Exploring HR issues in the new economic environment Essay


Today every state is confronting challenges in the new economic environment. As the universe is altering rapidly, all administration whether it is little or large are holding HR issues because of the new concern challenges. It is really hard for companies to get by up with current market state of affairs. Recession has affected severely the whole universe every industry is holding difficult clip in the market.

Harmonizing to the National Bureau of Economic Research Recession is defined as a important diminution in the economic system which normally lasts for old ages and affects the industries, employment rate, existent income and the whole- retail trade. Many states like India, Brazil, Russia and China are coming out of recession but still there are so many states which are fighting due to the recession. As the states are coming out of recession there has been an disconnected addition in the demand. So every administration need to believe about the new solutions so that they can get by up with the new economic state of affairs. They need to concentrate on long term solutions as the economic conditions are still non stable. During current economic status companies are concentrating on cost film editing, and they were under- force per unit area to hold the right figure of employees in the administration. But as now state of affairs has been changed and companies are already coming out of recession they need to concentrate on long term solutions.

In this assignment we need to discourse that what all things the administration should make to get by up with current market state of affairs strictly on HR position.

Human resource direction is the system which is used to pull off the human endowment efficaciously and expeditiously so that the administrations jails can be accomplished. Different HR activities like choice, enlisting, motive, preparation and development, keeping are used by administrations to pull off the work force. As the concern environment changes the demand of the employee and employer besides changes consequently.

To get by up with the current state of affairs, administration is concentrating on cost film editing. Cost film editing can be solution for this job but it effectual for short term merely because cost decrease may posses many hazards for the administration. HR director should ever be cognizant of the hazards associated with it.

Human resource Management:

Human resource direction is a typical attack to pull offing people who are most valuable assets for the administration. Harmonizing to Mayo ( 2001 ) work force is considered as the intangible assets for the administration as their single part to the administration is different and variable. There are different HR patterns which are adopted by the companies harmonizing to their concern schemes so that the company can present high productiveness.

Strategic Human Resource Management:

Harmonizing to Rothwell, Prescott and Taylor ( 1998 ) now a twenty-four hours HR professionals actively take part in administration ‘s strategic concern program so that it can assist the company to pull more people, retain and develop the bing work force which is indispensable for the concern success in the current market topographic point.

Any resource can be easy obtained by the administration but the human resource is really hard to get. The sudden or the disconnected alteration in the environment has made the necessity for the strategic planning for HR.

Change in the economic system of the state has direct affect on the employment rate and the work force demand for the administration. When the demand is low companies chiefly layoff or fire the employees from the administration to cut down the overall cost outgo. But when there is some upturn in the economic system or the demand is high company starts engaging people to increase the productiveness. But this cost decrease program works merely for short term alternatively of making the short term program every administration large or little, public or private should concentrate on long term solutions by doing proper HR planning which helps in organizing different HR patterns. Through which administration can fix their work force to manage the duty even in crisis.

Harmonizing to Tony Grudy ( 1998 ) HR scheme entirely is non an effectual scheme. It should be integrated with the administration scheme so that the human resource may be managed to derive the competitory advantage for the administration. To hold the value and the competitory advantage HR scheme and the administration scheme should be aligned. Alliance of the schemes means to acquire the right individual with right accomplishments and right capablenesss to carry through the administration scheme. Without cognizing the companies scheme employees can non work to present the end product.

Alliance of HR scheme with administration scheme

Many states have come out of the recession and the administrations in these states are fighting to get by up the market state of affairs they are happening trouble in doing the scheme as the economic environment is altering often. As HR scheme is dependent on administration scheme the company should seek to do clear scheme so that the employees could work consequently for the company ‘s ends.

Issues- all administrations are altering the scheme harmonizing to the state of affairs and seeking to be advanced so that they can prolong in the market. In this instance the employees working get less engaged with the work because they are suited with the old on the job methods and if company adopts something new to prolong they find themselves uncomfortable to set with new methods followed in the workplace.

Solution: the administration can actuate their employees by affecting them in the strategic planning so that employees may experience secured and acquire ready to alter itself harmonizing to the demands.

Vertical and horizontal Integration of HR map:

Different HR maps help the administration to understand the market trends which straight affect the concern of the administration. Harmonizing to Rothwell, Prescott, Taylor ( 1998b:128 ) the administration can pull off the different patterns and develop the programs harmonizing to the current tendency in the market. Two types of integrating are:

Vertical integrating: it is the integrating of the different HR patterns with the administration civilization and the with the concern scheme of the administration.

Horizontal integrating: It is the integrating of the different HR patterns and the policies together.

So administration conditions large or little should to travel the rudimentss and seek to incorporate all its policies together.

HR planning

HR planning is done to acquire right figure of employees in the right topographic point at the right clip to acquire the rapid growing for the administration. Planning is done to pull off the human resource harmonizing to the demand of the administration and to hold the proper alliance of the HR scheme to the concern scheme.

Issue- All Organisations struggle when they have unequal HR planning that is chiefly because deficiency of skilled employees who are unable to implement the administration scheme absolutely or can be due to the improper use of the different HR maps.

Solution with deductions: So for the execution of the proper HR scheme HR planning should be perfect because it is really critical for any administration. As administration is non able to get by with the current state of affairs they should make following things like-

Make flexible HR program which can be changed harmonizing to the of all time altering environment.

All the employees of the administration should be involved in the planning procedure so that they can experience their importance and contribute to the program.

Proper alliance between concern scheme and the HR scheme.

Plan should be clear so that every employee can understand their function.

This will affect employees actively to lend for the concern and their morale can be raised. But if the employees are non involved than may experience defeated and demoralised which can straight consequence their work. Environment has great influence on both concern and HR scheme. For case Demographics ( refers to the survey of human population ) has great impact on the administration as it can be seen from the nose count information that immature people population is diminishing every bit compared to aged ( older ) people population. It can hold the impact on the all administrations as they can relinquish early retirement. As to get by up with state of affairs administrations downsize the employees by supplying the early retirement policy. But if early retirement is waived than it can profit the administrations by retaining skilled employees in the administration for long clip. It can hold negative impact besides it will increase the cost of the company in signifier of costs like- medical cost, pension cost etc.

So to hold proper HR planning administration must analyze the environment decently. If the HR program is right than it can assist an administration in calculating the demand of the figure employees that administration required for the specific undertaking and therefore they can be managed and evaluated on the footing of their public presentation.


There is ever job in Retaining and Resourcing people in the administration because it ‘s difficult to enroll right individual for the right occupation.

Recruitment is the procedure through which employer sell the occupation to the employees so that the administration can hold equal figure of the appliers.

Issue- To run into the demand many organisation need to enroll employees.

Solution with deduction – To hold possible employees in current market state of affairs all administrations can make recruitment through ‘Internal Recruitment ‘ this procedure is used to ask for internal campaigners ( i.e. employees working within the administration ) .

It can be less expensive

Money can be saved from the advertizement.

As employees will take up the station rapidly it can salvage the cost.

Employees will be familiar with the work environment and the administration civilization which will take less clip to settle down.

If an employee gets publicity through this enlisting it will be great advantage as it can actuate individual to work hard and acquire committed and engaged with the administration.

In the same manner it can hold negative impact besides

The figure of appliers will be limited.

Work force can be less diverse as people from outside are non invited.

New endowment or more possible employee can non make the administration.

Solution- To salvage the cost administration can besides enroll people from occupation Centres as – it can bring forth appliers easy as required for the occupation.

Job Centre besides provides free services to the employers.

But the negative impact can be like the Centre may bring forth the people who are non fit or interested for the occupation. So it can blow clip and cost as the administration will engage a individual who is non required.

Issue- In current state of affairs little administrations should retain their possible old employees who are truly lending and working hard for the administration ends.

Solution with deductions – But the issues with retaining the old employees is that they will wish to cognize about their hereafter position in the administration if they are lending, they will wish to hold clip to clip developing so that they can heighten their accomplishments and capablenesss. But this can be effectual for the administration besides if it provides equal installations to them than they can go more committed and engaged to the work.


To hold efficient employees administration should develop their interviewers so that they can carry on effectual choice procedure and pull off the effectual interaction with the employees.

As administrations are already fighting to get by up with the new altering environment they must look for more flexible, adaptable and committed employees. The occupation description given to new employees should be clear so that person can cognize the individual and the occupation description. There are several methods which are adopted by the administration they should seek to hold effectual choice procedure so that they can salvage cost in the long tally by puting one time on the procedure. But if the choice procedure selected by the administration is non an effectual one than they can endure by holding unequal employee for peculiar occupation and that be hazardous for the administration in current market status.

The altering nature of work and employment relationships

Due to the alteration in the economic environment there is alteration in the work within the administration which has resulted in the retrenchment of the employees ( i.e. cut downing the figure of employees ) which has increased unemployment rate. And therefore it has a great impact on the employment relationship. ‘Employment relationship ‘ is a contractual relationship between employees and employer which provides rights, duties and duties to both of them. The hiring and the fire of the work force at the same clip have negative effects on the employees and on the whole system. The two chief characteristics of the employment relationship are occupation stableness and occupation security which every employee wants from the administration.

Solution with deduction – So as the work is altering big administrations can blandish their hierarchies which can extinguish some of the occupations and can increase more team work so that they can salvage cost but it have negative impact like many employees do n’t experience comfy while working in flatter hierarchy system and if the system is flattered than many duties are handle by one individual merely who can acquire stressed by the work burden. And some employees do n’t experience good when they work in a squad because they want self- acknowledgment for their part in the work.

International HRM

Harmonizing to Scullion ( 1995 ) IHRM is the human resource schemes, HR maps which houses pursue when they globalize their concern. Organisation portion the same HR patterns but with more duties and it besides involves linguistic communication, civilization, economic, political system. When an administration gets globalise it has to confront many HR challenges and the jobs. It is really hard for the employees to set with different civilization, new societal and concern convection. And this straight effects the whole administration. Hofstede ( 2004 ) pointed out that the chief ground for the struggles in the administration is cultural difference between the employees. And most frequently employees get civilization daze which is the province in which employees feel uncomfortable and confused when they operate in wholly different cultural environment.

Solution with implications-

So to get the better of this administration should engage those employees who can easy acquire fit in different states civilization and attempt to get by up with that.

Employees should be trained and educated about the other civilization and societal convections

Employees should develop the communication accomplishments

But the negative impact is – it is really hard to engage right individual for the occupation.

Employees may experience place illness and can go forth the occupation if they do n’t acquire wagess or any sort of support which they are anticipating from the administration.


Administration chief concern is to achieve high public presentation through employees. To achieve high public presentation they need to give close attending on their employees to actuate them by giving wagess, inducements, leading, and the work they want to execute. Motivation is the method which can assist an person in presenting high consequences which is expected from the administration. Motivation encourages employees to set their attempts and abilities to accomplish organizational end and their ain demands.

Two different types of motive as given by Hertzberg et Al ( 1957 ) are-

Intrinsic motivation- this is self generated motive which influences the employees behaviour to move in a peculiar manner it may include duty, liberty ( i.e. freedom at the workplace ) , chances for preparation and developing their accomplishments and abilities.

Extrinsic motivation- this type of motive which done administration to actuate their staff to acquire peculiar ends from them it may include fillip, increase in the wage, publicity, congratulations.

Issue with solution and impact-

Different administration follows different ways to actuate their employees so that can be more productive but as the different administration are non in a stable position they can actuate their staff by giving intrinsic motive as they can make an environment in which employee can experience free and work hard for accomplishing their end and it has long permanent and deeper consequence on single as it non imposed on them by others.

But it can hold negative effects besides as single are different and behave otherwise some employees do n’t acquire acknowledgment or wages for their part they feel low and can acquire de-motivated. Some employees need cautionary motive for their work as that signifier of wages may be carry throughing thier basic demands. So it depends on every person.

But at this point of clip when administration is holding unstable province they can ever actuate their employees by giving them intrinsic motive and back up them so that they work hard.

Wagess are that instrument which can easy command the human behavior.

Training and development

To get by up with the dynamic on the job environment employees needs to update their accomplishments and capablenesss. So to be effectual and to do active part to the administration employees should larn and trained. It can besides be a positive motive for many employees.

Issue with solution and implication-

Every administration either large or little as they are coming out of recession they should seek to retain and better their accomplishment base by giving them developing so that they can get by up with market because effectual preparation will –

provide chance to the employees to link and acquire engaged with the administration

this can besides increase the cognition and do them competitory

can assist in heightening the accomplishments and capablenesss,

Properly trained employees can do better determination, if employee is given developing it can actuate, animate them to lend best to the administration.

But the negative deductions are like some little companies may non afford to develop their employees and they see developing as cost non as investing. But to prolong and derive competitory advantage administration should retain their employees and heighten their accomplishments this can be long term investing for the administrations.

As many little companies are fighting in the current market state of affairs than instead puting in enlisting procedure they can retain their skilled employees on the footing of their public presentation and put in their preparation so that they can execute multi undertaking and work for assorted occupations within the administration.

Problem with this thought is that it is difficult to judge employee and employee may non be ready to travel for preparation and either non ready to take several duties at the same clip.

Committedness and battle

Porter et Al ( 1974 ) , has defined committedness as the fond regard and trueness of an employee for the administration which can be increased and enhanced by actively affecting employees in determination devising actions.

Harmonizing to the institute of employment surveies ( Bevan et al. , 1997 ) battle is the positive attitude of the employees towards the administration. An occupied employees may work for the benefit of administration to better the public presentation.

Different HR patterns have impact on the committedness and battle of the employees towards the administration. As administration are downsizing the figure of employees so it has effected the committedness and involvement degree of the employees because they have fright of losing their occupation and if they are non involved actively in the administration they get detached and put less attempts. So to get by up with the current state of affairs administrations should seek to affect the employee in the different activities so that can experience secure and work hard for the administration. On the footing of the committedness employer and employee creates ‘psychological contract ‘ which is an unwritten outlooks shared between employer and employee on the footing of trust. This contract encourages both employer and employees to hold two manner communications and make strong sense of duty between both of them.

As the all large and little administration are fighting they find hard to make such sort of contract between them because employee is threatened about the occupation security and lacks trust towards the employer.


This assignment includes information about how organisation reacts to the current economic status and how they can aline the HR scheme and administration scheme to get by up with the state of affairs. Organisation should continuously measure the environment and act consequently so that they can do ends which can give them high public presentation and productiveness. The chief challenges which are faced by different administrations can be summed as high staff turnover, trouble in fiting the right employee for the demand, high absence rate because of emphasis, high enlisting cost, unable to pull off the HR program harmonizing to the fluctuation in the market. Problem in pull offing flexible working hours, they need multitasking work force. So to get the better of these jobs they are strongly suggested some solutions like they need to back up employees for the flexible working hours which can besides assist in deriving trueness from them and it can increase their morale. They need to pull off and be after the workforce on- demand which can salvage the enlisting cost. Maintain proper alliance between resources and the administration needs which can salvage the concern from unneeded cost and can hold effectual operations.