Internal change, productivity and people costs biggest concerns for employers

by 06 May 2009

One in every five organisations plans to reduce staff numbers by the end of 2009, with employers citing their biggest challenges over the next 12 months as managing internal change (20 per cent), people and productivity (19 per cent) and controlling people costs (15 per cent).

A recent Randstad report revealed a stark shift in the employment market, as the struggle for talent and plentiful job vacancies experienced in 2008 gives way to restructures, redundancies and cost-cutting.

The number of organisations looking to reduce staff numbers has almost trebled since 2008 and the number of organisations looking to increase their headcount in 2009 has significantly decreased from 42 per cent in 2008 to only 23 per cent this year, said Randstad CEO Debra Loveridge.

“While this has resulted in a trough in full-time labour force participation, there has been a peak in part-time, temporary and contract roles, as organisations still need manpower, but cannot commit to permanent headcount,” said Loveridge.

Despite difficult decisions employers are facing over reducing costs, 78 per cent of employees believed they would receive a pay rise in the next 12 months, and more than a third (39 per cent) also expected a bonus.

“While it is good to be optimistic, organisations need to be honest, open and realistic when it comes to employee remuneration,” said Loveridge.

“The fact is, employers simply cannot afford to pay the salaries enjoyed in 2008,” she said, as the report found that 21 per cent of employers reported that non-competitive salaries contribute to their inability to secure the right talent.

When it comes to successful attraction strategies, employers cited company reputation (42 per cent), culture and values (18 per cent) and career paths (8 per cent) as key to securing the right talent. These were also reported as the top three components of a strong employer brand (25 per cent, 23 per cent and 18 per cent respectively).

A further 74 per cent of organisations believed employer brand played a pivotal role in attracting and retaining staff – a jump of 10 percentage points from last year.

“These figures suggest the world of work in 2009 is about employers being focused inwards for outward growth,” said Loveridge.

“Rather than purely using employer branding as a way of attracting and retaining staff – as has been the case in previous years – employer branding is now being used as a tool for managing internal change and to reaffirm confidence in uncertain times.”

When it comes to attracting talent the traditional methods continue to dominate, with preference given to online job boards (71 per cent), print advertising (60 per cent) and headhunting (45 per cent).

Loveridge said employers were also not taking any chances with their hiring decisions, with 44 per cent using psychometric and personality testing prior to making a hire, and 25 per cent using assessment centres to make sure the candidate is the right fit for the role before starting.

“This caution may be largely due to the fact that 25 per cent of organisations have suffered an incident as a result of not conducting effective pre-employment checks,” she said.

When it is time to part ways, almost half (45 per cent) of employers say they conduct exit interviews, yet 50 per cent of respondents were unsure whether any positive changes are made as a result.

With redundancies a reality in the current market, Loveridge said it is a positive sign that 53 per cent of organisations are offering outplacement services to help employees through the career transition process and into meaningful alternative work.

“While the world of work is changing, the most resilient organisations are those that put people first. Before taking drastic measures, employers should think laterally and long term about their human resources management,” she said.


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