HRM - CHALLENGES - GLOBAL CONTEXT

Cost reduction , Hiring  and Retaining talent

Figure - SoftCore

According to Stephen Miller (2018), “Forward-thinking employers are treating their rewards strategies as integral to their staffing and performance management efforts—and viewing their rewards as an investment in workers' productivity and engagement—especially as organizations face greater competition for talent”.

Finding a balance between operational costs and performance is another serious challenge that organizations are facing today. Majority of the expenses are underline over the “people”, to provide,• Health-care benefits, • Training and development ,• Hiring and retention. These expenses were found to be costs to employers and it could also be identified as the benefits to the employees. 

According to a very recent research done by Stephen Miller (2018), for SHRM, employee health care benefit costs are the significant figure as 72% (i.e. two-third) of the organizations have increased their costs over full time employees. In current complex and competitive working environment, the health care issues among employees are high. Companies even have to think about benefits to the families (spouse/ domestic partner and children) as majority of the employees left many hours out the home due to heavy workloads/lean staff, extended working hours, etc. Companies also do spend on other health benefits. Ex., wellness benefits, parental leave, retirement savings and advice, and health screening.

Employees are often like to see they are beneficial to the organization. Frequent training and development strategies empower employees in different aspects over organizational operations. It opens the doors in critical thinking which is much beneficial from the organizations’ perspective. Training gives opportunity to have discussions which reveals employees’ true ideas about shifting to other departments, and engaging in new job roles. That would be helpful for the management to re-organize the workers with suitable rewards and recognition in different work stations. The Stephen Miller (2018), says that if an organization could do the correct training and development at the correct time, the such costs could be an enhancing employee value without increasing their pay.

Retention and hiring of talent is still challenging. The permanent employees assume that their outstanding performances are not being properly rewarded while with higher employer expectations. This problem arises specially due to adoption more of temporary workers to defeat high employee turnover. The controversy between non permanent and traditional flexible staff has different issues. Less engaged staff generally shows lower organizational loyalty, poor customer service, less attention to quality, little commitment to the company and high turnover. These are known to be threats than it’s being issues. Hence costs management has become critical, as it directly impact the mind set of employees. It could also affect employees be de-motivated (Regis, 2008).

As a cost reduction technique most of the companies hire non permanent, temporary workers. The other way round, non permanent temporary staffs are paid lower wages and sometimes they are not eligible to enjoy other rewards. As a result Human Resource managers have to pay higher incentives, initiate empowering schemes, continuous training and development programs, to retain them. According to Stephen Miller (2018), 41% of the costs have been allocated for recruitment and attraction of new talent. 28% of the costs spent on retention/turnover management. 

The world leading IBM Company has initialized “Work Force Management Initiative (WMI) to optimize the workforce and integrate the supply chain for human resource and talent management (Boudreau, 2010). The investment on the project was more than US$ 100Mn. IBM’s WMI acknowledges that workforce optimization required linkages of key disciplines in, Resource management, Talent and mobility, Learning, Supplier or vendor management.

Costs in Human Resource Management (HRM) are hard to limit or reduce. Initiate productivity increasing techniques, managing the size of work force/ managing excess/ downsizing, managing pay and benefits and outsourcing is some of the solutions of overcoming high costs in HRM today.

References:

1. Boudreau, J. (2010). IBM's Global Talent Management Strategy. Alexandria, VA 22314, USA: SHRM Academic Initiatives, pp.13-14.
2. Regis, R. (2008). Strategic Human Resource Management and Development. New Delhi: Excel Books, p.34.
3. Scullion, H. and Collings, D. (2011). Global Talent Management - Global HRM. New York: Routledge, pp.24-25.
4. Stephen Miller (2018). How Total Rewards Can Drive Performance Management Success. Keeping a motivated workforce requires meaningful rewards and career opportunities. [online] Available at: https://www.shrm.org/ResourcesAndTools/hr-topics/benefits/Pages/total-rewards-can-drive-performance-management.aspx [Accessed 4 Jul. 2018].
5. Stephen Miller (2018). Employers Beef Up Benefits to Keep Talent. SHRM benefits survey tracks growth of popular perks. [online] Available at: https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/employers-beef-up-benefits-2018.aspx [Accessed 4 Jul. 2018].