. Using PESTLE as suitable frame work for analysis, evaluate a range of strategic HRM options by HomesFurnitureltd

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									2.0 Strategic Human Resource Management (SHRM) Options

In this changing economy with recession the Human Resource Management

(HRM) is in the spotlight as never before. It is great opportunity for HR

managers not just to support the organization, not just aspire to be respected

business partner but this is the time when HR Manager has the opportunity to

lead and to help run the organization in these demanding times. As in

Anonymous HR FOCUS (2009) suggested that if organization need to

effective it is time to Attracting, developing, and retaining talent involve

understanding what you have and adding what you need. As Karmar (2008)

pp1 “Strategic human resource management is one of the ways organizations

can attempt to achieve strategic fit with their market environment.”

In this turbulent time some Strategic Human Resource Management (SHRM)

options organizations can adopt to minimize the risks are as below.

      Recruitment

      Induction

      Retention

      Training
2.1 Recruitment

To meet the current (recession time) and future (after the recession) needs of

the organization the starting point is recruitment. There is no denying the fact

that recession has bite and HR is feeling the pain when it comes to

recruitment budgets. During recession period normally organizations behaved

typical with reactionary approach with layoffs, salary freezes, redundancies

and low recruitment. As results of survey done by Personnel today through

Xpert HR mentioned in Williams (September 2009) show survey of 105

employers - covering a combined workforce of almost 580,000 people -

showed that three-quarters (74%) now had fewer vacancies, while around six

in 10 (56%) had introduced recruitment freezes . There is a need to develop a

long term workforce strategy aligned with organization strategy to behave

strategically. As Brazeel (2009) pp 2 “cost cutting is an unavoidable necessity

in the midst of a recession however, retaining, recruiting and strengthening

top talent are all requirement to successfully outlasting a recession.”

During recession period the recruitment process of most of the organization

was slow but as signs are coming that UK economy is recovering it is

important to identify the human capital requirements and to make strategy

how to fulfil these requirement in coming time. With the signs of recovery

organizations need to look beyond the current financial crises and identify the

competencies they will need in the future. HR and corporate leader need to

work together to identify their needs for future before doing any work layoffs.

As Williams (2009) mentioned pp 28 "It's clear HR is looking ahead rather

than being reactive. There's a lot more confidence. A year ago, it was about
survival or maintaining some profitability; now we've moved on to talking

about recovery”. Organizations need strategy for the future to have right

worker on the right time and in the right place. It is not just the time to cut the

cost and just retain the right people it is time to do forward thinking and recruit

right people. As Brazeel (2009) pp 2 “Forward thinking businesses understand

that the time to recruit for the future is today. The competition for top talent is

still very much alive and well.”

In this competitive environment where every one is after skilled and

knowledge able worker the competition for top talent, knowledge worker is

alive. It is time to re connect with candidates and take ownership of employer

brand. However it is not about attracting every one to work for the

organization. Due to recession unemployment is high so to be successful in

finding suitable candidate it is important to give clear message. Clear

message is not possible until unless proper job analysis is not done so to do

the recruitment for present and future needs and to find the most suitable

person for the job is to start with job analysis what organization. And the clear

and straight forward message to the candidate is the job description process

about pay, hours, what the candidate need to do infect what organization want

from him and what organization can give candidate in return. At this time

when unemployment is high so clear message is important to attract the best

person. From the last 19 months the recruitment from all organizations is

slow. Due to the technological changes there are lot of new options and ways

to attract the people. Internet, social media, ads, smart phone is now common

with internet on it ads on the internet within web pages even advertising is
coming in online computer games and on career sites. As in Personneltoday

(03 November 09) during recession the 20th annual IRS graduate recruitment

survey shows that online recruitment has become more important than ever

as a tool to help employers reach top talent. Using an organization website or

external job sites to attract and recruit peoples is fast and cost saving at this

time of recession. A lot of organizations are using this method.

Through E-Recruitment organizations can cut the cost in recession time can

save agency fees, advertising fee, less paper used, save on postage cost and

most of the information is available on website and no need of too much

administrative staff to handle the recruitment process. Through E-recruitment

the process is smooth and transparent. The process of recruitment will be

prompt vacancies can be posted and reviewed instantly a lot of time can be

saved through E-Recruitment. Data produced through E-Recruitment will be

accurate and will be available instantly and the process of E-Recruitment is

constant across an organization all treated same regardless from where they

have applied. Through this can achieve equal opportunity easily. So the

organization needs to think smartly what way of advertisement for the job

should use so that the messages deliver to best candidate.

Organization need to reduce cost while recruiting to meet the need of the

organization. New graduate pool may offer a solution. To meet the long term

objectives of the staffing needs with cost saving because due to high

unemployment new graduates are available in the market organization can

recruit them on low starting salaries compared to experienced workers and
can develop them on long term basis and make them their competitive


In this recession time to fill the staffing need of the organization through

outsourcing, employee leasing, flexible and part time contracts, working from

home, temporaries workers. Through temporary workers organization can cut

the cost because no permanent contract, no liability on organization like

holiday pays, maternity or paternity leaves sick pays, bonuses and pensions.

Even the pay rate is same as temporary and permanent worker still

organization can save on other benefits like as Gray, 2002; TUC, 2001 cited

in Stanworth & Druker (2006) pp 176 “However, the figures exclude fringe

benefits such as pension schemes, bonuses, and company sick pay that are

rarely, if ever, paid to agency workers.” If temporary worker is not matching

the requirement of the organization can say goodbye easily no need to go for

redundancy procedures and costs. This not only cost saving it is a best way to

find the talent As Jones (2009) pp 19 " Many of the contractors and temporary

workers will be signed to fulltime employment agreements. It's a great way to

find talent, determine if there is a match and build a winning team.

At this competitive environment and tough time for organization temporary

worker can be used by organization to drive innovation. This is uncertain time

recession is still in the economy organization doesn’t know what will happen

in future so organizations can hire temporary workers on flexible terms. In

uncertain times because in lot of organization don’t need a permanent

executive so organization can hire temporary executive. projects As OECD,
2001 cited in Burgess & Connell(2006) pp 131 “Positive outcomes arising

from temporary employment are that: it can improve job matching within the

labour market, reduce job search time and expenses, and offer a transition to

permanent employment” There is some critiques on the temporary workers

about their motivation, loyalty, commitment and keeping the competitive

source with in the organization but still in recession and in changing time

temporary worker is a SHRM option for organizations to survive.

Out sourcing is the practice of subcontracting a business process to a third

party provider and out sourcing seen as an obvious cost cutting strategy. In

this recession time out sourcing is another way to meet the staffing needs with

cost cutting strategy in mind because organizations are looking the ways to

survive. Due to cost cutting interest increased in UK as Hanson (2009)

mentioned that National Outsourcing Association (NOA) reported in its last

quarterly index, published in July, that the UK outsourcing market grew eight

per cent last year. Organization need to use Out sourcing carefully to avoid its

negative impacts it is necessary to align all out sourcing activities according to

firm over all strategy. As Scott-Jackson et al (2005) cited by Reilly & Williams

(2006) pp 106 “you need to be careful that the delivery of HR services by your

outsourced supplier does not get disconnected from your internal HR strategy

and direction”

2.2 Induction

Most of the organizations have some type of induction programme for their

new people. Normally in induction new employee told about organization
goals, policies, culture, markets, clients, and reward system. Sort of reception

ceremony for the new employee and then team leader take care about the

new employee by showing his workplace and handing him some documents.

The induction is the first step toward commitment of employee if it not done

properly the staff turnover will be greater than otherwise. As Fowler (1996)

mentioned in Armstrong (2006) pp 472 “employees are far more likely to

resign during their first months after joining the organization”. There is a need

for formal and full induction programme in the recession time because

organization don’t afford that they spend time and money on recruiting people

and they leave due to not proper induction. Smith (2004) gives some

suggestions for proper induction programme. According to him firm formal

induction should be as soon as possible. Team leader should introduce new

comers personally to other team members. All team members should email

newcomer to welcome and tell what they do and what they are doing in future,

Give necessary training to new comer. Answer all administrative type of

questions to newcomer, hold the team meeting within two to three days tell

the newcomer about his assignment and contribution, involve newcomers in

work as early as possible give them some task to complete so that confidence

start building in them, invest some time and get some feedback from them.

Induction is a source to build and clarifying the psychological contract.

And as in recession every one is taking about cost cutting induction is a way

to cut the cost of recruitment for the replacement if newcomer left due to bad

induction, save the cost of training on replacement, save agency fee and

advertisement fee and can become a source of revenue a good induction can
increase commitment in the employee and a committed employee will deliver

quality and quality bring customers and revenue to organization and that’s

what organizations are looking in recession time.

2.3 Retention

Employee retention refers to the preservation of the workforce of the

organization. Nowadays, retaining a good performer for a decade is a mega

accomplishment. Employee retention especially of your best talent is a key.

The employee is given a variety of incentives and in return employee gives

their commitment and loyalty to the organization. Employee retention is one of

the most important outcomes of all the HR activity in the organization. This is

so because of the following reasons

All organizations are looking for a sustainable competitive advantage. The

most difficult to duplicate competitive advantage is its human capital.

Therefore to maintain that success it is integral to have the creative minds

behind that success.

UK economy is based on service industry as mentioned before 70% of GDP is

form service sector. In service sector customer retention is based on

employee retention. In most cases an employee leaving connect to all his

customers leaving as well.

In most case organizational knowledge is not explicitly present. Rather it is

apart of the employee’s experience as well. When that employee leaves the
organization a lot of important tacit knowledge is lost. In the era of knowledge

workers this becomes even more a critical issue.

Due to recession organizations need top performers to stay with them to

innovate and provide high quality of services to create competitive advantage.

A company with a high turnover has to bear additional costs to find a

replacement for that position.

During recession organization think that people will not leave because of fair

of not finding another job but this is not true high performer of the

organizations the source of their competitive advantage or on more risk to

leave. As Fairli (2009) pp 22 mentioned what organizations are thinking in

time of recession “Why should we care if employees are happy? We're in a

recession. Shouldn't they be thankful to have jobs?" That's the attitude some

employers may have in the current economic climate.” Loyalty is two-way

Recessions are taken to be the announcements of layoffs.

Employee morale reach rock bottom in a downsizing within an organization. In

such job un-security the top performers are the first to leave the organization.

The top talent knows that they can get a job anywhere. Baird & Smith (2009)

mentioned “High-performing individuals are actually more at risk of walking

out the door during economic downturns.” Even in a recession some

companies have companywide retention policy. The no-layoff policy at

semiconductor in situations where a layoff is unavoidable or for dead wood,

the key talent can be retained by open communications in the process. Due to
the Sterling is coming down in comparison of euros and dollars talent is going

out in Europe and other areas where the recession is over and they have job

security and the pay is good As Churchard (2010) Academic talent could be

attract away from the UK in an increasingly competitive international market

as budget cuts bite. Fresh graduates can leave the jot it is necessary to

communicate and need to inform them about carrier growth in the

organization. As Davis & Mirza (2009) pp1 “They had no idea how to get

promoted in their current organizations, because many leaders came from

outside-and the students weren't willing to wait to figure out how to advance.”

Steps an organization can take to improve retention are

Exit interviews or other source to know why employees are leaving the

organization. Is the first step to stop it.

Through financial and non financial rewards like more pay, bonuses career

opportunities and work life balance.

HR needs to listen to employees and do it regularly so that employee knows

that some one is in the organization for them. Create trust between

employees and organization. Through embedded physiological contract.

Give employees quality workplace, development, training and social

opportunities or anything which is valued by workforce.
Give competitive pay this can be hard in recession but to retain organization

have to compete with other organizations for internal customers. Inform the

employee about full package like bonuses, incentives tell them what total they

are getting.

Due to recession pay rise is limited can get employee participation and

involvement through non monitory incentive like job satisfaction, by employee

voice involve in decision making through financial, job and communication

and information involvement.

Regular goals and tasks are source of motivation but set realistic and

achievable goals give smart targets, specific, measurable, achievable,

realistic and timely. It will become frustrating if the goals are not achievable.

Give flexibility to the workers instead loosing the worker retain the knowledge,

Give part time, flexible contracts, work from home and what ever employee


Give performance rewards but after proper and transparent appraisal system.

This is good for efficiency; increase in commitment and for boosting the

morale in this depressing time.

Acknowledge employee contribution towards organization growth there is no

cost on saying “Thank You”
2.4 Training

In recession a highly trained, motivated workforce which know the realities of

the business and the technological change in the environment and has the

capabilities to adopt these changes in this recession time will be the biggest

asset for the company. During recession organizations are looking training

budget as an expense but as is a fact that knowledge worker is the asset for

the company they should look it as an investment. As Visner cited in

Anonymous (Jul 2009) pp 42 “training for our employees as an investment

just like new equipment or technology. Not training our employees would be

more costly to our future than any expenses that could be saved in the short-


Training and development in any organization engage the employees towards

the right way for the right things. There is big stress in recession on

employees for their job security. Training and development will give them

confidence and trust on the organization and as result employees will perform

well and will deliver better products and services. Better products and better

services will generate more revenue for the employer in this recession time.

As Brazeel (2009) pp2 “Developing the skills of the workforce not only

strengthens a company's competitive edge, but also inspires loyalty,

organizational commitment, and encourages continued learning for the

future.” The training should not be for only for transfer of information or how to

operate some new technology but it should be for acquiring knowledge. As

Chapman (2009) pp 22 “companies will be struggling if they have not retained

and improved their skill base. These activities are key to improving
productivity and competitiveness for businesses both large and small.” It is

possible to train the employees during recession and can increase the

organization knowledge. Human resource need to be creative class room

training can be replaced with low cost substitutes like mentoring, e-learning or

blended learning. When commissioning e-learning the organization should

work with the provider and adopt a modular approach so that content of

training can be reused or repurposed so that used for longer term. The recent

development in learning as mentioned by Ahmed (2009) is Electronic

performance support system which can deliver bite-sized e-learning that can

be efficient and cost effective technique because employees complete

relevant modules while they are performing their job. As Ketter (2009) gave us

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