More than 75 per cent of HR budgets have either decreased or held steady, according to new study
HR departments are under siege, faced with the double edged sword of trying to attract and retain the best talent while at the same time cutting overall staffing costs, according to a new study.
“HR is often the first to feel the squeeze in financial and other resources,” said Cary Sparrow, a principal with Towers Perrin. “It’s easy to shift into a reactive mode and focus purely on cost cutting.”
Sparrow said the strongest companies use tough economic times as a chance to identify a shorter list of key activities that create more value for the business, and focus on doing those few things really well.
“An example would be working harder now to keep the company’s best talent engaged, in order to forestall the talent flight that often occurs when the economy picks up again and people have more employment choices,” said Sparrow.
According to the most recent TP Track Survey from Towers Perrin, retaining talent is still the number one people-related issue facing HR. Nearly 75 per cent cited retention of high performers as their main goal, even during a time of recession and general layoffs.
More than three-quarters said HR budgets had either decreased or held steady since 2001, with only 22 per cent reporting an increase in overall budget. Projections for next year seem somewhat brighter, with the percentage anticipating a drop in their budget declining from 46 per cent to 34 per cent and the percentage anticipating no change increasing from 32 per cent to 41 per cent.
So what can HR do to keep talent around? David Rhodes, a consultant in HR strategy and management at Towers Perrin, said the non-monetary aspects of the work environment are key during tough times. Things like career advancement and the challenging nature of work can keep your top-talent interested and focused, he said.
“Unfortunately, these are precisely the areas that typically get short shrift in the kind of down business cycle we have now,” said Rhodes. “Such times require additional discipline and education from both HR and senior leadership to commit to building the kind of culture that engages talent and makes top performers feel their contributions are recognized and valued.”
“HR is often the first to feel the squeeze in financial and other resources,” said Cary Sparrow, a principal with Towers Perrin. “It’s easy to shift into a reactive mode and focus purely on cost cutting.”
Sparrow said the strongest companies use tough economic times as a chance to identify a shorter list of key activities that create more value for the business, and focus on doing those few things really well.
“An example would be working harder now to keep the company’s best talent engaged, in order to forestall the talent flight that often occurs when the economy picks up again and people have more employment choices,” said Sparrow.
According to the most recent TP Track Survey from Towers Perrin, retaining talent is still the number one people-related issue facing HR. Nearly 75 per cent cited retention of high performers as their main goal, even during a time of recession and general layoffs.
More than three-quarters said HR budgets had either decreased or held steady since 2001, with only 22 per cent reporting an increase in overall budget. Projections for next year seem somewhat brighter, with the percentage anticipating a drop in their budget declining from 46 per cent to 34 per cent and the percentage anticipating no change increasing from 32 per cent to 41 per cent.
So what can HR do to keep talent around? David Rhodes, a consultant in HR strategy and management at Towers Perrin, said the non-monetary aspects of the work environment are key during tough times. Things like career advancement and the challenging nature of work can keep your top-talent interested and focused, he said.
“Unfortunately, these are precisely the areas that typically get short shrift in the kind of down business cycle we have now,” said Rhodes. “Such times require additional discipline and education from both HR and senior leadership to commit to building the kind of culture that engages talent and makes top performers feel their contributions are recognized and valued.”
