Opinion

Economic recovery may be on the horizon but HR cannot afford to be complacent

Barbara Spitzer , 28 May 2010

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The recession has had significant repercussions on organisations across the globe and as the economy begins to show signs of recovery, the role of the human resources department has never been so important.

As we begin to see an upturn in the jobs market, HR departments cannot be complacent as there are multiple, and at first glance, potentially conflicting priorities for companies emerging out of recession. HR professionals have a vital role to play in realising necessary cost efficiencies and the raising of performance and productivity.

We also have to maintain employee engagement and retain key talent.

Further reading

During troubled times there is a temptation for organisations to call HR departments to cut headcount in order to cut payroll costs. However HR leads should remind their management teams that reactive redundancies issued during the depths of the recession only provide a short-term fix and leave organisations exposed to future problems. With the global economy turning around slowly and opportunities beginning to return to the talent pool, forward thinking organisations will have already geared up for the upturn by implementing innovative business practices and cultural change in order to differentiate themselves in a tougher market place and retain personnel. Despite some clients continuing to hire during the recession they still face staff shortages as they reach retirement age.

Indeed, organisations seeking to maximise their operational capabilities always need to factor in the people element, in order to match the capability of the workforce with requirements of the business.  A key way in which HR departments can boost capability is through the implementation of human capital measurement strategies. These can enable organisations to understand and optimise the relationships between investment strategies, people management and business performance, to fully meet the needs of the business. Companies are increasingly seeking ways to implement integrated talent management solutions (through ERP or SaaS) to not only drive greater process efficiency but to create a vastly improved manager and employee experience around critical talent processes.

The HR function itself should also be re-evaluated on an ongoing basis in order to ensure it is running as efficiently and effectively as possible - it is not the arduous task most people think and it is vital if the role of HR is to grow and evolve. Performance management programmes can be put in place or refreshed to ensure that all employees are delivering to their full potential and this in turn can help create a culture that is flexible and responsive to customer needs and focused on improvement. Ensuring that you are structured for success and that your operating model is as effective as possible in delivering business priorities will also deliver significant cost and productivity benefits. Indeed, Capgemini has embarked on an HR transformation that includes new competency management frameworks, learning maps and career path guidelines.

As the economic climate picks up in many sectors, HR departments must not be complacent about the depth of the current talent pools. It may feel premature to ‘look through' the current green shoots to the longer term. However, companies can risk losing their competitive advantage through short-sightedness. Instead we need to implement innovative working practices such as smart working strategies as these optimise the work environment, maximise employee and business cost benefits and enhance productivity. In addition, the new generation of workers expect to have access to the vast array of emerging collaboration and networking tools. They will naturally gravitate to these approaches to share knowledge, locate expertise and stay connected.

Reward strategies help drive a high performance culture, while a strong employer brand can help attract talent as well as increase retention in a highly competitive market. Indeed, employers that are keen to develop a competitive edge must pay attention to employee expectations, take them seriously and do something about it. Globalisation has intensified competition while, at the same time, employee expectations are rising.

Only the best companies with strong HR departments are meeting this challenge head on and strengthening the existing talent pool in order to fully optimise business performance both now and for the future. We have clients that have refreshed their HR strategy in order to align it with the business's five-year strategy. As well as retaining staff, identifying and developing the next generation of business leaders is essential to do this if these organisations are to remain competitive in the future. The war for talent is back on the boardroom agenda and it matters because services and products are only as good as the people delivering them.

Organisations of all sizes and sectors have faced unprecedented challenges since Lehman Brothers collapsed back in September 2008 and it has been especially hard for the HR department and management team to ensure that employees are aligned to an ever-changing business strategy. However, in order to survive an unpredictable economic climate we must not forget that organisations are the sum of their people and, during the difficult times, the effectiveness of HR strategies can make the difference between success and failure.  

Barbara Spitzer is head of HR Consulting for Capgemini's Global Network

 

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