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Businesses are urged to review their human capital strategies if they want to thrive in 2010The pressure of the 2009 recession highlighted the business relationship between people and profit. South Africa saw a wave of retrenchments across a number of industries in response to the economic downturn, in particular the motor, mining and manufacturing sectors.
Part of the downside to the downturn was the equation between job losses and a loss in productive capacity – a trend that not only impacts negatively on the local economy, but prolongs the country’s recovery long after the global economy begins to improve.
Because the success of a business is a direct result of the successful management of employees, South African businesses had to explore more creative and forward-thinking strategies to retain their staff and stay in business during the downturn.
Because salaries make up the majority of a company’s expenditure in most businesses, the first response to the economic instability was to adopt a strategy of short time or retrenchment – a short-term solution with potential long-term consequences.
In a departure from the norm, some companies have adopted strategies to retain their staff, maximise productivity within their staff complement and cement a long-term recovery strategy that will leave their business better than before the crisis.
While recruiting and retaining staff was not an option in some businesses, employers have begun to review their exit strategies for staff. The trend toward a transparent management strategy left the door open for employees leaving the company to do so amicably and with the option of re-employment when circumstances improve.
It is also a growing trend to offer contracts to employees who want to leave, thereby retaining skills while still making financial sense. By offering flexible employment contracts and leaving the door open to ex-employees, businesses are implementing a strategy that meets the current needs of the business as well as the staff.
Flexible staffing solutions have grown in popularity within businesses as another approach to ensuring that companies increase their efficiency within salary budget constraints. This method means that employers call on the services of flexi staff in accordance with peak and off-peak periods. This tactic often requires a partnership with staffing agencies – not regarded as an unnecessary expense, but rather as an integral part of their employment planning.
Flexible staffing allows companies to respond quickly and effectively to meet market demands. If the process is managed appropriately, a business can maintain the supply of its product or service and some level of certainty when it comes to costs.
Incorporating staffing agencies in the plan to overcome the downturn allows for more efficient human capital management, and therefore allowing companies to focus on their core business.
Employers also have been encouraged to consider the effect on their business by retrenching key talent. The sentiment is to retain skilled talent based on long-term value as opposed to the current bottom line.
The cost and time involved to retrain and re-employ key talent could mean the difference between a company’s success or not.
This approach has resulted in employers looking after quality people, supporting and retaining their key talent.
Part of the process includes increasing their motivational campaigns. Cutbacks have meant that staff are already stretched; in response, companies are offering incentives to their remaining staff not always in terms of money, but in acknowledgement, time off and other cost-effective wellness programmes.
Talent development is another focus for businesses wanting to cement long-term sustainability in the marketplace. As with any good investment, it is best to view it in the long term.
By developing the talent within an organisation through in-house training, cost-effective skills transfer and further education assistance, employees are able to assess their own contribution and increase their offering to the success of a business.
The overwhelming bottom line is that corporate South Africa cannot afford to be complacent. Top recruitment agencies are encouraging companies to start recruiting scarce skills now because businesses run the risk of encountering an internal skills crisis.
The priority is to source the staff that have the skills to take a business from where it is now to a much more profitable and productive place. Maximising the trend among expats to return to South Africa, sectors that have suffered an enormous skills shortage in the past such as engineering, mining, and construction, have the opportunity to reintroduce skills that they lack.
Smart companies will defrost the recruitment freeze and actively seek out scarce skills as part of their medium- to long-term business objectives.
A survey released by Careers24 in conjunction with BlueRiverStone Research concluded that thus far, local employers are failing to invest sufficiently in skills, close the salary gender bias, improve performance reviews, and tap into employee career aspirations as far as possible.
Overall, human capital is suffering because employers are unable or unwilling to invest in the places where it counts most.
Companies will have to maximise their creativity and be proactive in attracting and retaining the right people.
The start of a new year always brings a host of promises with it. With South Africa on the verge of full integration into the global market, businesses are urged to review their current human capital management strategies and make improvements where necessary.
We have to be ready, and ready means that we have maximised the business relationship between people and profit so that we can all truly make the most of 2010 and go from recession to rejuvenation.
Taryn Springhall
