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The H.S. Group logoINTRANSITION
FALL 2009
 
2009 Excellence in Talent Management Series
 
Virtually all organizations acknowledge the critical importance of employees in the success of their business.  The H.S. Group's 2009 Excellence in Talent Management Series was developed to assist you in creating and fostering a workplace where employees can flourish and your organization can reap the financial rewards. Our blend of leadership and human resource topics provides you with the information you need to impact both your employees and the bottom line.
 
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Is Your Company Prepared When the Recession Ends?

 
 
The recent recession took a heavy toll on many companies.  Staffs were, in many cases, severely cut.  Employees were asked to reduce their hours, move to new positions and generally take on the work that remained after colleagues were downsized.  Those who were retained stayed on regardless of the changes, often deciding it was better to have a bad job than no job at all.
 
During the recession, few companies were adding staff even though there was a large pool of available candidates.  Those companies that were hiring were especially selective, realizing they could demand industry experience, education levels and specific skill sets that previously were hard to find.
 
But what's going to happen as the recession ends?  Those companies that “cut to the bone” are unlikely to have the staffing necessary to meet product and service demand as the economy returns to pre-recession levels.  Companies planning to rehire displaced employees will be disappointed as those people will have likely either moved on or will be reluctant to return.  Companies may also face an unexpected problem: retained employees who suddenly leave the organization for better opportunities. 

Don’t forget that the workforce continues to grow older.  Predictions regarding staff shortages may be modified as employees delay retirement, but these people will still retire someday, and the number of skilled employees to replace them is insufficient. 

Is your company prepared for these changes?  For example:

  • Do you have the staffing resources to meet a significant increase in product demand?
  • Are your employees satisfied with the current work conditions at your company or are they preparing to jump ship?
  • Where and how will you find additional staff to meet short-term requirements?
  • What are the long-term needs of your company?  How has your succession plan been impacted by the recession and what will you do to get it back on track?

What You Can Do

Now is the time to act to avoid or minimize these potential problems.  Although it may seem risky to take action now, things are improving in the economy.  Company sales are getting better, inventories are being reduced and the need for increased production is growing every day.  In a recent survey, 30% of companies indicated post-recession hiring has started and 80% expect it to take off by the second quarter of 2010. 

  1. Companies that are adding staff today are tapping into a large pool of talented candidates.  Those that wait will find this pool depleted and the market for top talent very competitive.  Now is the time to assess your current staff, determine future needs, identify talent gaps or shortages, and bring quality people on board.  This includes your own Human Resources staff which may not be at the level necessary to handle the increased hiring.  Because of this, companies are increasingly looking to professional recruiters for help.
  1. Be smart about selecting and hiring people.  Understand what skills are required for success in the given position and the types of people that succeed within your own unique culture.  Use a variety of proven techniques including behavioral-based interviewing, assessments and background checks to ensure the candidate actually has the skills and abilities you need.  If you get into this pent-up employee demand late, be prepared to handle counteroffers and increased compensation demands.
  1. Take a close look at your staff.  How have they been treated with regard to work requirements, pay, benefits, recognition and appreciation?  Do you believe there are a significant number of staff members who are so dissatisfied that they will leave your company as soon as something better comes along?

If so, determine what you can do to keep them.  Improving pay and benefit packages helps of course, but most people leave a job not because of money but because of working conditions.  What changes can you make to improve your employees’ situation?  Look at training and development opportunities as well as work-life balance issues to see if there are things your company can do that will enhance job satisfaction and result in staff retention.

  1. Finally, think about the long-term future of your company.  What are your company’s strengths and opportunities for improvement?  What market and industry trends do you need to be prepared for?  Where will your future leaders come from?  What are you doing to ensure your staff, from top to bottom, has the necessary skills and experience to continue your company’s success?

A formal succession plan which identifies future company needs should include an evaluation of current staff skill levels and an action plan to ensure you have a skilled staff for the future.  If you don’t have one, develop it now.  Ideally, it should be a plan that states targeted goals for leadership and skill development, as well as specifies the actual training, mentoring and coaching you will be implementing.  If you already have a plan in place, make sure it is being implemented.

This is a dynamic economic period – one that poses great challenges but offers incredible opportunities for those companies that address challenges with vision and courage.

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A Look Ahead:  HR in 2010 & Beyond
 
Though economic downfalls have caused the crystal ball to be hazy as of late, recent reports of the first turnaround in over a year demonstrate that it's never too soon to look to the future.
 
Employers and employees alike will soon have a barrage of issues to address as the workplace we once knew undergoes, in some instances, a drastic facelift to accommodate the "new normal." 
 
Companies may begin to offer alternative benefits in exchange for the standard option packages, while technological advancements will allow employees to access their work from anywhere, anytime - a stanch contrast from the daily
nine to five.    

1.  Healthcare Costs Continue to Rise.  Employers can expect a 9% - 11% increase in healthcare costs next year.  Given the state of the economy, workers may be more likely to use their current coverage for fear that they may soon lose their coverage. 

In response, companies are looking at changes to their approach and current plan including:

  • Greater usage of wellness and disease management programs
  • Offering employees financial incentives to improve their health status
  • Changing value-based plan designs
  • Eligibility audits
  • Increasing the employees’ share of healthcare costs
  • Seeking more competitive vendor terms
  • Incorporating consumer-driven plans where employees spend their benefit dollars as they see fit

2.  World Business.  With a global economy, more businesses will be open around the clock to serve customers in foreign time zones.  Business practices may also become more uniform or may need to expand.  For example, American companies may need to scale back “snooping” on employees’ e-mail to make this practice more in-line with that of European businesses where this activity can be illegal.

On the other hand, American workers may seek the more liberal vacation policies and parental leave benefits of their foreign counterparts.

Staff scheduling may become more challenging and companies may need to provide services they do not currently provide (e.g., nighttime child care) to meet the needs of their staff.

3.  Changes in Technology.  It may become more difficult to send an e-mail unless you are on the approved sender list, but this will significantly reduce the junk e-mails people currently receive.  There is also a growing trend toward the integration of communications so that employees will be able to check their e-mail, voicemail and mobile messaging by looking in just one inbox.

More significantly, computers will play an increasing role in making decisions based on an analysis of tremendous amounts of data.  Predicting customer behavior, projecting equipment failure and maximizing the efficiency of things such as truck fleets and network resources will become increasingly more common.

Security will continue to be a priority, though privacy will be a concern as companies will be able to monitor nearly every aspect of their employees’ activities at work.

4.  Hiring Will Increase.  As the recession ends, hiring is likely to increase.  However, with the abundance of candidates and a reduced HR staff making sure the right candidate is selected, the process is likely to be more time consuming.  Understanding the requirements of a position, clearly posting the necessary, desired skills and qualifications, and utilizing a selection approach that combines assessments, behavioral interviewing and reference checks will ensure the right candidate is selected for the company.

2010 may provide an excellent opportunity for companies to add quality employees to their reduced staff.  But selecting the right people for the job and company takes careful planning and a systematic approach.  Those who are ahead of the rehiring game will benefit from the abundance of available talent.

5.  More Background Screening.  Background checks will become increasingly important as more and more companies use temporary labor to meet their staffing needs, and as companies return to pre-recession employment levels.  Screening services will provide companies with a more efficient and cost-effective selection process. 

This is especially important as desperate workers may be more likely to misrepresent themselves on their resumés in order to get a job.  Companies may be tempted to utilize credit reports and information gathered from social networks, but caution is advised as this approach may be viewed as discriminatory or may violate privacy laws.

6.  The Future Workplace Environment.  Given the large number of people who have been adversely impacted by all the downsizing, returning employees may be even less loyal to the company then they were before.  To motivate and retain staff, HR needs to better understand its people, focus on what drives employee satisfaction and demonstrate that employees are valued within the organization. 

There is also a trend away from private offices toward shared work spaces as companies strive to increase employee collaboration. 

7.  Non-healthcare Benefit Changes.  Attracting top-notch staff may require companies to provide a guaranteed benefit plan to eliminate the risk employees have faced with the standard defined contribution plans. 

8.  Tele-work.  Working from outside the office will continue to be more accepted and common.  Advances in technology will make it easier and less expensive to work from home, but people are unlikely to work exclusively from home.  They will need to come in on a regular basis to stay connected.  As described above, the open work environment will provide space when people come into the office; corporate office buildings are likely to be much smaller in the future.

9.  The Future of HR.  The outsourcing of HR services will continue and providers will expand their services, enabling a one-stop shop.  Although it does not seem probable in this day and age, a labor/skill shortage is predicted to occur over the next decade with the convergence of declining births, retiring baby boomers and expected business growth.  HR will be called upon to fill the labor gap by paying more attention to the older worker.  Providing so-called soft benefits (e.g., more time off and flexible schedules) along with traditional hard benefits (e.g., healthcare insurance and pension benefits) will be necessary to entice this group to continue working.  With corporate mergers and acquisitions likely to continue, another HR challenge will be to manage the people involved in corporate mergers.  Too often mergers fail because of the incompatibility of the two cultures.  HR can play a pivotal role in this process by helping each organization recognize and adjust to the working ways of other organizations.

These are just some of the predicted changes HR professionals need to be prepared for over the next decade.  Now is the time for HR to demonstrate its strategic value to the company by recognizing these trends; understanding the role people play in a company’s ability to solve problems, serve customers and drive change; and maximizing the potential of the company’s most important asset – its people.  

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