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- 1. Responding Effectively to Current Economic Pressure Anjum Fayyaz – UNIDO/LHRF Human Capital Management Conference, July 22, 09 – PC Hotel Lahore.
- 2. “ if millions of jobs were not at stake, not to mention the economic balance of the planet.” (Laurent Joffrin, editor Libération newspaper)
- 3. When fortune frowned The worst financial crisis since the depression is redrawing boundaries between government and markets, says Zanny Minton Beddoes. Will they end up in the right place? Oct 9th 2008 – The Economist
- 4. Survey: Latin America – Nov’08 Effects of Economy on HR Turbulence affecting global markets Companies seeking answers to questions: Postponing new hires Reducing training & development Recruiting & hiring in most affected area Concerns : Reducing cost and investment (particularly training) Layoffs & hiring freezes (downsizing or right sizing) Salary increases and compensation (?) Organizational climate & employee motivation (?)
- 5. Survey Conducted with 245 Respondents Survey conducted in Nov’08 28% 9% Change HR Focus, Structure & Function 30% 10% Change Health & Benefit Plan 30% 10% Variable Compensation 38% 17% Reduce Workforce 48% 12% Increase Communication with Employees 43% 17% Restructure Company 43% 23% Reduce Training & Development 40% 44% Stop Hiring Next 12 months Last 12 Months Activities
- 6. Reaction to a Crisis Situation? Normal reaction; ways to cut costs, almost always in the area of labor Reduce productive capacity due to contracting demand Main mistake; adjustments without analyzing Look for greatest quantitative adjustment rather than interventions & improvements Crisis requires global analysis
- 7. Reaction to Crisis Situation by Leading Cos. in Pakistan? IT Telecom Beverages Electronics Engineering Management Development
- 8. Crisis Handling: Leading IT Company Two Strategies Hiring Congealed for 3 months; not a high impact Head of Department; justified and hire although normal hiring blocked Compensation 2008; no annual appraisal; first time in the history of Co.; shared with employees (why) Provident fund; ceased for limited time; linked with target; reduced fatty areas Training & Development External trainings reduced Internal talent explored; team of trainers Reduced training cost
- 9. Crisis Handling: Leading Telecom Company Hiring Layoffs: Oct’ 08; 140 ,Apr’09; 60 ( bottom 10%) Decision; took 4 months (ideal 15–20 days) Poor communication; WIFM (employees) Compensation & Benefits Benefits; rationalized; gross to basic Provident fund; 10% – 8.33% Gratuity; 3 – 5 years; gross to basic General Concerns Employee morale; bad Delegation of power & authority Expectations management (solution) Transparency, communication, decision
- 10. Crisis Handling: Leading Beverage Company Hiring No Layoffs; 2800 to 3200 (one year) Crisis vs. Opportunity; improved quality of hiring; talent available Linked with vision & strategy; 22% growth vs. 15% average growth of industry Salary Increased by 22%; above average Training & Development Increased by 60% Number of training hours increased Training; opportunity in crisis Treat people as assets Vision & Growth Strategy Main pillars
- 11. Crisis Handling: Leading Electronics Company Hiring Layoffs; 3% – 4%; 40 – 50; revisit; additional fat reduced (opportunity) Linked with Vision & Strategy Training & Development Increased by 40% (more important in crisis) Strategy Intrinsic motivation of HR Department Change of focus; Outreach to other departments Workforce trained; behavioral skills in addition to technical skills Communication Frequency of meeting increased by 50% Employee engagement
- 12. Crisis Handling: Leading Engineering Company Hiring Overall workforce increased; 35000 to 42000; 20% additional fat reduced; careful communication on rightsizing Performance evaluation; good talent retained; average / below average had to go Training & Development Huge budget; changed strategy; external resource persons to in-house faculty Training of executives & business managers; external trainings Strategy Business paradigm; local to overseas No change in compensation & benefits Expectations management
- 13. Crisis Handling: Leading Mgmt. Development Company Hiring No layoffs Increased by 9 people; 3 months 2 senior professionals hired Strategy Focus on growth & strategy Regional expansion; 1 to 3 cities
- 14. Crisis: Lessons/Opportunity Hiring Some hiccups; Reduce additional fat Opportunity; revisit Co. & hiring strategy Easy to find and retain good talent Communicate, Communicate & Communicate Compensation & Benefits Rationalized (oppt’y); share ‘why’ part Training & Development More important in crisis Reduce external training Explore internal talent; develop trainers Business Focus & Strategy Based on business growth & strategy Change focus of HR department; outreach Expectations management
- 15. Thank You Q & A [email_address] [email_address]