If you are still reading textbooks about HR written before the global recession, you could be seriously out of touch with the appropriateness of your strategies. The best scenario we have to look forward to is what IMF chief Christine Lagarde describes as the Lost Decade. Despite huge uncertainty regarding the specifics, we can pretty much count on several more years of tough times.
Even though our part of the world is less affected by the recession than most developed countries, we cannot hope to turn around and grow meaningfully for quite some while. So, have you planned how this will affect the way we manage our human capital?
For a start, we can debunk some of the assumptions which created the wisdom from the pre-2008 boom years. All that talk about Generation X and Y being temporary sojourners at our workplaces as they flit from employer to employer is now clichéd and mostly plain wrong. Metlife’s 10th Annual Study of Employee benefits Trends revealed that 55% of Generation X and 60% of Generation Y workers claim that they are counting on EB for financial protection. The study shows a decreased appetite for risk, as 81% of Y staff now want guarantees at the expense of good returns:
64% of Gen Y are “very concerned” about liquidating their debt
More than 50% of under-30s are “very concerned” about running out of money after retirement, compared to just 30% of them a decade ago.
Reinforcing these findings, a Towers Watson Survey reflected that the retirement benefits component of a prospective employer’s offer was important to 63% of under-40s, compared to only 28% just three years ago.
And here we were just recently gearing ourselves in HR to support a horde of migrant experts, and chasing the goal of flexibility at the cost of stability. This is a diametric shift, and I wonder if we have really grasped its consequences for our profession. When the bubble burst and banks collapsed, governments crumbled, people occupied Wall Street and trillions were lost, the employment scenario was jolted. Job security is now probably the single strongest attraction & retention factor, and one which is very difficult for HR to deliver upon, or to offer as a competitive incentive.
So, it’s a buyer’s market for labour (sort of), but how do we as HR professionals deal with that shift? Do we get lazy, because people have few alternatives? Do we still obsess with stealing and spoiling a handful of stars at the expense of the B players?
Some of the interesting work being done by smart HR people includes optimizing the fact that we now have many Baby Boomers who want/have to stay longer in the workforce. But, our strategy must be much more sophisticated than just extending retirement age. Can we create a way for experienced people in late career to continue to contribute, while not blocking career advancement for tomorrow’s leadership? Maybe moving out of management roles into advisory posts, with more flexible hours?
What about young mothers who might have previously resigned for a few years, who now want to work but on a different basis? We bend over backwards to respond to client needs with product innovation, but are we as responsive to evolving employment needs? None of the HR basics go away, but our complexity sure is increasing.
One further danger. A healthy economy normally means healthy turnover. People who are not happy would normally have left and gone elsewhere – they take their unhappiness with them, and are replaced by those who are keen and positive. In a recession, people hang on, but it doesn’t mean they are engaged and productive. Reluctant stayers probably don’t vocalize their dissatisfaction, so what do they do with it?
Global recruitment site Monster.com asked visitors to their site “Are national or global economic troubles causing you to consider a complete career change?” A startling 55% of respondents answered Yes. But are we still assuming that all our accountants want to be senior accountants, and designing our HR strategies accordingly? How does your ERP system’s workforce planning module cope with all of this?
In some ways, the boom years were almost simpler. Yes, the war on talent made us all shake our heads and complain at what everyone was demanding, and what the competitors were doing, but that was yesteryear. The world has changed, but not yet into a steady state, so it will take all our skill to read and respond to the dynamics you face in your region, country, industry and your own organisation.
Who said that change is as good as a holiday?
About the author
Gary Taylor has worked in HR for 30 years, in National Mutual of Australasia and Unilever, then as HR director at South Africa's largest health insurer Medscheme for 14 years, followed by three years at Wits University. Several years ago, he was appointed to start up HR for a new University in Saudi Arabia, where he is now director of the policy office