HR BulletinNews from Human Resources

Deloitte Czech Republic

In this issue

Topic of the MonthTake Advantage of the Current •Crisis

Articles by our specialistsAre Benefits a Necessary Evil?•Build HR that Means Business as •Business is HRHR Aspects of Call Centres•2009 – The Fight for Talent•HR Marketing through •a Marketing Manager’s EyesHR in a “shrinking” world•

EU fundsCorporate Social Responsibil-•ity Supported by EU Structural Funds?

SeriesHR Transformation•

Latest Trends in HR

Události HR Know How & HR Forum•Employable future II•Konference pro veřejnou správu •(Conference for public sector)

Dear Readers,

It looks like that year 2009 will not be an easy year for anyone. The financial crisis impacts the strategic decisions of each employer. In economic downturns companies face hard times and thus focus on lean operation to generate savings. And yet, they should be aware of the risk inherent in thoughtless and ill-conceived layoffs. To learn what can be done in times of financial crisis, HR managers can visit our Human Capital Services under Consulting at www.deloitte.cz or the Topic of the Month section of this bulletin.

In addition to articles published in HR Forum and other periodicals reprinted in the Articles by our Specialists section, in the Series section

we bring you the last part of the HR Trans-formation series by Michiel van den Berg. The EU Funds section brings news about the possibilities to cover social responsibility programmes from the EU funds. In the Latest Trends in HR section we provide information on the latest global HR trends. We have run several workshops and participated in confer-ences that are described in the Events section.

We welcome your feedback, comments, and suggestions as well as any new topics you would like to find in this bulletin.

Human Capital Advisory Services team

June 2009

The economy evolves in regular cycles which companies should consider in their long-term planning and adjust their activities accordingly. Times of prosperity and boom are followed by economic slowdown and recession. When enjoying prosperity it is good to get ready for future decline, stabilise revenues and keep cutting operational costs. When recession comes it is neces-

sary to alleviate negative impacts by taking advantage of strategic opportunities, adjust the corporate business model to the new circumstances and particularly retain and motivate talented and key employees who, as a result, will mean a competitive edge and drive value when the boom comes again. When facing recession most companies focus only on short-term and medium-term

activities neglecting long-term opportuni-ties which would allow them to improve corporate performance more significantly. Although the period of recession and crisis is unpleasant, it is an opportunity to think about efficiency, cost reductions and elimina-tion of activities adding insufficient value to the company.

The economic crisis and the HR depart-mentWhile in the past corporate downsizing and cost cutting were topics limited to companies which were unable to position their products on the market or faced crisis due to other reasons, in the last few months most compa-nies have considered these measures either for preventive or “rescue” purposes. Some companies have already started to downsize, others are planning to follow suit sooner or later. In January 2009 the unemployment index reached 6.5%, in the first quarter of 2009 the unemployment raised to 7% and according to analysts, it will continue to increase up to 8-10% in 2010.

At this time HR may not act only as an enforcer of “unpopular decisions” but, taking advantage of the crisis and recession, assume a more strategic role than it had before.

The HR Department is usually the first place for the company management to stop when seeking additional and immediate savings while facing economic downturn. Quick cost reduction opportunities include suspending various employee benefits and contribu-tions, cancelling corporate social events and downsizing.

This fact is proved by a Deloitte survey (Managing Talent in Turbulent Economy – Navigating a Course through rough waters), conduced in January and March 2009 in the USA. The chart below compares areas of focus of 391 global companies. The results of the survey show that companies focused on cost-cutting in the area of restructuring jobs, headcount reduction. Later, the focus shifted towards salary reduction, promoting early retirement and retirement contribution reduction.

Indeed, a number of companies have already taken this direction. Yet it is necessary to be aware of the medium-term and long-term effect of these steps as well as potential risk if ill-considered measures are taken.

This is the right time for HR to take the opportunity to become a genuine strategic business partner. HR has a unique chance to show and use their knowledge of employees and their key qualities but also of the retention tools and measures. Indeed, these key employees can help the company cope with economic, financial, produc-tion, organisational and other challenges of the current and coming times, preparing the company for future growth. The eco-nomic cycle has not stopped for good, the economy will grow again.

Take Advantage of the Current Crisis HR in Economic Cycles

Topic of the Month

Preparation for the timesof prosperity and theeconomic health

Preparation the inevitabledownturn

Alleviation of negativeimpacts by taking advantage of strategic opportunities

•Costreductions•Adjustmentstodemand•Identificationandreductionofrisks

•Goodfinancialmanagement•Opporutunitytobuyrelativelycheapassess

•Reviewandre-designofthebusinessmodel

•Strengtheningofmarketing

•Highproductivity•Attractingandretentionofkeyemployees

•Revenuesstabilisation•Operationalcostscutting•Crisisplansandrecoveryplans

Econ

omic

cyc

le

TimeGoal Solution/tools

Prosperity/Boom

Prosperity/Boom

Expansion

Crisis

Recession/ decline

Are HR managers ready for a changed role? In the past few years, HR managers have made efforts to get rid of the “service function” label, hence becoming a strate-gic partner of the company management. HR departments have sought to convince the company management that their role in the company is or should be of greater value than mere employee data administration and servicing of employee cycle from workforce planning, recruitment, development, evalua-tion and remuneration to terminations. Who else in the company should be capable of

answering basic questions such as “where and how do we acquire qualified staff; how do we prevent high employee turnover; how do we retain key workforce segments; and how do we approach underperforming employees?”

As the downturn continues, companies are forced to continue with cost-cutting activi-ties. Further headcount reduction waves cut deeper into organizations and selection is more difficult to make. Are HR managers able to provide relevant data and information to managers who make decisions on who to

release from the company? Even very expe-rienced employees with the capabilities and skills needed who are in key positions, are at stake. Not only skills and performance but also the role necessity forms the basic factors for headcount reduction decisions. The results of the Deloitte survey indicate a change in criteria used to assess the employees. At the beginning of the year, managers made final decisions based on the role neces-sity; however, later they focused as well on the tenure in organization, compensation level and promotion potential.

Topcriteriaformakingworkforcereductiondecisions

Source: Deloitte - Managing Talent in Turbu-

lent Economy - Navigating a Course through

rough waters, 2009

Source: Deloitte - Managing Talent in Turbu-

lent Economy - Navigating a Course through

rough waters, 2009

TopcriteriaformakingworkforcedecisionsMarchvs.January

39%

32%

29%

25%

23%

19%

17%

38%

35%

52%

28%

31%

23%

18%

21%

15%

39%

35%

Restructuring jobs

Headcount reduction

Bonus reduction

Promoting early retirement

Hiring part-time employees

Benefi t reduction

Salary reduction

Using offshore or outsourced employees

Retirement contribution reduction

March

January

47%

18%

16%

16%

16%

13%

12%

11%

9%

6%

0%

45%

43%

55%

12%

12%

16%

7%

9%

7%

16%

8%

8%

3%

53%

60%

Skill capability

Past and current performance

Role necessity

Compensation level

Tenure in organization

Leadership potential

Tenure in position

Retirement proximity

Promotion potential

Business unit

Location/region

Cultural fi t

Other

March

January

What areas to focus on? It is important to offer the top management not only a quick but also a well-thought-out solution. In looking for savings potential it is important to consider not only cost cutting opportunities but also ways to increase over-

all corporate efficiency to manage workforce including their performance and motivation particularly in time of downsizing, and how to optimise cooperation with employees so as to help the company to achieve its strategic goals under adverse economic conditions.

Hence, in planning your HR priorities and activities, consider them in the context of their direction, benefits and timeline as illus-trated below.

The following table provides examples of activities which the HR department should address under short-term, medium-term and long-term objectives.

Identificationofpersonalcostssavingspotential•Analysisandoptimizationofpersonalcosts(salariesandbenefits,•learninganddevelopment)AnalysisandoptimisationofHRservicesproviderscosts•

HRbusinesscase•ProcessandorganizationaloptimizationofHR•HRinformationsystemoptimization•Totalrewardsandperformancemanagementsystemoptimization•Increasingofsalesteamsefficiency(SalesForceEffectiveness)•Outplacement•

HRStrategy•HRTransformation•Keyworkforcesegmentsmanagementandmotivation•Performancemanagementsystemtransformation•Managerialskillsdevelopment•Corporateculture•Talentmanagement•

20%

HRsolutions

Lenghtoftime(inweeks)

Potential savings according to Deloitte‘s experience

Projectsfocusedon

higherefficiency

Projectsfocused

onsavings

Transformational

>20%

Medium-term

10-20%

Operational

5-10%

Improv

emen

tofthe

com

pany

resultsin

%

10%

4 weeks 12 weeks 24 weeks 48 weeks

Short-term activities aimed at reducing internal and external costsTiming: up to 3 monthsCorporate performance improvement: up to 10 percent

Identification of personal costs savings potentialDo you spend too much on salaries and benefits without getting back the required return such as performance or motivation?

Analyse and optimise personnel costs and identify savings potential. Define your rewarding and moti-vation strategy for individual employee segments – define what you want to reward them for.Evaluate how demanding individual positions are and establish adequate salary grades. This will allow you to monitor remuneration on individual positions transparently and benchmark it against salary grades on the market. Use performance-based rewarding system aligned with performance evaluation in a transparent way. Identify activities which you are able to cover by, for example, part-time work. Identify whether your benefits portfolio is well-established; evaluate the efficiency and adequacy of benefits and focus on their tax optimisation.

Analysis and optimisation of training and development costIs your spending on training and development efficient?

Analyse training and development costs. Focus on the benefits of training and development activi-ties and their alignment with the needs of the company. Think about skills and capabilities required from key and other employees. Diversify education for individual positions and employees so as to educate them in those areas which are important for the company. Focus on alternative methods of development (internal training rather than external training, coaching and mentoring by experienced colleagues, internal work groups and project teams, etc.), possibly on alternative sources used to fund training/development activities. Do not forget to align your training activities with other HR processes in the company such as evaluation and measurements of return on the development investment.

Analysis and optimisation of HR services providers costsDo you provide HR services internally or do you outsource certain HR services such as payroll, recruitment, etc.? Are these services efficient?

Identify costs of individual HR processes and benchmark it against the fees of external HR service providers. Assess the efficiency of these processes and propose measures to optimise costs.Consider all advantages and disadvantages of HR services outsourcing; focus mainly on the administrative burden associated with them, possible risk on the part of the supplier, and define your savings expectations.

Medium-term activities to streamline processes and infrastructure and optimise internal sourcesTiming: up to 6 monthsCorporate performance improvement: 10-20 percent

Process and organizational optimization of HRDoes your HR department provide high-quality and efficient HR services? Is your HR team able to cover all requirements by top management, line managers and regular employees?

Optimise you HR department in terms of its processes and organisation. Focus on the utilisation of individual positions within the HR department and on individual processes in terms of their efficiency.Benchmark the available work pool allocated to individual processes against indicators relating to the organisational structure, employee headcount, services provided and activities of peers. Identify bottlenecks or improvement opportunities. Propose or optimise indicators (KPIs) to measure the performance of individual HR processes, and principles of the motivation system applicable to HR employees.

HR information system optimisation Do you use your HR information system (HRIS) efficiently? Do you really use all the functionalities you are paying for?

Focus on optimising your HRIS and carry out a cost analysis. Analyse all HR activities and assess whether you can support them or decrease their number by using functionality available in your HRIS modules. Verify whether employee personal data are part of the centralised database and whether HRIS is interlinked to other modules within the company such as financial or assets modules, etc. Verify how HR employees work with HRIS, and whether they are sufficiently trained in all procured modules and how they use them.

Optimisation of total rewards and review of the employee performance management systemHow is corporate performance aligned with employee performance and their remuneration? Is the remuneration system fair, competitive and truly motivating?

Optimise total rewards. Review the performance management system so as to be able to distinguish employees whose performance is average, under-average and above-average, and use it as a basis of their remuneration. A well-established process of determining objectives and performance measures and their subsequent evaluation up to the level of individual employees provides the company with key input data for other HR processes such as remuneration, career management, workforce planning or training and development. Thanks to the performance management system it is possible to increase efficiency of both funds and human resources allocated to most of the activities and processes performed by the company.

Increasing sales teams efficiencyAre your sales teams efficient? Do your sales people have appropriate skills? Does your sales team report high employee turnover? Are your sales people sufficiently motivated?

Focus on improving the efficiency of your sales teams by optimising the sales process and organisational structure of the sales network, and by optimising the sales people’s remuneration and motivation system and the development and training system covering the sales area.

OutplacementHow does your company approach employee downsizing?

If downsizing is inevitable, use outplacement programmes and help employees cope with their difficult situation. By doing so, you will promote the positive image of your company to other employees and strengthen their confidence in the company.

Long-term transformation activities aimed at increasing efficiency and updating the corporate strategyTiming: approximately 1 yearCompany performance improvement: more than 20 percent

Key workforce segments management and motivationDo you think about growth opportunities of your company? Do you have enough skilled people who will help you grow? Are other companies wooing away your key employees?

Identify employees with high potential at all organisational levels and key employees whose skills are hard or very expensive to replace. Focus on these particular groups of employees and find out what motivates them to deliver high performance and stay with your company. Adjust motivation programmes for these key employees; your return on this investment will be the ability to more quickly overcome the crisis and successfully start a new economic cycle.

HR StrategyIs your HR strategy aligned with the corporate strategy? Are your HR processes effective? Aren’t your managers burdened with HR administration?

Review or design a new HR strategy in cooperation with other managers, which will reflect your business needs and be aligned with long-term corporate objectives. Analyse your HR processes and propose their redesign so as to make HR activities more efficient and devote saved time to projects which HR managers see as priorities. Think about whether you provide managers with value-adding services or whether all you provide is administrative support.

Leadership developmentDo your managers have sufficient managerial skills? How do they manage their subordinates, projects and costs?

Keep or restructure your budgets for development activities; while you will be under pressure in this respect, it is highly desirable to convince the management that firms will struggle for talent on the labour market and thus the company is not in the position to stop developing its employees. Review your training and development system so as to develop those skills of employees which are really needed by the company. Introduce the system of differentiated development; focus on individual development activities such as mentoring and coaching for selected employees who are good prospects for the company in the long term.

Talent management and workforce planning Do your key employees leave the company? What is your demographical situation like? Will your qualified staff retire in the near future?

Introduce a workforce planning system and talent management program. Consider up front possible departures of your employees and their potential replacements. Identify successors internally or start looking around on the labour market well ahead of time. There will never be enough skilled people with high potential and their numbers will keep decreasing due to the current demographical situation. This is a good time to recruit high-quality candidates. At the same time, use your time to develop your current employees who will help you, together with new hires, to lead the company out of the crisis and increase its chances for fast economic growth in the coming period.

Corporate culture What is your corporate culture like? How do you keep your employees informed and how do you introduce key changes to them?

Build a strong corporate culture as a key “link” between employees and the company and as an important retention factor. Strengthen internal communication. Design a communication plan for the coming period; revise it in cooperation with the company management to reflect the latest developments in the company; organise regular meetings with employees and inform them of the company’s latest results and development. Use other communication channels to inform employees like leaflets, boards, opinion leaders in the company, etc.

Articles by our specialists

Almostallcompaniesperceiveemployeebenefitsasanobviouspartoftheemploy-ee’stotalrewards.Companiesofferbenefitsmainlybecausetheyaremoretaxefficientthancashrewards,attractnewemployeesand,lastbutnotleast,helpkeepupwithcompetitorsandretainkeyemployees.Theskillofworkingwiththebenefitmixeffectively,however,sometimeslagsbehind.Indeed,onlyafewcompaniesseebenefitsnotonlyascostitemsbutalsoasaformofinvestment.

Most companies that provide their employees with benefits focus primarily on “traditional” benefits which employees are used to and whose absence would pose significant problems for the company in recruiting new employees and retaining existing ones. Accordingly, omitting this group of ben-efits can be rather dangerous. It is hard to imagine, for example, that employees would not be annoyed if their employer made no contribution to their meals. Hence, the stand-ard benefits such as meal vouchers or in-house catering services, contributions for sport activities or cultural events or contribu-tions to pension or life insurance, etc. can be considered cost items.

Employees Vary and so do Their WishesUnlike the employee’s cash compensation, the size and value of benefits are not influ-enced by the employee’s performance. While benefits do not directly motivate employees to higher performance they can or ideally do have a stabilising effect.

Anything that the employee can use or be pleased with can be perceived as a benefit. Hence, recognising employees’ needs is para-mount in designing a range of benefits which employees will truly appreciate and speak highly of among their friends. For example, programmers, who usually like working from home and do not like formal relationships when at work, will be fond of benefits such as working from home, an informal party rather than a company-wide ball with clients or a paintball game with colleagues organised by the company.

Such non-standard benefits usually do not fit within the broad offering of the “cafete-ria system”. Therefore, we should listen to

employees, approach their needs flexibly and seek their feedback. We do not want to get carried away about a “flawless” benefit which, however, is not attractive to more conservative employees. The higher admin-istrative/time load invested by the company should always result in satisfied employees who “like their firm”.

Four SeasonsAround the holidays, some employees may worry that they will not have time to buy presents, bake cookies and prepare for the holidays because of their work obliga-tions. The solution is simple enough. For example, you can offer your employees the opportunity to order Christmas cookies on the intranet and have them delivered to the office, or offer house-keeping services for selected groups of employees.

In the flu season, employees will surely appreciate a bowl of fruit in the kitchenette. The employer can benefit from this as well by having a lower illness rate at a relatively low cost.

It is no big surprise that people have a hard time delivering superior performance on Friday afternoons when it is hot, the sun is shining and they daydream about going to their cottage. Why not let people leave earlier from work on Fridays so that they can make it to their cottage before rush hour? While the benefit cannot be introduced in all companies, it would pose problems especially for manufacturers; many others could easily adopt it. Indeed, if you do such a favour for your employees, they might surprise you with superior performance and commitment at times when you need it.

All year round, the company can show interest in its employees and make them feel appreciated, for example, the company can give employees little presents like chocolate Easter Bunnies, congratulate them on signifi-cant anniversaries or organise thematic fun events on special days.

Benefits at Every Age People’s preferences change over time and thus benefits offered by the company should be driven by the employee age structure. The benefit mix is likely to differ in a firm

where younger employees prevail than a firm with a significant group of employees approaching retirement age.

In addition to the commonly offered mobile phone or notebook, a university graduate may find it useful to get a clothing con-tribution to buy a nice suit and surely will appreciate, more than others, company parties, sport activities or a chance to buy specialised books for better prices.The “baby boom” generation of the 70s has grown up and young families with children have become a big issue for employers. Many of them commonly contribute to/run child care centres, pay baby-sitters for managers, organise St. Nicholas’ days for children and their parents and provide more days of paid leave.

Employee care does not necessarily need to end with retirement. To build their image some companies provide certain benefits to their retired employees such as an oppor-tunity to continue their cooperation with the firm, sending the corporate magazine to their home or a discount for company cater-ing services.

Given that most companies usually employ more than one age group and that all employees must be treated equally, the sim-plest solution seems to be the cafeteria system where all employees have the same number of points and it is at their discretion what they spend them on.

Promotion of Employee BenefitsEmployees often do not know what benefits they are entitled to or what they should do to be able to start using the benefits. Whether we decide to go for traditional or non-stand-ard employee benefits, we must do our best in “selling” them to the employees and keep employees interested by providing them with access to the necessary information and sim-plifying the administrative process associated with the of the use of benefits. The compa-ny’s skill in promoting the provided service or product as a benefit often matters the most. Indeed, no matter how great the benefit is if we do not communicate it to our employees, the benefit will ultimately fail.

Are Benefits a Necessary Evil?Věra Čermáková, published in HR Management, November 2008

Nowadays,everybodyhasheardofDaveUlrich,many-ifnotall-HRDirectorsarespeakingaboutHRbusinesspartners,CentresofExcellence,andstill…stillbothbusinessandHRarenotonthesamepage.OnlyveryfewcompanieshavemayberealisedwhatprofessorKjellNor-dström1simplycalls,“HRisbusinessandbusinessisHR.“

The global trend in HR is building an HR func-tion around three core roles:

1. HR as a business partner;

2. HR as an expertise centre on people man-agement topics; and

3. HR as a centre that processes all transac-tions and data to comply with internal and external legislation.

Some companies keep the transaction and administrative part of HR in-house where oth-ers choose for outsourcing. Some companies’ buy-in expertise HR services when it comes to mergers & acquisitions, labour law, recruit-ment, management development programs, etc. Again, other companies have chosen to build their own centres of excellence. We also see companies that several years ago out-sourced the administrative and transactional part of HR and now do these tasks again by themselves as technology improvements have enabled them to do these tasks at the same cost level as outsourcing companies.

Building on What HR is Already Good AtThe global trend in HR is the same as what we did in HR 40 years ago, and that is improving the internal HR function to deliver better services to the business. And so we do, we provide indeed better HR services to the business. HR departments are constantly improving and optimising their internal HR processes. They have to as competitors do the same. Efficiencies are sought and found in reducing paper distribution throughout the company, in using ICT means, in reor-ganising work activities and responsibilities, in cutting duplicative activities, and in giving managers HR work to do.

The HR experts have been working in past decades on HR services such as performance management, competency management, total rewards, and more recently talent

management. In most companies these HR services have proven well; only at a couple of companies have such HR services been designed too complicated to work properly at all.

Most companies have created HR business partners roles. The HR business partners are typically attached to the management and assist these managers in people manage-ment topics with shorter and/or longer term impacts. Their work focuses on individual people issues, team motivation, workforce planning for the forthcoming year, or performance-based pay-outs to employees.

Managers have become more and more responsible for executing people manage-ment tasks. In this, perhaps, lies the paradox. It is the business that is HR. So, what about getting more responsible?! The business is responsible for HR. It is the leadership and line management that are both the custom-ers as the final responsibility-takers when it comes to HR. This means that another trend of measuring the internal value HR creates for the company whether it is at bottom-line or motivation and development of employees is again just one side of the coin.

Influence, impact and monitoring of HR serv-ices that really can create sustainable value only then starts when HR acts and thinks from the shared values, beliefs and goals of those that receive its service.

Add HR Value Where It Really MattersAs it is for business, so it is for HR. There is no longer any reasonable period of time where the introduction of new products, services, technologies, market (niches) leads to ‘last-ing’ competitive advantage. All companies can develop and implement a performance management process, do online recruitment, and support HR processes with electronic workflows and documents. The business play-ers that are able to create value in the ever changing world are those that

set-up the right business models for spe- •cific markets and products;

create, build and maintain the right •relationships with vendors, customers, and even competitors (think for example of business concepts like “crowdsourcing”2 e.g. IBM’s Eclipse platform); and

are able to continuously maintain •an organisation that is able to create an environment where everybody co-operates, talents feel attracted to, people create and share (creative) ideas and all strive for improvement.

What does this mean for HR? Sure, it means HR needs to get the basics right – put integrated HR processes and services in place that support the company strategy. How-ever, it foremost means we must understand business and think like the business. As a key distinctive factor in competition is people’s ability to lead, make decisions, act, co-operate, build and maintain relationships. This implies HR needs to work on topics like:

Support management and employees •throughout change processes. Change is an on-going process and so are the levels of resistance and motivation. HR can help by identifying the people that influence these levels of resistance and motivation.

Stimulate and engage leadership that •is able to create an atmosphere where employees can act candid and open-minded. That is, recognise the intellectual and emotional needs of people, stick to promises, explain, and create the right mindset and expectations about what is coming.

The HR function needs to focus on those aspects that develop and motivate people, support organisation change processes and develop leadership. HR supports and leads the business in the analysis of what is hap-pening, what can be done and what are the consequences of these actions.

What is next in the international develop-ment of the HR function? Leading companies are talking about splitting HR operations and expertise from the HR business partner role. Both are absolutely essential for business suc-cess, though each in an entirely different way.

Build HR that Means Business as Business is HRMichiel van den Berg, published in HR forum, December 2008

1 Professor at Stockholm School of Economics and author of books such as “Karaoke Capitalism” and “Funky Business Forever”. 2 Examples of companies pioneering with “crowdsourc-ing” business concepts are: Procter & Gamble, IBM, LEGO.

Ascallcentresarebecomingapartofmanyorganisationsandcallcentrestaffnowmakeupalargeportionoftheiremployees,themotivationofcompaniestomovesalesandsalessupport,complaintsandproductservicesintothecompanystructureisclear:keepprofitablecustom-ers,savecosts,improvethequalityofcustomerandemployeeservices,andimproveprocessefficiency.However,inspiteofthemanyadvantagesresultingfromthesearrangementscompaniesarealsosuretofacechallengesatlevelsthatdonotrelatesolelytotheiremployees.

Communication with customers and employ-ees is increasingly driven by information and communication technologies, which place new demands on all “stakeholders” including employees, line managers and senior manag-ers. Call centre staff must know the offered product or service, master work with IT, and also excel in communicating with customers.

Demands Placed On Call Centre StaffIn addition to having comprehensive knowl-edge of a company’s products or services, as well as technical and communication skills, Call Centre employees must be able to handle a designated number of calls, e.g. twenty calls per hour. When speaking with custom-ers, the employee must be able to answer questions professionally as well as assess and deal with common and uncommon situa-tions. After ending the call, the employee must be able to correctly follow certain administrative procedures and enter customer data into the electronic system.

When hiring call centre staff several key qualifications should be met. Great emphasis is placed on an employee’s personality and mental toughness. Psycho-diagnostic tools can be used to help reveal certain qualities including emotional stability, stress resistance, ability to follow rules, flexibility, steadiness in behaviour, motivation, and the ability to learn. Voice capabilities fall among the most important aspects and can be tested during the interview. Candidates who have articula-tion or phonemic disorders such as uvular pronunciation of R, clipping, a nasal twang, or even, according to the latest studies, a strong local dialect, should be eliminated during the interview stage.

Following the interview, communication skills are the next to be tested. We should keep in mind that only 7 percent of infor-mation is communicated verbally – more than a third (38%) of information is com-

municated via paralinguistic means such as voice quality, emotion, conversation style, rhythm, intonation and stress, with the rest being communicated nonverbally. Hence, it is imperative that call centre staff have both exceptional verbal and aural skills when dealing with customers. Call centre employees must be able to identify how to approach the customer and effectively handle the inquiry by merely hearing the customer’s voice. Over time the skills and capabilities of call centre staff are developed in introductory and follow-up training courses.

Demands placed on call centre managers largely relate to leadership and motiva-tion, quality assurance and monitoring, and performance evaluations. Most managers are recruited from among the best call centre operators who show management potential and excellent organisation skills. Call centre work is tedious and thus the manager’s main role is to effectively motivate people so that superior services are delivered. In addition, managers listen to and review operators’ telephoning on a regular basis and provide them with feedback. They also evaluate the operators based on the operator’s per-formance (each call centre operator usually has a designated number of calls to handle), plan introductory and repetitive training, deal with inquiries of problematic customers, and handle uncommon situations. To keep people highly motivated and enthusiastic, team man-agers organise different intra or inter-team competitions and award the best call centre operators. Alternatively, together with HR and internal trainers, team managers also organise regular team building and social events.

Operator Training and EducationA call centre operator’s work is psychologi-cally demanding and very tedious. After two years, most operators either move to a senior or different position within the firm, or leave the company. In this regard, the employee train-ing package should be aligned with the overall corporate strategy. If the strategy is aimed at selling as many services as possible and provid-ing superior services, the training strategy needs to focus on selling skills and tactics, as well as providing the operators with comprehensive information on the products and services, and delivering superior quality service and advice to customers. Training needs can be identified based on position analyses, surveys, information from managers and executives, performance results and the labour market. Information can also be obtained from job and employee related data such as qualifications, training, attitudes and opinions.

To achieve the desired results, the train-ing system must be carefully planned and customised to the company’s target groups. New hires are usually trained in corporate products, administrative processes, databases and systems, communication skills including uncommon and problematic situations, active listening, and business negotiation strategies and tactics. Follow-up training often focuses on assertiveness, recognising and protection against customer manipulation, and revising acquired skills. Internal lecturers usually deliver introductory trainings while external experts provide follow-up courses. Introductory and product training generally takes place during working hours with outdoor team building initiatives taking place during the week and also over weekends. Coaching, listening and feedback, new hire training, and instructions and rotation take place at the workplace. Lectures, discussions, workshops, assessment centres, case studies and outdoor activities, however, take place outside the office.

Training is provided either as e-learning, e.g. training in simple products or services or repetitive training courses, or as one-off courses. A one-off training course can also be organised on an individual basis, e.g. when an operator keeps making the same mistakes or needs to improve communication when dealing with a problematic customer. If provided in time, such training is extremely beneficial for the operator.

To plan call centre staff training effectively, the operator should first of all receive introductory and technical training. Then, in the next year or two, the operator should be closely monitored and trained to maintain the required call quality, the knowledge of products and services and the skills to deal with uncommon situations. After two years, the operator usually moves to a senior or dif-ferent position within the firm, or decides to leave the company.

Controlling and Evaluation The evaluation process and salary of call cen-tre staff is very specific which differentiates it from other working activities. Evaluation parameters are precisely defined and, if controlling is set up efficiently, quantitative and qualitative data and process indicators of employee performance can be measured:

(1) Utilisation usually measures the percent-age of time spent effectively, i.e. the actual amount of time spent in direct contact with a customer; the minimum utilisation can be set, for example, at 65%.

HR Aspects of Call CentresIvana Gogelová and Monika Benešová, published in HR forum, January 2009

(2) Performance measures the quality of activities with a direct link to the premium salary component; to track quality, the Six Sigma approach can be applied.

(3) Compliance observes the employees adherence to corporate processes and rules, mainly compliance with respect to the Information Protection Act, attend-ance, corporate system log-in, etc.

Performance can be defined in different manners based on: a set period of time, one which is frequent such as a period of time during which call centre employees must complete a given task; the number of operations per time unit; and the evaluation of calls resulting from the supervisor’s review of the operators’ calls; and the percentage of inquiries immediately resolved for the cus-tomer, i.e. first time resolution.

The overall annual performance evaluation serves as a basis for total awards – the base salary component and the variable compo-nent and bonuses – and the preparation of the employee’s development plan.

The newspaper headlines in the last months of 2008 and the beginning of 2009 surely fright-ened every employer and employee. While the situation in the Czech Republic did not seem very dramatic in the middle of last year, it presently appears that over 15,000 people lost their job by the end of 2008 or will soon lose it due to the economic and financial downturn. Yet, the situation should not only be perceived in negative terms; positive aspects must be sought as well. Some managers already try to see the benefits of the situation, i.e. the labour market will be leaner.

People are the key to survival in hard times! When unemployment grows searching for new employees is less difficult. Qualified people start appearing on the labour market in greater numbers. While it was sometimes a Herculean task to find suitable employees in some industries or branches in the past, a wide range of candidates are available today. Companies should, however, seek and demand employees who meet their new needs. What should they be like? Top manag-ers currently look for employees who will help them deal with the major economic, financial, , organisational and other challenges they are facing today and anticipate in the future.

Companies which put a talent management3 programme in place will have a competi-tive advantage over others. The programme helps develop employees who are able not only to ensure current successful opera-tional efficiency of the company but also to overcome its future problems and sustain growth. . These companies will soon harvest the “fruits” of their effort. But why exactly is talent so important? In the corporate world, as you know, “talent” is defined as:

An employee who has high potential and is •well qualified for further career growth in new areas;

An employee whose share in corporate •performance is higher than required and the value he/she creates for customers and shareholders exceeds expectations.

Indeed, it is talent who can help companies survive the crisis “safe and sound”. A direct relation between talent management and organizational performance and capacity has already been proved. The lack of qualified employees hinders the company’s ability to launch required innovations and respond to hot issues promptly.

Do we take good care of our talent?Are we in danger of losing our talent particu-larly in hard times? Before we speculate further, we should establish a possible case. Although the financial crisis is expected to impact the public sector too, a number of large-scale public engagements and projects are being planned. Hence, the public sector can become attractive not only for companies to implement projects but also for their employees working on the projects. Indeed, talent from the private sector can get an offer to play a key role in a major public engagement. Thus, soliciting employees from the private to the public sector, which until recently had been unthinkable, may become reality. Employees might prefer secured income, challenging work and use of their capabilities, skills and knowledge, which the private sector might not be able to offer them this year.

While this example can be hard to imagine for some people the fact is that talent will be demanded regardless of the type of industry. The main challenge for most companies in 2009 is to survive the economic crunch suc-cessfully and, in terms of the labour market, retain and possibly acquire new talent. The question is how to actually do it? The key rules which should be followed by organisa-tions seeking to develop successfully and retain their talent are as follows:

Develop employees in ways which enforce •their capabilities, skills and knowledge;

Deploy employees to allow them to use •their capabilities to the maximum;

Connect employees with people who can •help them achieve designated goals.

How can a company motivate, retain and possibly acquire new talent, particularly in the present environment? Although most companies will cut their HR budgets, the role of HR managers today is to persuade the management that such activities should be targeted or funds should be transferred to other important areas.

A few tips to retain and possibly acquire talent who will help the company overcome the crisis successfully and manage its success in the future are provided below:

Review the existing compensation •system. Assess to what extent the current compensation model meets the employees’ expectations: Do you pay your employees based on their performance or the length of their employment? Does your benefit system actually stabilise and motivate talent?

Focus on the performance management •system. Assess whether your performance management system indeed motivates your employees: Do managers know how to work with the performance manage-ment system components such as setting up goals, evaluating objectives, motivation, coaching, etc.? Does the performance management system encourage or discour-age your employees?

Use targeted educational and devel- •opment programmes to motivate employees. While you will probably not be able to influence education budgets and will need to cut them do not forget

2009 – The Fight for TalentLucie Veselá, published in HR forum, February 2009

3 A set of processes, programmes and technologies customised to enable the participating employees to maximise the use of their working potential in achieving the best results and adding value to the company.

to prepare career and development plans. When discussing future development with your employees, offer them learning and development plans to show your interest to retain them. Employees will feel more confident and regarded as active team members, which encourages the overall corporate morale. In developing employees you can focus on “less expensive” forms such as mentoring.

Promote talent and let them excel. • Give talent the opportunity to excel in the hard times of your company. If it possible, pro-

mote the most talented employees and let them manage a key project where they can demonstrate their capabilities and skills.

Do not forget this is the right time to •hire new employees. Indeed, at present, the labour market is growing before our eyes. Therefore, take this opportunity and get the best “catches” which the others let go because of their incorrect HR approach. Newcomers bring “fresh air”, new ideas and experiences and enrich the corporate environment.

While you will probably not be able to avoid HR budget cuts and savings, always think twice before you act and keep in mind that the economy will recover sooner or later. Will you be ready for growth with high quality employees who will lead you to success? Your current decisions will directly impact your future. Before you make such decision make sure you will be able not only overcome the crisis now but also to grow in the future.

HRandmarketingareincompatiblecon-cepts.Whilemarketingisallegedlyaboutadvertising,pressureoncustomers,andtheabilitytosellandmaximisemarketshare,revenuesandprofit,HRmarketingisdifferent.Orisit?

An HR specialist is a person who, in addi-tion to a range of other activities, fulfils the requests of colleagues – managers – to find and acquire employees who are well-qualified and skilled to perform specific work in a specific position. To find eligible candi-dates the HR specialist establishes a strategy: first he/she checks CVs on hand to determine whether an eligible candidate is available among them; he/she uses research and social and demographic statistics to verify whether there is any chance to find the needed can-didates in the given region; he/she prepares a job description and targets, alone or in cooperation with employment agencies, the labour market in which prospective candi-dates can be found; he/she fights for talented candidates with competitors; and gives spe-cial attention to and engages future talent as early as when they study at secondary schools and universities. Once the candidate is won, the HR specialist develops motivational and other programmes aimed at retaining talent in the long-term.

And marketing? Let us look at the future employee as if we are looking at our client. Marketing is not about advertising, sales, market share or profit. Marketing is about finding what the customer needs and satisfy-ing those needs while generating profit. (If the customer has no needs then there is no choice but to create them.)

The labour market behaves similarly. Prospec-tive candidates are hard to attract because of competitors and generous government wel-fare. People are exposed to various influences from school days onward. Ask students what they wish to do for a living. Their answer often copies well-elaborated communication campaigns of concrete companies. Commu-nication (from products to image advertising and PR) is a marketing manager’s daily bread.

The addressed candidate evaluates the job offer similarly as a customer evaluates goods to be purchased. The candidate considers whether the job will meet the candidate’s needs and expectations and will be satisfy-ing and worthwhile. The candidate measures the amount of reward against their own effort to be invested in overtime work, night shifts etc. What about the marketing manager? The marketing manager designs the product including all its features and sets

the price level as a compromise between achievable profit and the price acceptable for the customer.

The HR specialist cooperates with agencies using general agencies to hunt for some professions and specialised firms to hunt for senior managers and specialists, whereas the marketing manager weighs whether to offer customers the given goods via general retailers or specialised sellers.

I spent over ten years working in market-ing but I had not realised until today that no HR specialist ever came to me to jointly think about HR marketing issues. Why not? I ask the question now with the benefit of hindsight. Indeed, if we look at HR marketing through marketing’s eyes, then marketing can inspire us immensely. The ideas and tools of marketing are tested by much more poignant conflicts and competition fights than HR. The results of marketing are reviewed daily by controlling departments and explicitly expressed in figures and diagrams. Market-ing has a kind of edge on HR so why not benefit from its successes in HR too. For all these reasons, I believe that marketing can be an inspiring fount of wisdom.

HR Marketing through a Marketing Manager’s EyesJiří Pavlík, published in HR forum, March 2009

HR in a “shrinking” world – communica-tion and co-operationThink about it for a moment. How much communication media we have available at our hands at work? What types of work can actually be designed in such a way that the work can be carried out around the globe around the clock.

We can connect with colleagues, clients, friends any time (do we all the times respect private life hours?) and from any place in the world. Imagine you have a question and want to contact a colleague on the same floor. You have a variety of options. You can make a 50 meters walk, dial a phone number, write an SMS or email, make contact through the virtual workplace; and this list of possibili-ties is actually even longer.

We can take a look at the key responsibilities of employees nowadays: knowledge sharing. Knowledge sharing on a local and global level is one of the factors of business suc-cess. The technical knowledge an employee acquires, the employee can share through

using a global knowledge management •platform, electronic data rooms (so-called eRooms), local office servers, intranet, knowledge databases;

organizing conference telephone and video •calls;

creating RSS news feeds • 4;

publishing blogs, podcats, webcasts; •

using same-time communication, e.g. •Skype; or

sending emails. •

Though, of course, the old-fashioned way of sharing knowledge the employee can also opt for is by providing trainings, workshops and conferences, publishing articles and visit-ing the coffee or relax corner.

And still, sometimes the world seems enormous. Sometimes we knock on several doors and all are closed. Now and then we have got the feeling somebody’s door is closed; and probably there are people who believe our door is sometimes shut. There are times we go with a question from door to door. And, is it not unfamiliar to end up again at the person one started. Or, when we

open ‘a door’ there is such a vast amount of information we dare not even to make a start in going through it – in the hope to find the famous needle in the stack.

There are a couple of topics which stroke me while writing these words here down in this article. The employee actually need to trust the organization he/she is in and people he/she works with that make him/her share criti-cal knowledge and know-how. The employee reaches out with an idea to his/her col-leagues to transform the idea into a service or proposal, for example. Each contributing employee takes ownership and responsibility; and all reap from the eventual success. These are maybe simple words but at the same time bear a lot of intrinsic meaning.

And, what makes, for example, open source technology and co-operation also a success is that the participants share a common understanding of the topic, use the same semantics, tools, methodologies, and can work together within a broad but well-founded framework.

It is a challenge for HR and leadership to provide real meaning to these words and put these words into real behavior, which go across people, departments, divisions, companies and countries.

HR in a ‘shrinking’ world – the HR func-tionThere are also many internal HR function challenges when trying to get closer to the internal and external customers of HR.

One perspective of looking at getting closer to the customer actually means getting a better understanding of the needs of the customer. This means HR will need to be in dialogue with its customers. There are several forms in which HR can have a dia-logue with its customers. This dialogue can be through participating in strategic busi-ness meetings, ask-and-answer situations, personnel counseling, department meetings, (online) voice-of-customer surveys or web-presentations.

For the HR employees to build a dialogue with the business means, HR needs to talk business and must be able to provide the information the business requires to make

business-like decisions. Such decisions relate to workforce planning, future competency and employee behavior demands, and leader-ship development programs. This means HR and business will spend less time talking about holiday requests and employee salary increase process.

Another perspective is the means the HR function can use to getting closer to the cus-tomer. The concepts of Shared Services Centres and outsourcing have shown that electronic means provide a proven method for communication and interaction with cus-tomers. The knowledge management model and design of the communication processes (e.g. tiered approach in “ask-and-answer”) in such environments make it possible for the HR function to know what is happening on the various company location(s) and use this information for improvement of services and processes.

There is another key imperative though for getting closer to the customer and that is the elimination of time spent on administra-tive work and transactional activities that involve people. Hence the current develop-ments of improving the HR function and its HR Service Delivery Model5, which currently take place at Czech companies that want to take the lead in bringing HR to the next level.

HR in a “shrinking” world“A thing is mighty big when time and distance cannot shrink it.” (Zora Neale Hurston)

Michiel van den Berg, published in HR forum, April 2009

4 RSS news feeds according to wikipedia.org: RSS is a family of Web feed formats used to publish frequently updated works—such as blog entries, news headlines, audio, and video—in a standardized format. RSS feeds can be found on: http://www.deloitte.com/dtt/leadership/0,1045,sid%253D97714,00.html 5 See for more information about HR Service Delivery and HR Transformation: In Czech: http://www.deloitte.com/dtt/article/0,1002,cid%253D218417,00.html and in English: http://www.deloitte.com/dtt/article/0,1002,cid%253D218424,00.html

Series

This is the final part of a series of 5 articles on HR Transformation.

The previous 4 newsletters primarily dealt with strategic business priorities, HR strategy, human capital services and programs. This newsletter will deal with perhaps the critical component in delivering people solutions: people. Although people management skills of managers are also important we will focus in this newsletter edition on the HR staff – HR’s capabilities. We will also address the HR operations and the communication compo-nent in delivering valuable HR services.

HR’s capabilitiesThe evolving role of the HR function has lead to changing and more often increasing demands on the competency level (capa-bilities) of the HR staff. For example, a local operating manufacturing company buys another company. HR is confronted with managing the merger and integration process from a people perspective. Top manage-ment will increase demands on change management capabilities, conflict resolution capabilities, and advisory skills.

Another example, HR leadership decides to change its HR back-office operations – from several locations throughout the coun-try to one Shared Services Centre on one physical location. The new HR management team of such a centralised back office sees itself confronted with increased demands in capabilities such as: large scale project management, ability to partner with internal stakeholders and 3rd party organisations, and increased demands on deepening the func-tional expertise.

In the previous newsletters we described how HR can pro-actively act on upcoming strategic changes. HR leadership should thus not stop here but also identify the knowledge and skills its HR staff will need in the next years. Such an assessment allows HR leader-ship to train and recruit required knowledge and skills. It also enables them to review

the composition of teams and job posi-tions, which may lead to the conclusion that changes are needed. For example, when HR wants to become a more strategic partner it needs to know what kind of skills and knowledge are required as well as reviewing the responsibility areas of the client-facing HR jobs. Maybe a stricter split is necessary in jobs that currently deal with both strategic people management issues and HR opera-tions. Operational HR work can blur the time and devotion needed to be a strategic advisor or to discuss with executive leadership on strategic people management issues.

HR operationsDid we reach the finish line already? In today’s practice many people are part of project teams and initiatives. HR staff feels the pressure to continuously improve their services, processes, policies, procedures, serv-ice level agreements, performance objectives and indicators, (integrated) technologies, and the list does not stop here. As business strategy evolves and changes overtime, HR operations also need to evolve and improve overtime. There are a couple of key practices that can help achieve results in the HR opera-tions area:

Establish an “operational excellence” team •to drive continuous improvement;

Define standard operating procedures to •provide consistency across the HR function;

Manage processes from end-to-end, rather •than in piecemeal fashion;

Rationalise (fragmented) HR applications, •prioritise information needs and then take full advantage of applications functionality;

Develop training programs that emphasize •continuous learning;

Establish rigorous governance processes to •improve financial discipline, accountability and compliance; and

Measure HR’s performance against service •level agreements and industry benchmark.

And… Communicate, Communicate, CommunicateIt often happens that when there is no com-munication but only action there is no real success. Sometimes we see HR functions rebranding (part of) the HR front office to HR Business Partners, which should add more value to the organisation and be strategic, without actually developing the enhanced capabilities, infrastructure, or services. Guess what, indeed, leadership and managers keep being dissatisfied or worse get even more concerned about the real capabilities of the HR function. Maybe they are indeed noth-ing more than an administrative function.

On the other hand, when there is action but no communication failure looms. There are HR functions that present proudly, but out-of-the-blue to the senior management team, the new performance management and bonus system. The senior management team is then typically not in the mood to take action and start the implementation. In gen-eral, keeping the company in the dark until everything is complete is a recipe for failure.

Communicate from the start and be con-sistent in every step on the way. Involve stakeholders in the communication process to create a sense of ownership and commit-ment.

HR TransformationContinuously Improve and Communicate ResultsMichiel van den Berg

EU funds

While Corporate Social Responsibility (CSR) is not fully and clearly implied when speaking about grant programmes funded from struc-tural funds, CSR projects do in fact receive interesting grants and it is worth noting that the CSR-related activities can be supported from grants.

The link between CSR activities and support from EU structural funds is a social pillar based on the modernisation of the Euro-pean social model, the aim of which is to invest in people, reduce their exclusion from society, improve the level of education and hereby assure one’s safety and well-being. To promote these activities, projects supporting these aims are funded from the European Social Fund – ESF.

If we assume that companies not only operate exclusively in economic terms but that they also impact their environment (community, social situation of employees, etc.), we can find inspiration in operational programmes (grant programmes funded from EU funds). Future applicants must realise that each call for submission of project intents addresses various target groups and provides various definitions on who can submit the project intent (e.g. compa-nies, non-profit organisations, schools and other educational institutions, etc.). Given the development level of the Prague region, it is always necessary to submit projects for target groups in the territory of Prague and projects for target groups in other regions of the Czech Republic separately. While the target groups in the territory of Prague are supported in the “Praha Adaptabilita” Operational Programme (the provider of the grant is the Capital City of Prague), target groups outside of Prague are supported in the “Lidské zdroje a zaměstnanost” opera-

tional programme (provider of the grant is the Ministry of Labour and Social Affairs). The “Vzdělávání pro konkurenceschopnost” operational programme (the provider of the grant is the Ministry of Education) is intended for elementary and higher educa-tion. When expressing project intents, it is necessary to use conditions of calls for sub-mitting project intents and adjust said project intents to reflect these conditions. The calls are announced by the grant providers several times a year. The programmes referred to above have been approved until 2013.

The grant projects referred to above can support projects focused on employee educa-tion and development (e.g. in educational courses or through setting up an educational system including advisory and the provi-sion of grants). Target groups include both employers and employees, and projects may be submitted by both business entities and non-governmental non-profit organisations, professional and business associations and schools.

Other interesting CSR projects include projects focused on supporting both equal opportu-nities on the job market and the work-life balance. These projects can involve activities such as training and re-training courses for unemployed persons who may be relatives or spouses of employees. Other projects may include those focused on introducing and testing the flexible forms of work such as working from home. Pro-family policies may be further developed through educat-ing parents on maternity/parental leave, focusing on the return to work or keeping contact with the job. This type of project can involve supporting related measures which lead to the support of equal opportunities for women and men such as contributions

for transport or child care. The support and development of child care services is an activity supported separately, one in which an employer can provide funding for mater-nity and family centres, babysitting agencies, child corners and nursery schools. Projects focused on supporting the integration of excluded groups, the educational activities of pupils and students (e.g. career advisory, student internships at employers, involvement of experienced professionals and foreign professionals in the creation of educational programs, etc.) are also of interest. Appro-priately focused courses and trainings for employees or other target groups can also play a preventive role in areas of life style, the environment, social area and safety and protection against various risks.

Companies do not always need to be the grant applicant and there is sometimes a need for projects to be implemented by non-profit entities. Support of non-profit entities by companies in preparing the grant applications that will be subsequently realised by these non-profit entities is also one way to increase the number of interesting projects focused also on the employees of private businesses.

The range of CSR activities discussed in this article and financed primarily from the Euro-pean Social Fund is not comprehensive but sufficient for providing both a brief illustration and also inspiration. Having an advanced social society is in the interest of both EU institutions and businesses, and provides ample opportunities for all. Not only do several individual businesses that engage in these activities already exist locally, but the global environment for developing CSR activities is already in place.

Corporate Social Responsibility Supported by EU Structural Funds? Luděk Hanáček and Barbora Parráková, published in Britská obchodní komora magazine, January 2009

Latest Trends in HR

HR Process Outsourcing: Adopt Standard Transactional Processes and Technologies: Today’s efficiency-driven, cost-cutting busi-ness climate, coupled with the mandate for human resource (HR) professionals to become strategic people managers, has compelled many firms to consider comprehensive human resource outsourcing (HRO). Discretely outsourcing processes such as benefits and payroll is nothing new. Comprehensive HRO is different — it is defined as outsourcing mul-tiple processes and technologies to a single vendor. As HR professionals look to remove administrative tasks to focus on the strategic ones, it is important to understand the real reasons to outsource, including the historical challenges with comprehensive HRO, the dif-ferent models offered by HRO providers, and how to successfully implement the change. (Forrester Research, October 29, 2008)

Not all talent management solutions are created equal: Talent management solutions are a key area of investment for organizations which are looking for increasing workforce productivity and side stepping the talent war. Global organizations are investing and finding value in HR technology systems that seek to maximize employee performance. By integrating the needs of executives, manage-ment and employees into one system, unified Talent Management solutions are making it possible for organizations to leverage critical information across multiple applications such as Performance Management, Learning Management, Compensation Management, Career Development, and Succession Plan-ning. Talent Management solutions ensure that by providing information to all employ-ees and their managers continually (not just at performance review time), employers and employees are truly working together to build stronger organizations. (Workforce Manage-ment, October 6, 2008)

One in four companies planning layoffs, but most taking measured approach to economic crisis: According to a Watson Wyatt survey, with the impact of the glo-bal economic crisis taking hold, a quarter of U.S. employers are expected to make layoffs in the next 12 months. However, most companies are focusing on increased employee communication and smaller cost-saving measures. According to the survey of 248 companies conducted in mid-October 2008, more than one-third are planning to increase their communication around pay (37 percent) and benefits (35 percent). And roughly one of four is planning layoffs (26 percent), hiring freezes (25 percent) or raising employee contributions to health care plans (25 percent). While some companies also plan other changes, including travel restric-tions, restructuring and reductions in training, relatively few expect to freeze salaries, freeze or close their pension plan. (Watson Wyatt, October 23, 2008)

Expatriate employee numbers double as companies see increased value in expatriate assignments: According to a survey conducted by Mercer, the number of employees on international assignments has doubled over the last three years as part of the continuing trends towards globaliza-tion. According to the report, 47 percent of companies surveyed said they had increased the deployment of traditional expatriates (employees on 1-5 year assignments) and 38 percent reported an increase in ‘global nomads’ (employees that continuously move from country to country on multiple assignments). The growth is primarily driven by the companies’ desire to be globally com-petitive. To successfully launch new ventures abroad and gain advantage over competi-tors, companies generally bring in their own experts from other locations to lead projects

on a short term basis, rather than rely on local talent. (Mercer, October 27, 2008)

Raises next year will be skimpiest since 9/11: A survey from Hewitt Associates has found that a large number of organizations will give smaller raises and bonuses in 2009, as a result of the economic slowdown. According to the survey, 42 percent of execu-tives at more than 400 corporations plan to decrease pay raises by 1 percent next year. A separate survey conducted by Watson Wyatt Worldwide has found that about 30 percent of organizations have reduced their pay budgets, in order to control operat-ing costs. This survey has also revealed that approximately 25 percent of the companies will retrench employees in the next year, and another 25 percent will institute a hiring freeze. (Workforce Management, October 24, 2008)

CEO pay at large caps way up despite drop in earnings: According to a study of CEO pay by the Corporate Library, the median pay package for chief executives has risen, in spite of the deteriorating economic condi-tions. The study revealed that the total compensation for chief executives at Top 500 companies rose by 22 percent in 2007, while operating earnings declined by 6 percent. It was also found that, during 2007, mid-cap companies increased their CEOs’ pay by 15 percent, while small-cap companies increased this pay by 5.5 percent. (Workforce Manage-ment, October 21, 2008)

Events

On 2-3 December 2008, the annual HR Know How & Forum of HR Specialists Conference was held in the Clarion Congress Hotel in Prague. The conference was again organised by the Czech Society for Human Resources Development (Česká společnost pro rozvoj lidských zdrojů - ČSRLZ) and the Institute for International Research (IIR). As in prior years, the HREA – Human Resources Excellence Award® – was organised with the aim of awarding best projects and HR professionals. The following prizes were given out during the conference:

First prize was awarded to the Training Centre of BOSCH DIESEL, s.r.o. from Jihlava; second prize was awarded to the HomeRun (Fit & Strong We Run Long) project of SAP Busi-ness Services Europe, s.r.o.; third prize was awarded to the PULZ project by Health Res-cue Service of the Liberec Region; fourth prize was awarded to Impress with its production premises at Skřivany in Eastern Bohemia and its How To Bring Back the Reputation of Crafts or Bilaterally Advantageous Busi-ness project; and the Grand Jury prize was awarded to IBM together with the Masaryk University in Brno for their Lighthouse project.

The conference was opened by František Mika, the president of the Czech Society for Human Resources Development, who stated: “We don’t need large sums of money, we

need good ideas. If we have good ideas, we need not worry about the crisis.” The open-ing speech was followed by a discussion on the current economic development in the Czech Republic and its impact on HR. The topic was discussed by macroecono-mists and other professionals from the Czech National Bank, Deloitte Advisory, UniCredit Bank Czech Republic, a.s., the Czech Economic Chamber and CERGE-EI. The discussion was moderated by Lenka Zlámalová, the chief analyst of Hospodářské noviny, Economia, a.s. “The future growth of the economy will be more demanding in terms of the quality of manpower” said Pavel Sobíšek, the chief economist of UniCredit Bank. Štěpán Jurajda, the vice-chairman of the CERGE-EI Council continued: “The first people who will be impacted by the growth in unemployment will be those less qualified. The demand for the more educated and retrained will increase. The question is what will happen with less qualified foreign workers who will be the first to lose their jobs and will stay in the Czech Republic. In this situation, it will have to be the state that will play the major role.”

Bronislav Pánek from Deloitte Advisory, s.r.o. spoke about the historical role of trade unions in the time of crises: “Trade unions in companies should not strive for an increase in wages, but for their short-term decrease in order to bridge over this period and prevent

mass dismissals.”

The recipe for success in the form of compre-hensive recruitment of team members and specific corporate culture was presented by Taťána le Moigne, Country Business Man-ager of Google Czech Republic, s.r.o. and Susan Pike, European Recruiter, Google Paris. In addition, the morning session included presentations of final projects nominated for the HREA – Human Resources Excellence Award®. The afternoon session of the con-ference was attended by Václav Klaus, head of the PORG grammar and elementary school, who spoke about the requirements for the qualification and personality of teachers.

On the second day of the conference, the participants were divided into six groups focused on various business spheres, specifi-cally the manufacturing industry, as well as the automotive industry, finance - banks and insurance companies, pharmaceutical industry, state administration and budget organisations, HR costs reductions and last but not least part-time jobs.

The conference was concluded by a discus-sion with members of the Board of Directors of the Czech Society for Human Resources Development who focused on challenges in 2009.

On 13 January, 2009 Deloitte HCAS team participated at the second series of a discus-sion forum Employable Future organized by the Czech Association for HR management at the University of Economics in Prague. During the second series of the event, groups of managers, university teachers and students

set up a competency profile of an under-graduate. Deloitte HCAS team moderated the individual discussions on the remain-ing competency – project management. The Czech Association for HR management decided to continue with such events thanks to the active participation of all participants,

their willingness to cooperate and successful stories of cooperation between universities and firms. The next Employable future will be held on 2 June and we hope to come up with concrete activities that enable university students to gain the required competencies.

On 19 February 19, 2009 a Conference for public sector sponsored by Petr Nečas, Minister of work and social affairs, was held

in Prague. Jiří Pavlík, Deloitte HCAS manager shared with the participants our experience and practical skills with a real implementation

of an assessment, remuneration and develop-ment system at a public sector institution.

HR Know How & HR ForumConference organized by IIR on December 2-3, 2008

Employable future IIDiscussion Forum Organized by ČSRLZ in the Premises of VŠE

Konference pro veřejnou správu (Conference for public sector)Conference organized by ConPro

Meet our experts

2 June, 2009 – Employable Future IIIDiscussion Forum organized by ČSLRZ. More information on www.lidske-zdroje.org.

September 14 and October 8, 2009 Discussion Multifórum on: “Have frozen wages? What next ...?“Discussion multiforum organized by ČSLRZ, will be held at Deloitte premises.

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Petr Kymličkae-mail: pkymlicka@deloitteCE.comTel: +420 246 042 480

Zeno Veselíke-mail: zveselik@deloitteCE.comTel: +420 246 042 486

Monika Benešováe-mail: mbenesova@deloitteCE.comTel: +420 246 042 427

Deloitte Advisory s.r.o.Nile HouseKarolinská 654/2186 00 Prague 8 - KarlínCzech RepublicTel.: +420 246 042 500Fax: +420 246 042 555www.deloitte.cz

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