6 Ways the Recession Has Changed Hiring Practices

6 Ways the Recession Has Changed Hiring Practices - Vault

Aman Singh article in Vault has caught my attention after having read the most recent study of the The Hackett Group that concludes an "Acceleration of Offshoring Trend Driving Loss of Millions of Finance and IT Jobs in U.S. and Europe".

How has the recession affected HR policies at companies nationwide in the last two years?

As employees who had hunkered down during the recession once again start actively looking for growth opportunities, and in many cases, change employers, how are companies gearing up their retention efforts?

It seemed this problem is so acute that at a recent conference for HR executives, many executives confessed in private conversations that they had recently been pulled from other operational duties to assist in talent development and management.

Titled Talent Management: Getting and Keeping Your Best People, the panel featured HR executives from companies that together manage approximately 350,000 employees worldwide. They had a lot to offer—both on the question posed above, and on several other pressing HR questions of the day.

The panel:

--Moderator: Scott Stevenson , Director of Talent Management and Organizational Design, PricewaterhouseCoopers Advisory (PwC)
--Bob Bennett, Chief Learning Officer and VP for Human Resources, FedEx Express
--Sayed Sadjady, Talent Management and Organizational Design Leader, PwC Advisory
--Helena Gottschling, SVP for Leadership and Organizational Development, Royal Bank of Canada (RBC)

Highlights:

Employee Disengagement Isn't Leading to Employee Attrition

Stevenson indicated that while increasing percentage of employees were seemingly disengaged at work—especially in the last 24 months—they also made up the majority of the workforce that wasn’t actively job hunting.

"Between 2007 and 2009, the percentage of a disengaged workforce went from 10 percent to 33 percent. But this 33 percent were the ones not leaving either! Which leaves us with a big realization: One out of every four individuals leaving the company is a high potential candidate. This figure marks our biggest challenge yet," he said.

At FedEx, the focus has always been on internal promotions "and that has helped us tremendously in the last couple of years," Bennett offered, adding that current CEO Frederick Smith started at FedEx as a carrier. However, Sayed Sadjady put the onus of voluntary attrition on the demographics of their workforces. "The average age of a PwC employee is 28 years," he said, adding that job hopping at that time in one's career is considered normal these days, even necessary for employees to move onto better opportunities.

From Recruitment to Leadership Development Programs

For RBC's Helena Gottschling, the last two years saw a significant shift in priorities (and budget allocation) from external recruiting to internal training. "There has been a heightened amount of attention on how we are managing our talent and exploring the diversity of skills, generations, and capabilities already in place at RBC," she said.

Both Bennett and Sadjady were in agreement, adding that having been in the thick of the recession had forced many heads to start looking for potential internally.

Whose Responsibility is Leadership Development: The Employee or the Company?

According to Gottschling, professional development must be a partnership: "Individuals must be eager to develop. And companies must be equally proactive on providing the facilities and opportunities to match this eagerness."

For Bennett, however, this accountability has shifted in the last two years. "At FedEx, development no longer means promotion," he said, explaining that as of 2010, all employee information (resume, work history, traits, achievements, goals, etc.) is fed from one single database that connects to the entire system of job posts, career development opportunities, etc. This puts the onus on the individual employee.

Indicating that the traditional process of hiring, onboarding, goal setting and eventual development—a predominant feature of the professional services industry—has undergone a gradual integration in other industries and at PwC as well, Sadjady said that the "process has become much more ad hoc and need-based than a calendar-based objective."

Role of the Chief Human Resources Officer is Changing: HR's Seat at the Big Table

Gottschling emphasized a significant shift in leadership's attitude toward the participation of the human resources chief in operational and overall strategizing. "And the last two years have made this ever more prominent," she said, adding, "Goal setting and setting projections across departments are no longer the predominant functions of the finance department."

She also pointed out that because the "drivers of engagement had changed dramatically in the last two years," the HR department has risen in importance to deal with long term goal setting and projections. "Also, the development needs of today's workforce are so unique that it has become much harder to look even three years ahead," she offered.

Bennett alluded to this trend as well, indicating that the functionality of human resources is gradually shifting from a discretionary dispensability at companies to a prominent leader in any discussion on company strategy, goals or mergers and acquisitions.

Employee vs. Employer Value Proposition: What Sets Companies Apart as Preferred Employers?

For Gottschling, value propositions must cut across functionalities and all employees. "The No. 1 driver for a managing director in our capital markets group, for example, could be compensation, but for a customer service representative in one of our branches, the No.1 driver would be her relationship with the supervisor or whether she feels valued at the company, or even the company's reputation," she explained.

Bennett gave high points to corporate culture and detailed four key requisites for a value proposition:

1. Employee goals must be aligned with company goals.
2. Employees must feel that they make a difference.
3. Employees must have the ability to grow with the company.
4. Employees must know they are trusted and have a voice in the company.

"Everything we do and the people who do the tasks can be replicated. But corporate culture cannot be duplicated. It is the one thing that sets a company apart. And this is driven by employee engagement," he said.

The Partnership of HR and Diversity

Charting the course diversity has travelled both as a priority as well as a driver for engagement and growth, Sadjady said, "Diversity was initially driven by compliance and corporate governance. Then diversity became a necessary demand from the client base. And today, diversity of experiences, abilities, skills and backgrounds is a crucial component of overall success." [Related: Why Diversity is a Necessary Job Skill, not an HR Policy]

At RBC, Gottschling added, "For me, the Chief Diversity Officer is my CEO. Our diversity is emphasized in every function of the company, from hiring, leadership development, identifying high potential candidates, as well as earmarking opportunities for expansion."

Finally, as Bennett put it, "Diversity today is a business need, a requirement." This puts the onus primarily on the human resources department to push for and leverage the potential of a diverse workforce. And now that HR executives are beginning to crack the ceiling to the C-suite, disgruntled employees who feel unvalued or noncontributory to company initiatives and strategy, can hope to have a voice on the big table.