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Hrm in Recession

Essay by   •  November 12, 2013  •  Essay  •  1,024 Words (5 Pages)  •  781 Views

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Today we are facing the greatest global crisis of this decade, whose we have not measured yet the actual extent and duration. It is even possible that we might be into a new sustainable organization of the global economies. Multinational organization or Indigenous, none were ready to tackle the economic crisis.

Ireland was the first European country to be in recession. It is the country that has suffered most from the economic crisis. The companies were the first to respond to the effects of the crises. Human Resources played a significant role in the survival of them by launching large restructuring programs. Companies need to restructure to fit the new situation introduced by the economic crisis and rethink many reforms on their strategies. However, between Multinational and Indigenous companies practices of human resource managements are different during the crisis. This is what we will discuss throughout this document.

First of all, with the economic crisis reducing the total cost has become important. Concerning wages and benefits, most companies wanted to dramatically reduce labor costs. For this, they have developed measures like reducing or freezing wages, reducing bonus, the end of promotions, etc. They also did reforms on benefits schemes and pension plans.

Indigenous wanted to protect and support employees by creating new formalities of working hours as work in the short term, career interruptions, etc., while accepting lower wages.

On the other hand, Multinational companies establish directly pay freezes and wage cuts. However, Multinational companies have withstood the lower wages in particular sectors of health services and pharmaceuticals, insurance, electronics, drinks, and all Multinational companies that heavily focus on export. Still there are differences between sectors. The banking sector is more likely to pursue the wage freeze for example.

Secondly, on the employment adjustment and staffing, strategy for Indigenous and Multinational companies are quite similar. Their strategy is to reduce the numbers of employees for stabilizing the workforce to prevent the loss of employment while freezing the recruitment.

It is through many political safeguard jobs, submitted by the State, incentives employers as not lay off employees, and the important unions, that the safeguarding of job could be reduced. However, the decreasing union involvement, cause a weaker position in negotiation for the employees. Therefore the loss of jobs in Multinational was almost inevitable. For Indigenous they try to minimize as much as possible layoffs by deploying staff to other jobs within the company or by relocating staff abroad. But they still have taken important steps such as recruitment freeze, voluntary and sometimes compulsory redundancies, reductions in overtime, flexible working schedules...

For great savings, because of the recession, employee development through the development of training in companies was somehow overlooked, that it be Multinational or Indigenous because expenses have been reduced considerably. Compared to Multinationals, it's the Indigenous companies that have managed to find a good strategy to protect their employees. They have combined training with work experience by creating new training programs. These programs have greatly improved the efficiency of staff because they are now able to undertake new duties in the company. For Multinationals, training

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