Every organisation faces some type of human resource challenges. Each organisation has its own challenges which can be differ from other. Market changes from time to time which causes issues in human resource department of any organisation (Mehta and Mehta, 2009). With changing world, it is important to look after the strategic policies of human resource department (Stavrou-Costea, 2005). Development in market has changed the business scenario. These changes either bring some new opportunities or some challenges for the employees working in any organisation.
This report focus on challenges which are faced by different organisations in UK. It has selected UK based private organisations for further study regarding the HR challenges. The country is facing problems of economic changes which lead to many issues in private companies. It also throws light to HR strategies and practices which can help organisations to overcome from these issues. Different challenges have different strategies to solve them, so this study recommends private organisations of UK to select right strategies and practices as per the challenges they are facing.
Human Resource Challenges
UK is right now facing the problem of economic uncertainty which leads to many challenges in private organisations working there. This economic change in country also affects the human resource management of these organisations (Agarwal and Ferratt, 2001). With the changing market in present scenario, there come new challenges and problems for companies to handle. The lists of challenges which are being faced by private organisations are as follows:
1.Problem of Retention: Retention is biggest problem in current time. It is a major challenge for companies to retain their talented and deserving employees (Budhwar and Khatri, 2001). They quite organisations due to many issues like salary dissatisfaction, mismatch job, tendency to get bored, more expectations etc. Nestle in UK faced the problem of employee retention which later was solved by organizing recruitment team.
2.Issues in Recruitment: Companies somewhere feels shortage of skilled candidates. The number of graduates is less than the number of candidates needed by companies. It is complex task to find right candidate for right position (Lengnick-Hall and Lengnick-Hall, 2003). There is a need to bring balance in recruitment processes which does not lead to wastage of time and resources. Private Banks of UK also suffered from skilled candidate shortage during the time of recession.
3.Challenges in labour market: Britain is facing huge challenge in case of labour market. This challenge results in unemployment and increase the risk factor. Recession is one of the causes for creating this problem. After recession, there is substantial gap in labour production (Jordan and Düvell, 2002). The weak productivity and performance of UK industries shows poor output with insufficient employment. Manufacturing companies like Honda, Jaguar fight with challenge of gap in labour production due to recession in UK.
4.Diversities in Organisations: Companies face diversities among employees in different fields. As market of present time is reaching to global level, so it tends to increase in diversities. Companies possess employees from different regions having different culture, languages, perceptions (Dreachslin, Weech-Maldonado and Dansky, 2004). Organisations face challenge in using and managing these discriminations for positive purpose. This is especially true for hospitality firms like Hilton, Marriott where bartenders, waiters etc. are from Asian nations.
5. Decrease in production: The issues related to labour market, unemployment, shortage of skilled candidates, racism, conflicts among employees later results to decrease in production which directly affects performance of the organisations (Simons, 2011). This decrease in production prevents companies to produce new products which somewhere degrade reputation of company brands in market. IT firms like Apple, Microsoft, IBM and Wipro felt shortage of desired candidates in field of developing and designing. If we take another example, then blackberry is facing the problem of production.
From the above challenges, two main human resource challenges which are to be discussed properly in detail are:
Challenge1 - Issues in Recruitment
Private organisations of UK are facing many problems in recruitment field of Human Resource management. As per the current scenario, organisations are suffering from skill shortage issues. This generally takes place in industries related to engineering and digital sectors (Banfield and Kay, 2012). Due to this, companies do not get the right type of candidate and this creates delay in decisions as well as actions (Quintanilla and Ferner, 2003). This delay in decisions and actions leads to decrease in production and performance. They are facing problems in hiring top level talent in their organisations, which is creating wastage of resources and time as well. Many surveys show that recruiting the right candidate at entry level is quiet difficult task for industries. Nestle face issues in hiring 6000 candidates which later was sought out by forming recruitment team. During the time of recruitment, middle and top management is also facing the same problem at some points. Not only higher organisations but SME's are also going through the same issues (Cassell, Nadin, Gray and Clegg, 2002). SME's are backbone of the UK economy which is somewhere connected to higher industries, which leads to suffer them also. Many IT firms such as Abbot data store, Acxiom ltd are suffering from IT- related skills shortage which tends to delay in formation of new technologies, products and services. IT skill gap is most important factor in failure of IT industries (O'Meara, 2013).
This recruitment problem affects talent retention in private sector. Other issues in recruitment processes are:
1. In many companies, new candidates are hired by junior HR executives who lead to hiring of wrong candidate because they do not have proper experience. This creates wastage of time and money both (Butterfield and et.al. 2003).
2. Sometimes in SME's managers do referral hiring which prevents them from selection of right and desired candidates. Managers need to hire candidates according to their skills and abilities (Williams, 2007).
3. Social Media is playing important role in present time for recruiting the candidates but this type of recruitment is only worthy for creative agencies, event management companies not for higher brands and multinational companies (Sims, 2007).
4. Recruiting through job portals confuse companies in hiring right candidate because sometimes they call wrong person for wrong post which leads to mismatch and it creates loss to company (Mirata, 2004).
Proper strategies are used by different organisations to overcome the issue of recruitment. They use innovative and creative strategies to get rid from this issue (11 Must have recruitment Practices for HR Managers & Startup Founders, 2015). Each organisation has its own way to sought out this problem. The strategies are:
1. Undercover Recruiter: Companies are hiring undercover recruiters for recruitment of candidates. This undercover recruiter tries to know the skills, abilities and knowledge of candidates before hiring. They provide candidates a real world so that they can implement their knowledge and can show their potential. (Simons, 2011). It makes recruiters to know more about those candidates like how they take challenges?, their hidden qualities. For Example, First Merit Bank uses this strategy for recruiting the candidates. They hire a undercover recruiter who observes candidates by giving them tasks which helps them in knowing candidate's communication skills, convincing skills, other qualities, etc (Sims, 2007). If we take another example then the famous brand of cars Volkswagen also does same thing which help recruiters in knowing how candidates behave as employees and how they try to interact with customers.
2. Innovative Referrals: Many companies use innovative referral technique to hire new candidates. The companies like Carmax and Quicken Loan uses this technique in the form of recruiting strategies. Quicken Loans provide training and teaching to their employees about referral process whereas Carmax uses a blue jelly bracelet to attract employees towards the new opportunities in company (Greenberg, 2014). Other companies can also use such type of innovative and fresh strategies to hire skilled and desirable candidates (Reilly and Williams, 2012).
3. Offering Incentives: Companies try to attract candidates by offering them attractive packages (Recruitment agency advice: Two concerns for recruiters in 2015, 2014). Many multinational companies like Microsoft, Google provide attractive offers to their employees. This makes employees to work with full loyalty and trust. Attractive incentives, bonuses, etc. also helps in improving performance of employees which later helps in achieving desired targets (Philips and Edwards, 2008). These attractive offers increase number of candidates to participate in interviews which helps in selecting the right talented candidate.
4. Use of latest technology: Present time is totally based on latest technologies. Companies are using these technologies in handling their different processes and recruitment is one of them (Agarwal and Ferratt, 2001). There are many companies like SAP that provide ERP systems to integrate all the work of companies. These help in shortlisting the right candidate for right job. It prevents time wastage with less documentation. They can store resumes or cv's of candidate in database for future use. Deloitte use latest techniques for recruitment procedures like using social media, job portals and ERP systems to handle all documents properly.
1. Multitasking Gene: Companies like to hire those candidates who can do multiple tasks. They prefer those seekers who like to take initiatives. This makes them to understand the environment and functioning of companies more easily. Multitasking candidates also like to take challenges which enhance their confidence and decision making power (Recruitment agency advice: Two concerns for recruiters in 2015, 2014). Companies feel comfortable in changing the role and positions of such employees.
2. Talent over Experience: Talent is what companies want in their employees. At the time of recruitment, companies try to focus on talent and skills of candidate rather than experience. Companies like to hire new and fresh blood because somewhere they try to mould themselves as per the norms and functionality of companies and secondly they do not resist themselves from change (Dreachslin, Weech-Maldonado and Dansky, 2004). Experience brings expertise but it keeps old employees away from latest updates. So companies like to prefer talented candidates more rather than experienced.
3. Recruitment Timing: While hiring candidates, it is important for companies to focus on recruitment timing also. Recruiters try to formulate processes in such a way that it neither becomes too lengthy nor too short. As too lengthy processes results to wastage of time and money and too short processes leads to hiring of undesirable candidates (Headworth, 2015). MFI and land of leather use recruitment strategy in cost and time efficient manner.
Challenge2: Diversities in Organisations
The next challenge which is being faced by UK is diversity in organisation. Time is changing and with it face of UK is also changing. The country is facing diversities in many fields like age, sexuality, culture, disability, etc. It becomes very difficult task for private organisations to look after diversities. It is important to satisfy all employees regardless of age, culture, religion, etc (Human, 2005). Diversities in organisations results in conflicts which create competitive environment thereby leading to great loss. It is a big challenge for organisations to manage these diversities and to use them for profit (Dreachslin, Weech-Maldonado and Dansky, 2004). Diversities are more faced by large and multi-national organisations like Microsoft, twitter, Facebook, Google, etc because they have huge workforce with different functions and divisions. Professor Lynda Gratton of London Business School says that it is great to work with diverse team but it is difficult to manage them. Technology industries like twitter, Facebook are facing big diversity problem. Candidates of different perception, culture, gender work together for the success of organisation (Thomas, 2011). These differences sometimes lead to formation of grievances among employees and employer. These grievances create conflicts and disturbs friendly environment of organisation. Black and ethnic minorities used to face racism in private organisations of UK. The number of black people working in this country is less including organisations like channel 4 and Walt Disney as compare to other organisations. Ethical diversity is an issue which is generally faced by employees working here (Romanenko, 2012). The number of non-native citizen has risen in UK which increases the differences of culture, languages, educational background, etc. It is difficult task for any organisation to manage all differences and to make them work with peace, harmony and togetherness (Diversity in the workplace: an overview, 2015). It is important to provide equality to each and every employee.
Diversities need to be managed properly. With increase in these diversities in workforce, companies are formulating policies and programs in the field of recruitment, promotions and retentions (Thomas, 2011). These differences are taken as positive part of any organisation. There are different strategies which help in managing and maintaining the diversities properly and effectively. Some of these strategies are as follows:
1. Equality Objective: The main and important objective of any company is to provide equal rights to every employee without considering their differences (Gotsis and Kortezi, 2014). For them, both male and female employees are equal and possess equal rights. Companies will not segregate their employees on name of sex, age, religion, race, etc. They focus on the work of employees and results which they are providing to them (Romanenko, 2012). BBC uses this strategy to provide equal opportunities to every employee. They focus on potential of employees by looking beyond the diversities that organisation possess. Enterprise Rent-A-Car generally face gender diversity in their company which was solved by proper mentoring, communication and effective leadership for promotion of women.
2. Team work: Companies divide their employees into team, so that they can involve with each other and this method decreases the differences among them. They try to remove diversities through proper communications, meetings, and discussions (Human, 2005). This increase cooperation and coordination among them. Team work also results to innovative and creative ideas which helps organisation in achieving its goals. Ellen Pao vs. KPCB and Intel are using these techniques to make their employees feel comfortable, that helps them in accepting environment more easily and also makes their employees to know each other.
3. Training and Development: Companies provide proper training to their employees so that employees can improve their skills and abilities which decrease differences among them. Different programmes are organised by companies so that employees can know the culture and views of one another (Thomas, 2011). Training, broaden the thinking of employees which later decrease the conflicts among them. It makes them to think openly and broadly. Sharing effective services leads to improved performance which creates equality. This helps in maintaining the morale and motivation level of employees (De Vita and Case, 2003). IBM organizes many programs for building global workforce and to satisfy their different customers globally. Microsoft is providing sexual harassment training to employees to remove gender discrimination. More the diversity, company can attract more diverse customers towards them.
4. Encourage Interaction: Employees need to interact with each other to maintain relations and to know more about each other. This interaction helps in removing grievances which creates a healthy relation with supervisors and managers (Seven Steps to Effective Diversity Management, 2011). Encouraging employees to work on different background or role helps them to increase their communication skills and knowledge in that particular field. This strategy also helps in changing perception of employees regarding the work or role of their co-workers. This makes them to accept new challenges and to handle new risk which increases their confidence and awareness towards their responsibilities. Honeywell organize a diversity committee to handle such issues.
Along with above strategies, companies can take measures as mentoring, business etiquettes, business norms, value system and communication to handle diversities (Dreachslin, Weech-Maldonado and Dansky, 2004). These measures can also help in managing the diverse workforce. This helps employees to work on global level and to deal with different customers. It also impacts the motivation, morale and commitment of employees.
By following above strategies, diversity will not work as burden for companies and employees as well (Reilly and Williams, 2012). They can decrease discrimination which leads to increase talent and work efficiency of employees. Diversity management inspire organisations to work at international level.
1. In response to changing labour market, managing diversity will lead to long term success and maintain the cultural changes (Seven Steps to Effective Diversity Management, 2011). Coca Cola forms attractive offers to make employees talk about their new opportunities. This strategy attracts more candidates towards org