Impacts of the Global RecessionImpacts of the Global Recession on HR Strategies

Presented by

Donald P. Rogers, PhD, SPHR, GPHRDirector Master of Human ResourcesDirector, Master of Human Resources

Rollins College

Purpose & MethodsPurpose & Methods

• Get You ThinkingGet You Thinking

• Identify Post‐Recession Trends

i li i• Discuss Implications

The Big InsightThe Big Insight

• More Companies must be More GlobalMore Companies must be More Global to be Competitive

• HR must find ways to help make that• HR must find ways to help make that happen

CEO d ’ k h HR h l• CEOs don’t know how HR can help

HR StrategiesHR Strategies

• “ a strategic approach to people…a strategic approach to people management that focuses on the issues that are critical to the organization’sthat are critical to the organization s success” 

• Accounting for People Taskforce (UK)

Organizational SuccessOrganizational Success

• RebuildingRebuilding

• Growth

l• Renewal

Critical IssuesCritical Issues

• RecessionRecession– The Slow Return

• Unfulfilled Expectations• Unfulfilled Expectations– Anger

– Mistrust

• Cautious Optimism

People Management StrategiesPeople Management Strategies

• HiringHiring

• Compensation

l l i• Employee Relations

Danger PointsDanger Points

• Performance ManagementPerformance Management

• Training & Development

i i &• Attrition & Turnover

Five Big TrendsFive Big Trends

• Growth in Emerging MarketsGrowth in Emerging Markets

• Labor Productivity & Talent Management

Gl b l l f G d f i &• Global Flows of Goods, Information, & Capital

• Natural Resource Management

• Increasing Role of Governmentsg

Growth in Emerging MarketsWhat Companies are doing to capture Growth

Building Local Presence

Developing Local Partnerships

Recruiting Local Talent

0 10 20 30 40 50 60

Developing Local Talent

0 10 20 30 40 50 60

Labor ProductivityLabor Productivity

• Increasing emphasis on high value goods & g p g gservices changing labor mix– Competencies 

• General Management• General Management• R&D• Strategy 

d– Productivity– Labor Costs 

• Age demographics favor emerging economiesAge demographics favor emerging economies• Education demographics favor developed economies

Global FlowsGlobal Flows

• Flows of goods information & capital willFlows of goods, information, & capital will remain open, but will not grow much

• Capital Markets will become more• Capital Markets will become more integrated

I f i fl ill b fi• Information flows will benefit customers more than producers/providers and much 

h i di imore that intermediaries 

Resource ManagementResource Management

• Major Strategic Issue but not a major HRMajor Strategic Issue, but not a major HR Issue (no role for HR)

• Very different levels of post recession• Very different levels of post‐recession, strategic importance by industry

Role of GovernmentsRole of Governments

• Levels of public debt may have negativeLevels of public debt may have negative impact on GDP growth in Europe & North AmericaAmerica– Less Leveraged Growth

• Governments pursuing national interests• Governments pursuing national interests rather than shareholder interests may reduce freedom of action in Asia Russiareduce freedom of action in Asia, Russia, Brazil, & Middle East

SpendingSpending

• Consumer spending in emerging marketsConsumer spending in emerging markets is more optimistic

• Consumer spending in developed• Consumer spending in developed markets is more reserved

B i di i b h ki d f• Business spending in both kinds of markets is more optimistic

• Government spending is more optimistic & much more pragmatic

HiringHiring

• Increased demand for skilled laborIncreased demand for skilled labor

• Shortages of skilled labor in emerging marketsmarkets

• Skills Gaps

CompensationCompensation

• Employees still focused on improvingEmployees still focused on improving their standard of living

• Demands for improved quality of life• Demands for improved quality of life becoming more common in China, India, & Brazil& Brazil

• Government support shifting away from ‘ i k’ i i Chi I di‘at risk’ compensation in China, India, Russia, and EU

Employee RelationsEmployee Relations

• “What are they going to do? Quit?” YES!What are they going to do? Quit?   YES!

• Increasing demands for protection from market volatilitymarket volatility

• Increasing support for unionization

• Increasing expectations of voice & respect

Performance ManagementPerformance Management

• No more “and other duties as needed”No more  and other duties as needed– More prescribed performance expectations

More stable expectations– More stable expectations

• Longer performance timelines

• More group performance expectations

• Less use of ‘pay for performance’

• More use of long term contracts (5 in 3)

Training & DevelopmentTraining & Development

• Global Skills ShortageGlobal Skills Shortage

• Global shortages in general management, R&D strategy technical skillsR&D, strategy, technical skills 

• Can’t hire, must train

• Most countries teach technical skills on‐the‐job (entry level is pre‐apprentice)

Attrition & TurnoverAttrition & Turnover

• Emerging markets requiring much moreEmerging markets requiring much more sophisticated (and expensive talent)

• Costs of attrition & turnover escalating in• Costs of attrition & turnover escalating in emerging markets

L j b hif i i Chi I di &• Less job‐shift gaming in China, India, & Brazil

• More spending on ‘quality of work life’

The Big InsightThe Big Insight

• More Companies must be More GlobalMore Companies must be More Global to be Competitive

• HR must find ways to help make that• HR must find ways to help make that happen

CEO d ’ k h HR h l• CEOs don’t know how HR can help

Our Job is to Tell Them!Our Job is to Tell Them!