HR on a budget
Morale is low and so are funds. So how
do you keep your good staff happy without
giving them a payrise?
In an uncertain economic environment, the
pressure is on for HR managers and business
owners to deliver results on a smaller
budget. Companies are handing out
redundancies and slashing their budgets,
competitors are closing down and everyone is
bunkering down for the next 12-to-24 months
while company perks take the hit first.
Of course there’s a difference between the
perks employees structure their lives
around, like insurance, daycare and
overtime, and the more frivolous perks, like
croissants on Friday. However the boom
years—where employees were a scarce
commodity and employers were almost
compelled to make a significant financial
investment in employee retention
strategies—are over, and these
financial-based strategies are now not so
prevalent. The focus back then was to throw
an array of money and rewards at employees
so they would stay and play with the
organisation for a greater period of time.
Unfortunately, many employee benefits and
rewards did not correspond to higher
employee productivity or performance;
instead they eroded the bottom line.
As a result of these retention strategies,
many employees formed high expectations in
relation to rewards. Even in light of the
current economy, there are still high
expectations, particularly from Gen Y
employees experiencing a recession for the
first time. In the current market, employers
are being forced to cut through the clutter,
taking away many of these perks and employee
benefits to protect their profit and
ultimately ensure job security. This poses a
serious conundrum for HR managers and
employers, as employees still hold an
expectation that they will receive—and often
require—ongoing investment in their
professional development. So we still need
to attract, retain and develop employees
while ensuring our legal compliance
obligations are adhered to, but with a
considerably smaller budget than last year
and without the beer in the staff fridge.
The question now is how do we do this?
There are five key phases to the employment
lifecycle that require practical strategies
for HR on a shoestring; these are
attraction, development, retention,
compliance and separation. And today’s
economic situation will mean that most HR
practitioners will need to re-evaluate their
attraction, development and retention
strategies to ensure they are in line with
current business needs.
Attract
- Bring your recruitment process in-house
where possible. Outsourcing to recruitment
agencies can cut into your HR budget.
- Alternatively, approach your preferred
recruitment provider and try to negotiate
more favourable terms, discounted rates and
more flexible payment arrangements.
- Advertise on websites like Seek and your
company website as it is free, as opposed to
advertising in newspapers.
- Conduct assessment centres or group
interviews as opposed to one-on-one
interviews with candidates, which can be
time consuming and costly.
- Introduce an Employee Referral Program,
where you provide your existing employees
with a financial (or non-financial) rewards
for referring potential employees to the
company, as opposed to costly external
advertising. Your existing employees are
often the best ambassadors for your brand if
they are happy in their jobs and with your
organisation.
Develop
- Bring the training in-house so that
more people can benefit from the
investment and you will get more bang
for your buck.
- Continue with any leadership
development programs that you have in
place, just shift your focus to
emotional resilience. Our leaders need
to be trained and resilient to step up
and manage the change that is required
in the current market.
- Train your managers in ‘coaching
skills’ so that they can perform more
on-the-job coaching with employees.
- Purchase the HR tools—recruitment
and performance management systems and
processes—t works out significantly
cheaper in the long run than trying to
develop them yourself.
- Team build. Do group training as
opposed to investing in individual
training programs.
Retain
- Offer a range of non-financial
benefits in lieu of payrises and bonuses
to retain valuable employees such as
time off in lieu, additional annual
leave, access to in-house training and
development programs etc.
- Multi-skill employees by rotating
them around the organisation or training
them in other key areas of the business
such as sales. You cannot have too many
salespeople in the current market, and
employees will value the additional
skills and experience on their resume.
- Offer flexible work arrangements to
reduce your expenditure in salaries and
wages. Ask for volunteers to go part
time, or work five days and get paid for
four days.
- If you are faced with the risk of
making positions redundant, consider
some creative alternatives such as
requesting people take accrued long
service leave and annual leave or offer
periods of unpaid leave but leave their
job open.
- Reconsider employee incentive
schemes; are the KPIs realistic and
achievable? Consider either deferring
bonus payments or putting a freeze on
performance bonuses until business
performance improves.
- Consider ‘freezing’ salaries for a
period by advising employees that there
will be no budgeted pay increases for
2009.
Source:
Dynamic Business
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