At least in a technical sense, the economic recession has ended in Singapore and most of Asia. While there are still some fears of a sudden return to those darker times, most economists are predicting a slow and gradual recovery in 2010.
For such predictions to come true, businesses will have to play their cards very carefully: too much investment could leave them vulnerable to a sudden fallback in demand. But at the same time, not enough forward planning could leave them far behind their competition if the economy finds a new gear.
HR departments will be at the forefront of this dilemma. As businesses search for sustainable solutions to the new economic reality, they’ll have to carefully manage the expectations of their people – while also keeping that talent on side and developing.
The key areas of recruitment, retention, development and leadership all play a part and it is now even more critical for HR leaders to be involved at every level. The region’s best HR practitioners know this only too well, and are already implementing their post-recession strategies.
Developing leaders, and business
Leadership development is likely to be a key factor in this new, more competitive landscape. Alan May, Vice President of HR and Administration at Boeing’s headquarters in the US, says this is how the company can differentiate itself from competitors over the long term. “In difficult economic times, it’s critical that we maintain a very aggressive leadership programme for our managers,” he tells HRM. “We are redoubling our efforts in areas of succession planning and enhancing targeted development plans for our high potential leaders.”
Identifying these potentials is another key priority for the aircraft manufacturer. It is working with senior managers to find and bring to life those critical skills required in a more business-friendly environment. May says HR naturally plays an important role here. “This activity results in a variety of HR initiatives to attract, develop and retain pivotal skills that will be deployed to grow our business outside of our current footprint.”
Leadership development is also top of the people agenda at KPMG in Singapore. As Stephen Tjoa, Executive Director, HR, tells HRM, the company has a number of initiatives already in play. These include a new emerging leaders’ programme, enhanced learning and development curriculum, global assignment opportunities, and an assessment centre to prepare KPMG’s next generation of managers.
The assessment centre will introduce real-life case studies, experiential learning and boardroom simulations to new and senior managers. The quality of solutions and interactions will then be assessed by senior members of the firm’s leadership before recommendations are made on their promotions, Tjoa said.
KPMG is also looking at keeping its more junior staff engaged with the firm, Tjoa says, noting that the war for talent is likely to reemerge with the recovering economy. He says KPMG will need to focus on staff retention; and develop innovative strategies to enhance these top talents.
It’s a similar story playing out at MediaCorp in Singapore. This year, the company will be focusing on the capability enhancements for all its people; but with a particular eye for those with management and leadership potential. Selected staff will undergo a series of training programmes to upgrade their people management skills.
Meanwhile, Chan Yit Foon, Executive Vice President, HR, MediaCorp, says non-managers will not have to go without. She says the company will continue to leverage on the Skills Programme for Upgrading and Resilience initiatives that the Singapore Government put in place last year.
“We hope that the skills and knowledge gained will help our employees not just to stay relevant, but be masters of their areas of expertise in the ever-changing media landscape,” she said. “We are certain that such training programs will help drive a high-performance workplace and achieve greater business results.”
Compensating creatively
The economic recovery is also likely to throw up several challenges for compensation experts. Coming off the back of last year, when salaries remained stagnant or even went backwards in some cases, HR can expect plenty of expectation pressure from employees in 2010. A lot of hard work and loyalty will now demand to be rewarded financially.
That’s going to make life tough for many in HR. While economic recovery has certainly begun, those gains are yet to be felt on many corporate bottom lines. And with the risk of a “double-dip” return to tougher economic times still present, businesses will want to avoid over committing themselves on staff salaries.
The answer, academics and HR practitioners say, is to find creative solutions to employee expectations. They say businesses need to also ensure they get positive productivity improvements in line with any pay rises offered this year.
That’s certainly the plan at Boeing. May says HR is partnering with other business areas to improve productivity through enhanced employee engagement. “The company is working collaboratively with both its finance group and management teams to find alternative means to fund the same level of employee benefits that we currently have,” he said. “This is intended to allow Boeing to invest in growth opportunities and maintain our financial strength, while preserving highly-valued employee benefits.”
He says it’s important not to get in to a habit of slashing benefits and then reinstating them further down the track. “We do see some organisations going back and forth between eliminating critical benefits and quickly implementing programs that haven’t been fully discussed and presented,” he said. “Our goal, instead, is to keep a continuous focus on driving productivity and growth – which, in the end, will result in sustainable business performance.”
KPMG was one such company that cut compensation packages at the deepest points of the economic downturn. But it has worked quickly to restore them now that times are brighter. Tjoa says salaries were cut in February last year but were restored at the start of this year. It is also fulfilling a promise to back-pay staff for the entire period of reduced earnings.
“This is our way of thanking our employees especially after having made sacrifices and for standing by the firm as we faced these challenges together,” Tjoa said. “This gesture is simply delivering on the promises we made where we said we would review the situation closely and to make the necessary adjustments to our measures if the outlook improved.”
On top of this, the firm has created a generous package of retail and lifestyle rewards in lieu of additional pay hikes. All employees received the generous “bonus” in December last year.
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Recovery challenges
The recession brought about significant challenges for HR, but just because it is now over does not mean things are going to get easier. Building a sustainable economic recovery for both individual business and the economy as a whole will create a whole new set of challenges. In particular, HR will need to resolve:
+ Pay expectations and demands
+ Still constrained budgets
+ A resurgent war for talent
+ Increased job-hopping
+ A potentially fast-changing economy
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Case study
Carlson’s way forward
As the global financial crisis faded, HR at Carlson Hotels identified the key driver of future staff retention and attraction to be training and development. It therefore began working on a proactive talent engagement initiative.
Linda Scully, HR Director, Asia Pacific, Carlson Hotels Worldwide, says the resultant retention strategy is its silver bullet to defending its staff from the talent wars that are set to re-emerge in the hospitality industry.
She says the chief aim is to nurture and grow the hotel group’s people; identifying what makes them tick and stay motivated. “The Gen Y’s are an interesting lot who look beyond monetary rewards alone for job fulfillment,” she says. “As a result, we look at the 77 countries we operate in and provide our staff with cross-cultural exposure, assigning them to be a part of the task force teams at hotel pre-openings in different countries.”
The hotel is also investing in employee development, through its established Carlson Learning Network. This a learning management system that creates individual learning tracks for each staff member and position. Scully says it boasts an online training library through the American Hotel and Lodging Association.
The hotel group is also looking at succession planning initiatives as it implements its recovery strategy. Scully says the performance appraisal system has been tweaked to not just judge performance but also further plan employee development. The process involves careful one-on-one meetings between each staff member and their supervisor. “We let them set their objectives and in the time frame they want to achieve it,” says Scully.
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