The Australian Human Resources Institute’s (AHRI) White Paper (2010): [email protected]/2020 looks at the challenges that HRM faces in the next decade. The AHRI paper also looks at how the Australian businesses and the government’s responded to the global financial crisis and the steps they have taken in responding to the crisis and also how they are equipping themselves to ride the next crisis. The four people management challenges that are likely to have an impact on people management practices over the next 5 to 10 year are as follows: 1. Managing talent 2. Improving leadership development 3.
Managing demographics e. g. Gen X and Gen Y 4. Managing globalisation In understanding how to meet those challenges, we need to understand the role of management and the impact human resources management (HRM) has on today’s leading businesses. In short, management is leading and controlling human and other resources to achieve an organization’s interests, goals and objectives. Human resources management is to implement those interests, goals and objectives in the workplace. There are many factors that influence HRM’s function: the behavioral factor; the resource factor; and the political factor.
Many businesses have come to realize that HRM is one of the keys to their profitability and quality of their products produced for their customers. The world is changing rapidly and businesses need to keep up with the changing pace to stay ahead of the game. Leading businesses today need to be proactive in their strategic approach in the marketplace. Hence, HRM are being included in their strategy meetings. There is increasing recognition of the relationship between HRM functions and organizational strategy which has led to the development of strategic HRM (De Cieri et al, 2008, p6).
HRM can be a valuable source of information about the company’s resources, i. e. their employee’s behavior, skill sets and attitudes that is required for the organization to achieve its strategic plan. In turn, HRM will have their strategic plan in place. For example, selecting and recruiting the right employee for the right job, training and developing employees’ skills, mentoring employees, conducting performance reviews. During the global financial crisis there was a major focus on retaining talent. In an online survey conducted by the AHRI of its members nd focus group interviews with about 50 senior HR practitioners from October 2008 and July 2009, found 70% used performance reviews to retain their best employees. Leading companies did their best to not lay people off, it was their last resort. In determining which employees to lay off, they selectively targeted people with low values and low performance. The targeted people that were retained were the ones well trained; resilience and aptitude for continuous change; and good communicators/networkers /innovators. (AHRI, White Paper, p14).
Baker & Mckenzie, Hong Kong, in handling the global financial crisis, they had pay freezes in place for all the employees across-the-board. They cut down on all expenditures that where non-essential to the business, i. e. the company owned 2 pleasure cruises for the employees to use, they sold one. Another, the company used to have an extensive budget for a mid-year end party and Christmas party; they cut the mid-year party to just in-house drinks and downsized the Christmas party. They did their best to retain its most talented employees.
However, it still wasn’t enough and there were a few redundancies. In selecting which employees were made redundant, performance reviews were looked at of each employee, their attitude towards the tasks given to them, whether or not they met their billable hours recorded, participation in internal committees (in other words their commitment to the company). (Personal experience) Companies invest a lot of money on on-the-job training and developing their employees’ skills, offering incentives and rewards to increase productivity and achieve long-term financial performance.
Companies today require leaders that are flexible, understand the demographics of their employees, employees’ behavior and being able to tap into their knowledge and skills. They also need to understand what will motivate their staff to perform to their best of their ability. As the paper identifies that the requirement for success leading up to 2020 will be the ability of leadership to manage performance, mentoring, communication and feedback, evaluation and reward determination. Again, looking at Baker & McKenzie, there were several on-site training programmes in place for all level of staff.
There were also on-site and off-site workshops created by HRM for leadership development. The paper points out that ten years from now, leadership in business and government will have passed almost completely from the baby boomer generation to Gen X and Gen Y. From the research, 2020 will see the Gen X and Gen Y being the leaders. Gen Y have very different values and views on what they expect from their employers. Google is a good example of how they have taken on board the Gen X’s and Gen Y’s views and attitude towards work environment and work-life balance and flexible working hours.
Australian companies today, regardless of their size, have employees from all around the world working for them. There is much need to understand the cultural differences in today’s workforce. Many Australian companies have offices all around the world, e. g. Hong Kong, Singapore, US and Europe. Take Talent2, a recruitment agency, whose headquarters is in Sydney, Australia. They have an office in Hong Kong. They selected a few senior management employees and relocated them and their families to Hong Kong. These employees were selected on the basis that they were aware of the cultural and business norms of the Hong Kong.
They were also trained in language skills. The company spent time and money in bringing employees from Australia to train and develop the local employees to better understand the company’s strategy so that the strategy was consistent across all its offices worldwide. (Personal experience). The business world is growing rapidly. Organizations are structured and managed very differently from only a decade ago. Organizations have begun to realize that it is the people in their workplace are what are going to give them that competitive edge over their competitors.
Jack Welch, CEO of GE Corporation over a decade ago observed: “If you don’t have a competitive advantage, don’t compete … people are the competitive advantage” References: De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright, 2008, Human Resources Management in Australia (3rd Edition), Strategy/People/Performance, pp4-84 Australian Human Resources Institute, 2010, White Paper, [email protected]/2020, The Future of Work and the Changing Workplace: Challenges and Issues for Australian HR Practitioners