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Challenges faced By Human Resource mangment:-

2009 has been the year of grim HR buzzwords - retrenchments, hiring freezes, recession and budget cuts

are some of the first to come to mind. Jobs in most industries and roles were major casualties of the global

financial crisis, thrusting leaders into an unflattering spotlight and straining relationships between HR and

staff.

There are plenty of reasons for HR to celebrate the arrival of 2010 in Singapore. For the local workforce,

economic growth is imminent as major projects like the inaugural Youth Olympics and two integrated

resorts create new employment and training opportunities.

While a new year signals the arrival of opportunities for jobseekers, it does not necessarily translate to a

fresh start for employers. Dealing with the aftermath of the financial crisis will not be an easy task.

Between managing expectations, strengthening trust with employees, and continuous efforts to control

costs, HR will have its hands full with a number of different people-related issues.

At the same time, it’s not all bad news for HR. According to Mercer’s global Leading through

Unprecedented Times survey, published in June, companies in this region are more upbeat about their

economic prospects. Indeed, HR issues will be more pronounced than ever before, but the mood inboardrooms appears to be lifting as the period of recovery begins.

When asked to enumerate the likely challenges of 2010, most HR consultants say they are concerned with

resources for managing talent. Among their chief priorities are talent retention and skills development as a

strengthening economy opens more doors to recruits. Branding and attraction will also be an issue for

HR, particularly in companies whose reputations have suffered from decisions to cut staff.

The end of the economic downturn may be drawing near but employers still have to look carefully at their

balance sheets. Residual uncertainties from a year of pay slashes will continue to have an impact on

employee morale in 2010. Companies will be scrambling to adjust salaries and pay bonuses to keep up

with employee expectations and maintain loyalties. For this reason, compensation and benefits issues

were also prominent on experts’ lists. 

If 2009 made one thing apparent, it’s the way HR functions in locally-based companies link to those in

offshore sites. With the economic crisis affecting economies on a global scale, this was a year for re-

assessing international assignments. Employers had to adjust remuneration packages according to the

sudden weakening or strengthening of currencies in host countries. Additionally, overseas assignments

might have been seen as major career incentives before budget cuts forced companies to scale back. HR

will have to communicate across borders to restore and re-assess expatriate packages in the upcoming

year.

Employers and employees agree that 2009 was a year of inequity  –  whether in terms of salary cuts

compared to rising costs of living, or overtime hours versus leisure time. Achieving Work-Life Balance

shifted from the check-list to the wish-list in 2009, but it is likely to be solidly back on the agenda in

2010. The fact that experts are moving it to 2010’s HR challenges list is both good and bad news. It isheartening that work-life balance will become a priority, and that HR may be better equipped to give

employees that much-needed break. However, like each of the top five challenges facing HR

professionals in 2010, it indicates HR will certainly have its work cut out for it.

5 Perceptions of HR 

Experts found it difficult to rank something so subjective and multilayered, but most agreed that this is an

issue HR must address. HR has been one of the most vilified departments in many organisations this year,

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and its efforts to limit attrition were largely underestimated. Not only does HR have to improve its image

in the eyes of employees, it has to strengthen ties with other business departments.

Research from Talent2 shows HR is still seen as a back-office, transactional and operational function in

Singapore and much of Asia. Buy-in from senior management is often hard to come by as well. Yet, high

expectations await HR.

In a recent Hudson Report, 12% of survey respondents said a dominating priority would be ensuring HR

strategy is the cornerstone of the overall corporate strategy. HR departments must examine their

effectiveness and the way they deliver services to ensure it becomes a high-performing function moving

into 2010.

Suggestions for improvement vary according to consultants. Some suggest HR outsourcing as an

important solution. It enables HR to decrease its administrative burdens and practice a more direct

approach to business needs. Others believe leaders should work to give a stronger definition to HR roles

in the organisation so they are more aligned with business requirements.

4 Cost control 

Cost control will be a corporate-wide priority in 2010, but there will be added pressure on HR to managebudgets through process and policy standardisation. HR must consider cost-efficient solutions in areas

such as compensation and benefits and training programmes.

But if forecasts show an upturn is on the way, why will cost control still be a challenge? Talent2 reminds

employers that recovery in 2010 will not be so drastic that employers no longer have the challenge of 

dealing with budget constraints. Organisations will not restore budgets and head counts to anything near

pre-crisis levels as they want to maintain continuous efforts to be as distanced from the effects of the

economic downturn as possible.

In multinationals particularly, the mantra “do more with less” has trickled from headquarter offices in the

US and Europe to Asia, despite this region faring relatively better in the crisis. But economic uncertainty

is not an excuse to ignore the backbone of any business: the people.

According to the ECA International 2009 Assignment Benefits Survey, HR is under significant pressure

to reduce costs for international assignments. Two-thirds of participants reported that they intend to

review various facets of their benefits policy in the upcoming year. However, employers are also

struggling to find a balance between cost management and finding the right talent to post overseas. These

conflicting requirements will be a major HR consideration in 2010.

Mercer consultants suggest looking for measures to contain costs. Organisations can leverage economies

of scale from regional frameworks on executive pay, employee health and benefit programmes, and

training and development. Meanwhile Hudson consultants predict that some HR departments will go

through restructuring themsleves. They may opt to outsource more non-essential activities, they told

HRM.

3 Employee Engagement 

If there is a lesson to be learned from past recessions, it’s the erosion of employee commitment in

organisations. Cost-cutting measures and other effects from the economic downturn have impacted levels

of trust and loyalty in employees. Many are feeling stressed and nervous. The upturn will see some of an

organisation’s best and brightest workers leaving to join competitors if their employers don’t take

immediate steps to motivate and retain them.

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Hudson says 14 % of respondents to one of its recent surveys expect employee engagement and re-

engagement to be linked closely with staff retention next year. The HR challenges lie in reconnecting

with the mood of the workforce, rebuilding trust and collaboration, and driving continuous and

transparent communication.

A great emphasis should be placed on measuring employee engagement levels within organisations.

Employee surveys, for example, will be very useful in highlighting where HR is succeeding and whichareas can be improved. HR should know its key talent segments and find out what they value. Mercer

consultants say employers might be surprised at new trends that are emerging, particularly in areas of 

work-life balance.

If resignations become more frequent, HR must structure its exit interview process to find out why people

are leaving, and what it can to do retain current and future employees. Feedback should not just address

HR’s initiatives - leaders should also be assessed on their roles in motivating employees.

Besides feedback, HR can be proactive with its retention efforts. Change management programmes must

adequately address employee needs. Paying special attention to career development opportunities will

send a message to employees that their growth in the organisation is encouraged and valued. Leaders

must be deployed and equipped at all levels to inspire employees to work towards a common goal in orderto minimise distractions and increase productivity.

2 Compensation and benefits 

The economic downturn has changed the way HR approaches compensation and benefits. According to

Hudson, 2010 will be a year of realigning total rewards programmes to meet corporate objectives.

Research from Talent2 suggests adjusting salary and rewards packages will be half the battle for HR

professionals in the upcoming year. Finding creative and cost-effective ways of combining tangible and

non-tangible rewards will also be a major challenge.

Employers will benefit from paying particular attention to using compensation as a retention and

motivational tool, or leveraging non-financial rewards to keep employees better engaged. Hudson says

HR departments will be exploring more effective ways of communicating benefit plans that offerindividual flexibility and build appreciation, trust and commitment.

Not only will HR have to be more innovative in this key area in 2010; they will also have to take a more

individualised approach to rewards and recognition schemes. Incentive programmes should target all

employees rather than just sales personnel who have traditionally been the focus of such initiatives. Out-

of-the-box thinking will be crucial in 2010 as companies strive to choose rewards which are relevant and

motivational.

Organisations which make it a priority to build customised compensation and benefits programmes are in

good company. According to Mercer’s 2009 Employee Benefits Choice survey, near -100 percent of 

Singapore companies believe providing employees with a choice in the benefits that they receive is

crucial for responding to diverse workforce needs and values. Employers also acknowledged the

importance of implementing employee choice programmes in order to remain competitive in the

marketplace.

1 Talent retention and development 

This issue makes it to the top of the HR challenges list for a number of reasons. While the global financial

crisis helped to retain staff in 2009, employees will be less cautious and more inclined to change jobs

during the recovery. Likewise, competitors will once again able to afford to hire and poach. In particular,

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employees who were more closely scrutinising remuneration and benefits, job security and career

advancement prospects in other companies will gladly make the move as hiring freezes are lifted.

Proactive HR strategies must be implemented now to retain employees.

According to the Hudson report, 22% of respondents expect that talent development will take precedence

as HR’s first priority moving into 2010. Improvement of talent development strategies and delivery will

be key to leveraging the available talent as effectively as possible, especially for success-critical positions.

Mercer adds that developing high-potential talents for the future should also be high on HR’s agenda.

Being one of the top executive talent challenges faced by companies in Asia, leadership development

initiatives must be stepped up in order to avoid talent shortages at the most crucial levels.

Employers should ensure future leaders are given access to future development and learning opportunities

to accelerate their skills development. They must also gain a better understanding of the skills,

competencies and behaviours that will be required of leaders in their organisational culture, and assess the

gap between these needs and existing talents.