It is no news to managers that the global economy has gone – and in many countries still is going through — a rough patch. The unemployment rate in the U.S. hit 10% in November, a notch down from 10.2% in October. The pressure is on more than ever to reduce costs wherever one can find them. Staffing invariably constitutes a major cost to most companies irrespective of the kind of industrial sector they are in.
To give one example, airport operator Fraport AG’s bill for employees in 2008 amounted to 50.3% of total company expenses.
But this does not mean that the situation across the globe is uniform. While employees in North America and Europe will hold onto their jobs by the skin of their teeth, Indian employers will soon have to face up to a different scenario: salary inflation and high attrition rates as the economy here exits the slowdown with a vengeance.
So should we be satisfied with human resources merely concentrating on hiring in good times and, in bad times, firing employees outright or at least developing ever-more intricate voluntary redundancy programs and other intricate ways to reduce employee entitlements such as holidays, pay, and training?
Talking to some HR professionals, it often feels like it. But HR teams are not the only ones to blame for this limited view. As with so many individuals and departments, they tend to do whatever management throws at them. So the question is: What should management reasonably expect HR to deliver in order to actively drive an organization’s goals?
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