THE current economic environment and the outlook being given by economists will make it difficult for businesses to remain viable. They mainly forecast a difficult environment with exchange rate volatility and high inflation. Aggregate demand has been declining due to various factors.
These factors are creating several major human resources issues, including:
Attracting and retaining talent: In a competitive job market, attracting and retaining top talent can be difficult. This is especially true in industries facing skill shortages. The current economic environment makes the situation even more challenging, as employees are more likely to be concerned about their job security and financial well-being.
Managing costs: Companies are under increasing pressure to manage costs. This often includes reducing headcount or cutting benefits. This can lead to employee morale issues and productivity declines. From what we are observing, this trend seems to have started and is likely to be more pronounced in the first half of 2024.
Supporting employee well-being: Employees face several challenges in the current economic environment, including financial stress and job insecurity. Human resources (HR) departments need to find ways to support employees during this difficult time. The constraint is that companies in distress rarely have enough resources to support employees as their focus is on preserving cash.
Other major human resources issues that may arise from the current economic environment include:
Increased employee turnover: Employees may be more likely to leave their jobs for new opportunities with better pay and benefits. We are seeing an exodus of employees below the age of 45 emigrating to the diaspora. This affects middle-level managers and below, especially those with high technical skills in IT, finance, marketing and engineering. I am excluding the exodus from the medical field, which has been happening for a while now.
Reduced employee engagement: Employees may be less engaged if they are worried about their job security or financial well-being. Periodically, companies need to survey employees and check the level of employee engagement to enable them to take corrective action.
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Increased employee stress and burnout: Employees may be more likely to experience stress and burnout due to the increased demands and pressures they are facing.
HR departments can play a critical role in helping organisations navigate the challenges of the current economic environment. By focusing on attracting and retaining top talent, managing costs, and supporting employee well-being, HR departments can help organisations maintain a productive and engaged workforce. Here are some specific steps that HR departments can take to address the major human resources issues emanating from the current economic environment:
To attract and retain talent
Offer competitive salaries and benefits packages.
Provide opportunities for professional development and growth.
Create a positive and supportive work environment.
Be transparent and honest about the company's financial situation and prospects.
To manage costs;
Review and optimise hiring and onboarding processes.
Conduct regular performance reviews and identify areas where employees can improve.
Cross-train employees so that they can take on multiple roles.
To support employee well-being:
Offer employee assistance programmes (EAPs) and other mental health resources.
Provide financial planning and counselling services.
Offer flexible work arrangements and other benefits that can help employees to balance their work and personal lives.
Communicate regularly with employees about the company's financial situation and plans.
By taking these steps, HR departments can help organisations weather the current economic storm and emerge stronger on the other side. The truth is that things are not looking good, and companies must be ready to navigate the difficult challenges ahead.
- Nguwi is an occupational psychologist, data scientist, speaker and managing consultant at Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm. — https://www.thehumancapitalhub.com or e-mail: [email protected].