for HR Management Survival
The business environment is still in the mist of the downturn,
urging organisations to plan for the worst. Some plan for
redundancy as an ineluctable decision for cost reduction,
whilst some resort to other measures such as hiring and salary
freezes, or no pay leaves. In such a period of economic hardship,
how can HR leaders "do more with less"? Here are
some hints to lead you through the uncertain times.
Found by a new survey of 245 large US employers conducted
in February 2009, 52 percent have made layoffs, up from 39
percent two months ago, but the number of organisations planning
layoffs has fallen, whilst many expect to make further cost-cutting
changes this year, such as hiring freezes and salary freezes.(1)
Companies may take the opportunity
afforded by the economic slowdown to look around their HR
functions and consider how they can improve them.
I. Rightsizing Rather Than Downsizing
Talking about the wave of layoffs, Mr. Philip Wixon, Practice
Leader of Hewitt Associates LLC says, "Certainly some
companies cannot avoid layoffs. These companies we describe
as 'taking on water' - if their business is losing money,
then costs have to be managed immediately. For other companies,
there is definitely some 'pain' being felt. The immediate
actions include hiring freezes and salary freezes."
However, as Mr. Wixon reveals, in the past few months, Hewitt
has been asked by clients to look at other ways to maximise
efficiency. In particular, CEOs want to know if their people
are focused on the right work activities, and if they have
the right number of people doing the work. Rather than downsizing,
this might be regarded as 'rightsizing'.
Mr. Wixon continues and says, "For the companies we have
done this analysis for, we are finding that in fact roles
and responsibilities are unclear, i.e. people are unsure of
how far their job extends thus often creating overlaps in
work, that decision making levels are incorrectly calibrated,
making business processes slow, and that the roles and responsibilities
between headquarters and branch locations are also not well
defined, which again causes overlaps or misunderstanding in
who does what."
"T he net result is that these companies are potentially
carrying more people than they need to deliver their products
or services. There is no easy way to deal with this except
to figure out where the over-resourcing is and decide whether
these people can be redeployed to other parts of the business
or let go," he suggests.
II. Outsourcing and "In-sourcing"
Hewitt's January 2009 HR Monthly Watch report indicates that
companies are under significant pressure to evaluate the size
and composition of their existing workforce, control costs
and scale back wherever possible, and are seeking to find
the best way to do so without jeopardising their talent pipeline.
It also discloses that companies are taking additional measures
to promote greater people, increase HR efficiencies, and curtail
costs.(2)
When it comes to increasing HR efficiencies, Mr. Wixon thinks
outsourcing is definitely an option. "Outsourcing is
now, after 10-15 years of experience, a viable and safe option
for many companies. Interestingly, many companies in the 1990s
looked at outsourcing for cost reduction. In the past decade,
companies realise that whilst some cost reduction is good,
the major benefits of outsourcing include better governance
control and more time to focus on more strategic issues in
the company."
Apart from outsourcing, Mr. Wixon also mentions "in-sourcing"
as another option. "Without the need to fully outsource,
some companies are considering Shared Services. Here, the
company is typically large enough with, say, four or more
locations, that it can set up its own servicing hubs. Often
called 'in-sourcing', the company is effectively choosing
a single location within the company to share standard processing
tasks currently managed across multiple locations."
III. Make Things Clear - Communication
It is not surprising to find employees in low morale in a
downturn where uncertainty makes them worried. As Mr. Raymond
Cheng, General Manager, Business Management Division &
Productivity Training Institute of Hong Kong Productivity
Council suggests, what HR leaders have to do now is to make
everything clear, so as to dispel employees' worries and doubts.
Mr. Cheng says, "Staff morale is mostly affected by the
current difficult condition. Some employees are afraid of
losing their jobs, and are losing confidence in their companies.
Thus it is important for employers to hold regular meetings
with staff and regain their confidence by informing them of
the company's current status as well as its development."
According to Mr. Cheng, besides restoring people's confidence
and team spirit, frequent and sufficient communication also
enables employers to align their employees with business targets
and development plans, so that they know what to do to help
company achieve its goals.
IV. Technology for Cost-effectiveness
As technology evolves, Mr. Cheng thinks that the trend is
towards utilising technology, like e-HR systems to make efficient
HR functions and more companies are expected to adopt e-systems
to streamline HRM. In the meantime, Dr. Andy Wing-chiu Chan,
Associate Professor, Department of Management & Marketing
of The Hong Kong Polytechnic University reminds HR leaders
to make sure they are systematically making full use of cost-effective
systems, otherwise HR efficiency may not be maximised. "In
the moment, HR really need to keep their HR technology up
to date," says Dr. Chan.
Mr. Wixon mentions a common problem found in many companies
in terms of the use of technology. "We often see many
companies with large Enterprise Resource Planning (ERP) systems
under-utilising their HR modules. In fact, the technology
exists now enables companies to run their entire performance
management and succession planning process on-line, as well
as providing staff with the 'self service' tasks such as applying
for leave on-line." By doing all of this, technology
is freeing up HR to focus on more strategic tasks such as
future workforce planning and talent identification.
"There are many systems out there, but regardless of
which system is chosen, those companies who are not 'taking
on water' in the current economy may take the opportunity
afforded by the economic slowdown to look around their HR
functions and consider how they can improve them through the
adoption of technology," he suggests.
V. Upgrade Your Staff and Yourself
Besides the use of technology to keep up with changing times,
HR leaders should also keep both themselves and their staff
up to date. Hence, Learning and Development should never be
neglected. It is absolutely not wise to curtail spending on
L&D anytime even if the economy is slowing.
"Although the current economic condition may necessitate
reductions in force, companies should provide more training
to their staff. After the workforce is downsized, staff may
have to concurrently take up other duties that they haven't
taken up before. Unfamiliarity with new work will probably
result in lower efficiency. It is thus essential to provide
relevant training to help these staff master new knowledge
and skills, at the same time change their mindset to catch
up with the times," Dr. Chan remarks.
L&D is important for employees, so is that for HR leaders!
"Effective leadership requires HR professionals to keep
updating their knowledge and skills. Today's HR professionals
should be all-round. They may upgrade themselves to be a trainer,
and enrich their product's knowledge in order to enhance their
value in their organisations," says he.
Dr. Chan points out that with more and more companies develop
their business in the Chinese mainland, it is a great trend
for leaders to know more about the country, such as the business
environment there, the new Employment Contract Law, as well
as the condition and law practices in different provinces
and cities.
Both Dr. Chan and Mr. Cheng suggest HR leaders consider taking
examinations to obtain professional qualifications, such as
"National Enterprise Trainer" or "National
Human Resources Manager" Examination organised by Ministry
of Human Resources and Social Security of the PRC. At present,
these examinations can be taken in Hong Kong as some local
universities and educational institutions co-organise these
examinations. Whilst it is more common that HR need to work
in China, it would be an added value to possess these qualifications.
Gear Up for the Upturn
In closing, HR management will play an even more important
role in determining organisational success and meeting a variety
of internal and external challenges in the future. Companies
should grab the opportunity of the downturn, look for ways
to streamline HR functions, and equip both their workforce
and themselves with essential practical knowledge and skills
set, so that when the economy recovers, they are well placed
to take full advantage of the upturn.
References:
(1)"Effect of the Economic Crisis on HR Programs",
Watson Wyatt, February 2009.
(2) "HR Monthly Watch", Hewitt Associates LLC, January
2009.Caption:
|
