Resource Talent Planning - Assignment Example

Resource Talent Planning Affiliation What labour market trends make it hard for these companies to recruit and retain the staff they need? What developments might change the situation? A labour market is a place which matches the demand and supply of labour in a particular region. Each labour market is different from others and the trends which shape the market are also different (Blanchflower, 2015). The trends of Gibraltar are different from other countries of UK because it is a small town and standard of living is very high. The most important labour market trend that creates trouble for two largest online gambling sites to recruit and retain employees is the nature of job. The job requirements of online gambling industry are very different from any other business because it requires high skilled labour. Availability of skilled labour is a main problem which causes difficulties for online gambling businesses. The right kinds of people to perform this job are not easily available because the population of Gibraltar is not really high. Moreover living standard is very high due to low taxes and people are not very much interested to do any unexcited job. Another reason that creates difficulties for online gambling companies to recruit and retain employees is lack of requisite language skills. In order to work in this industry, employees should fluently speak at least one another language along with English. Employees who fail to speak properly cannot work in this business for longer time. Moreover, there are no extensive legislative requirements for setting any online gambling business which means there is huge competition in this business. Due to huge competition and highly technical job requirement it becomes hard for companies to recruit skilled employees and also to retain their employees. By developing proper Human Resource policies the problem of high employee turn can be solved. Online gambling companies should develop HR policies to restrict employees not to leave the company before at least one year. Government should increase legislation so that employees cannot easily leave their jobs. Labour Unions also play a great role in share labour market trends like availability of employees, entry and exit into company, and working conditions (Henty, Lemos, Portes, & Bullen, 2006). Strong labour unions create trouble for companies to follow their policies and sometimes interrupt in companies’ operations and policies. 2. a. Recommend two differing approaches that could be taken in the short term as means of improving their ability to retain staff effectively. High employee turnover is a critical situation for a company because it shows that there are some problems in company’s management or policies. Organizations should take serious actions to reduce employee turnover rate. The two important approaches that companies could take in short term to retain employees are: i) Propose a competitive benefits package that meets employees’ needs: in order to retain high skilled and competent employees, it is necessary to offer them competitive benefits package. A package that fits employees’ needs better than the offer of your competitor. A benefit package should include life insurance, health insurance, handsome salary, and a retirement saving plan. Along with these benefits small perks like flex time, telecommunication option, and vacations show employees that the company understand their personal and professional life, so employees feel good and work in long-run with the company. ii) Cultivate a sense of ownership: One of the best and successful ways to retain employees is to give them rights to make decisions so that they feel sense of ownership. Employees want some freedom and the companies who cultivate sense of ownership in their employees have low employee turnover rate. Moreover, create a good reward system for employees, so that they can work with motivation. Effective reward system helps companies to retain their high skilled employees in long-run. 2. b. What cost savings could be realised as a result? It is very important to know the difference between cost of hiring and cost of retention. In IT companies like online gambling, employees switch their jobs more often than any other industry, therefore, companies face high employee turnover and high cost. By calculating cost of new hiring and cost of employee retention these companies can make effective strategies. When employees leave jobs companies bare two types of costs to replace them. The first one which is easily measurable is direct cost. It includes the cost of job ads, sign-on bonuses, recruiting fees, time and cost of conducting interviews, salary increases, and other new employee hiring costs (Blatter, Muehlemann, & Schenker, 2012). The second cost which is not easy to calculate is indirect cost. This cost is related the loss of existing employee, therefore difficult to calculate. When an employee leaves organization he/she takes all the skills, expertise, and knowledge with himself/herself. The time and money company has invested in that particular employee becomes a loss for the company. Moreover, in high-tech jobs when an employee leaves a position then the company runs unstaffed for some time period. The loss of productivity for that time period is a huge loss for the company. If a company makes a decision to hire consultant to manage the work load for short time, there is also a huge cost involved. Along with these costs, if the reason behind leaving of job of employee is due to management issue then there may be cost associated with decline of morale and productivity of other team members, or in worse scenario, the company can lose many employees at one time. It has been revealed by many studies that the replacement of an employee, cost more than three times the annual salary of that employee, mostly depending on the time it takes to fill that space. Furthermore, almost 80% of a position’s annual salary can be accounted by direct cost. It is a common phenomenon that when an organization hires a new employee to fill any position it has to pay 13 to 15 % more salary. In high tech jobs especially in IT industry this increase can be 30 % (Monte, n.d). Jobs that require higher levels of educations and specialized skills tend to have higher ratio of turnover and higher cost. According to sociologist Milkman and economist Appelbaum, well compensated, high educational requirement executive jobs have high turnover cost than those jobs which require low education and experience (Blatter, Muehlemann, & Schenker, 2012). Online gambling companies require skilled employees who understand the online procedures and can facilitates customers, therefore employee turnover ratio is very high and companies have to face high cost. The simplest way to calculate recruiting cost is through recruiting cost ratio. It is a straight forward simple calculation based on staffing function of recruiter and is ideal for budgeting plan. The recruiting cost ratio reflects the relationship between compensation and supply and demand of employee. The ratio can be calculated by dividing recruiting cost into total compensation recruited and then multiply the result by 100. Through this calculation online gambling companies of Gibraltar can calculate their recruiting cost. Employee retention cost is lower than recruiting cost because the existing employee knows organizational culture and work process and can better work rather than new employee. In UK the logistical cost consists on different elements such as: hiring of temporary workers before the replacement, which usually cost £3,618, time management spent for interviewing new employees costs £767. The fee that company pays to recruitment agency is at least £454, advertising expenses accounts for £398, and the time company’s HR team spent on processing replacement costs at least £196 (Boushey, and Glynn, 2012). The cost of retaining employees is much lower than hiring new ones and companies can safe at least 23% of their cost, so is better for these companies to retain their existing employees. 3. a. Over the longer term what should be the key features of the resourcing strategies that the companies establish? Employee resourcing strategies are necessary for companies to retain existing employees and to hire new talented employees. The important features that any employee resourcing strategy must cover are: contribution of effective human resource management team, employee training and development programs, effective performance management system, better pay and reward system, and employee relation. Effective Human Resource Management Team Hiring of new employees and manage their issues is the responsibility of human resource management team. If there is no efficient human resource team in an organization then there are more chances of high employee turnover. In order to develop effective employee resourcing strategies the online gambling companies should develop effective human resource department (Premuzic, 2015). This will not only help the companies is present time but also help them in longer term to retain and hire talented employees. The human resource team plays a vital role in making effective resourcing strategies so the companies first strengthen their human resource department. Training and Development Programs Training sessions are important for new workers to polish their skills. In high tech jobs it becomes necessary to companies to design training and development programs for their employees. Training helps new employees to learn necessary skills and it helps existing employees to polish their skills. Investment in employee training and development programs facilitates organizations in the long-run. It is important for online gambling companies to invest some money in employees training so that they can teach new and required skills to new employees. In the region where there is shortage of skilled people the companies can higher average people and can train them so that they work better for the companies (Raj, & Zaid, 2014). Effective Performance Management System Effective performance management system plays a significant role in employee resourcing strategies because it sets benchmarks for new hires and manages performance of existing employees. A better performance management system not only helps company to manage its work but also helps employees to know their performance improvements. Therefore, companies should develop effective performance management system. Pay and Reward System Effective pay and reward system is very important for resourcing strategies because pay is the most attractive element which employee consider when selecting any job proposal. In high competitive regions where skilled and educated human resources are not easily available, companies should develop an effective pay and reward system. The reward system not only attracts new individual towards the company but also help company to retain its employees. When employees receive rewards on the basis of their performance they feel motivated and work well. Employee Relation Good relationship between employee and employer is necessary for retaining employees for longer period. According to the article on Harvard business review those employees who do not feel valued by their employers tends to switch jobs more often than those who have good relationship with their employers or managers (Premuzic, 2015). Weak employee relations in an organization suffers overall organizational productivity. Therefore, it is necessary for companies to develop strong employee relations. 3. b. What steps should they take to ensure that future skills needs are met? In this competitive world business especially high technology businesses face the challenges of lack of skilled human resources. This problem impacts on companies’ growth, productivity, and future innovation. It is necessary to take certain actions in order to ensure the skills needed by company today and in future are met fully. Engineering and High-tech is among top five employment sector of UK, which employs around 44,500 individuals (Mohamed, Nor, & Dahalan, 2014). This sector is not an ordinary sector therefore needs skilled individuals. The population of Gibraltar is not very skilled and online gambling companies are facing serious problem in recruiting and retaining talented employees. In order to ensure that future skills needs are met the companies should take following steps (Powell, 2014). i. Up skill the current staff: To meet future skills needs it is important to train existing employees. By analysis what skills are necessary for the business in future, companies can train their existing employees so they can perform better in future. Investment on employees training and development can help companies in the future to generate more profits. ii. Design recruitment strategy: effective recruitment is necessary so that companies will hire those individuals whose skills and expertise are required by the company. Companies should include traineeships and apprenticeships in their recruitment strategy because they reduce recruitment and training costs of the company and increase productivity. iii. Develop partnership with institutions: by developing partnership with educational institutions such as, business schools and colleges, companies can influence and shape their future workforce. The companies should take part in mentoring programs and career events. iv. Broaden skills selection: it is necessary to hire the right individual, a person who can work with the organization in the long run. Companies should broaden their skills selections and hire multitalented individuals to ensure that their future skills needs are met. v. Keep employees informed and inspired Companies which share information with their employees face less resistance to any change by their employees and employees work with more inspiration. It is necessary for companies to keep their workforce inspired and informed. 3 c. Explain how the companies are positioned strategically and to what extent their actions affect one another. In order achieve higher profitability and growth organizations strategically position themselves. Strategic positioning increase market position and create a unique image of company in the minds of customers (Jyothsna, & Sudha, 2014). It is a trade-off, means organizations have to select one or two specific elements to position them and leave the rest. Companies who strategically position themselves better than their competitors get more market share and have long lasting impact on customers’ minds. In high competitive environment it is necessary for companies to pay close attention towards strategic positioning strategies and select the right strategies because this is the only element which can difference the business from competitors. To find the right positioning strategy is a challenge because each strategy has positive or negative impact on company’s image. Following are the ways through which companies can position themselves. Operational Excellence Companies who achieve operational excellence do business cheaper, faster, more effectively, and consistently than competitors. They focus on their operational excellence and provide excellent services to the customers. To achieve operational excellence it is necessary to perform operations better than competitors and deliver fast and cheaper services to customers. For example Intralot is a public listed company, which provides innovative game content, integrated gaming and transaction processing systems, and sports betting management. In order to achieve operational excellence the company has made strategic alliances with BIT8 (a gaming platform solutions company) and has consolidated its online position (Premuzic, 2015). Product or Service Differentiation By developing unique product or service companies can strategically position themselves and can achieve higher profitability. Product or service differentiation is a very successful positioning strategy which gives competitive edge to the company and creates a unique image of the company. Nintendo’s Wii U, which is a family gaming experience, is based on focused differentiation strategy because of the innovative game controller system. This system is very distinct from other game systems (Jyothsna, & Sudha, 2014). Cost Leadership Some companies position themselves as cost leader by providing low cost products and services to their customers and earn high revenues. For example Betfair, the largest online betting exchange focuses on low cost structure of trading system. The company ensures that transaction costs for online traders are kept low. The company takes every possible step to provide better value and information to its customers than other traditional bookmakers. 4. Explain why these companies would want to become employers of choice. To what extent would it be possible for them to achieve this? To get success in today’s knowledge-based global world, companies know that skilled, competitive, and adaptable employees are asset for an organization. They not just compete in current situation, but also create better products and services that ensure the company’s future. Therefore, companies want to become employer of choice and pay high attention to increase their ability to attract, retain, and motivate employees (Raj, & Zaid, 2014). Online gambling companies want to hire skilled employees for their high-tech jobs so that they can compete well in the market. To win the battle for talent, companies know that they must become employer of choice so that they attract and hire competent people to work on the problems and challenges of global economic system. But to become employer of choice is not simple and easy, because attractive salary offers and promotion promises are no more effective to hire talented individuals. Now younger energetic employees want additional form of compensation. They want authority and space, they are look for opportunities and personal growth. To become employer of choice is the only option remaining for these companies to retain employees and to attract educated and competent employees. Becoming an employer of choice is critically important for these companies and for that they require change. Harvard Business Review conducted an online survey of global corporate leaders and found out that 82 percent of top level executives said that the most important asset of their organization is “talent”. They mentioned that they have seen a direct impact of talented individuals on customer satisfaction. Young and talented employees help organization by satisfying more customers but to hire those individuals is a critical thing because they expect autonomy from organization. By focusing on the following factors the online gambling companies of Gibraltar can become employer of choice: build trust and empowerment across organization, provide strong training and development programs to new and existing employees, communicate with honesty and fairness, provide flexible working conditions, provide good balance between work and life, provide clear career opportunities, and create good relationship environment between employees and employer (Yadav, 2014). All these factors help companies to hire talented employees and to retain their existing employees. To become employer of choice is difficult for these companies because of high competition and shortage of human resources. No matter what steps these companies will take they cannot get the position of employer of choice until the problem of shortage of skilled human resource will be solved. But they should focus on above discusses factors to attract new talented individuals and to reduce their employee turnover rate. Table of Reference Blanchflower, D. G. (2015). As Good as it Gets? The UK Labour Market in Recession and Recovery. National Institute Economic Review, 231(1), F76-F80. Blatter, M., Muehlemann, S., & Schenker, S. (2012). The costs of hiring skilled workers. European Economic Review, 56(1), 20-35. Boushey, H. and Glynn, S. J, (2012), There Are Significant Business Costs to Replacing Employees, Centre of American progress https://www.americanprogress.org/issues/labor/report/2012/11/16/44464/there-are-significant-business-costs-to-replacing-employees/ Henty, M., Lemos, S., Portes, J., & Bullen, C. (2006). The impact of free movement of workers from Central and Eastern Europe on the UK labour market. Leeds: Corporate Document Services. Jyothsna, M., & Sudha, M. (2014). ART OF IDENTIFYING POTENTIAL TALENT AND LEADERSHIP-THE KEY TO COMPETITIVE ADVANTAGE.Asia Pacific Journal of Research Vol: I Issue XVIII. Monte, J. D, (n.d), IT Employer Information - Cost of Hiring / Retention (COH), JDA Professional Services, Inc http://www.jdapsi.com/client/articles/coh Mohamed, R. K. M. H., Nor, C. S. M., & Dahalan, N. (2014). The Relationship between Human Resource Management Practices, Leader member exchange, Psychological contract Fulfillment, Trade Union and Employee Retention Behaviour. International Journal of Academic Research in Business and Social Sciences, 4(6), 174-185. Powell, A., (2014), 5 steps to ensure your business has the skills it needs now and in the future. Business West Blog http://www.businesswest.co.uk/blog/2015/02/13/5-steps-to-ensure-your-business-has-the-skills-it-needs-now-and-in-the-future Premuzic, T. C., (2015), Five Signs It’s Time for a New Job, Harvard Business Review https://hbr.org/2015/04/5-signs-its-time-for-a-new-job Raj, R. D., & Zaid, E. (2014, December). Improved Employee Retention Through Active Engagement and Focused Action. In International Petroleum Technology Conference. International Petroleum Technology Conference. Yadav, P. (2014). Employee retention and job hopping practices:-A bird eyes view. ZENITH International Journal of Business Economics & Management Research, 4(9), 44-51. Read More