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Four HR Issues Most Affected By the Crisis

January 1, 1999
Related Topics: Global Business Issues, Featured Article
Though the first instinct of multinational management is to replace expensive expatriates with local nationals or repatriate them entirely, HR must look at the overall strategic plan to see what’s really sensible. "You need to have a vision of opportunity and look through the crisis to find different ways to keep the business moving forward," says Bill Hensel, a spokesperson for Atlanta-based Coca Cola Co. This is especially so in the current HR condition, in which one sector is troubled by one set of events and another is affected by different circumstances. Look at each location within the context of a general staffing plan, not simply responding to save money now.

For example, Coca Cola saw a staffing opportunity in one of its facilities in China when a bank closed, leaving a large staff of educated, out-of-work employees. Seizing this chance, Coca Cola hired the workers because finding good, trainable human capital is very difficult. The company saw it as a long-term staffing advantage to retain them in their cadre of talent.

Playing with various scenarios, short- and long-term, HR can help determine the key skills of particular jobs and which jobs are crucial to long-term health of the organization. Once determined, HR should determine if, and which, positions are expendable if the company needs to cut back on personnel.

When business slows and the air is charged with fear of cut-backs and downsizing, retention of valuable employees becomes even more critical. Not only is communication to the workforce essential, but it’s a time when valued programs and benefits to employees should be emphasized and highlighted. Retaining key people becomes pivotal in these volatile times where fears and a tight labor market co-exist.

While more and more organizations are realizing that retention is a strategic issue that is most effectively addressed as a corporate-wide initiative, it is especially important at the outset of an international assignment. Careful career development and planning, as well as the more typical rewards and incentives, can be powerful retention tools.

Compensation for international assignees and local nationals is more complex than ever because the environment is more eruptive and changeable. Equity issues, legal factors and taxes are ever more complicated. Also different is the thought process that used to prevail in which an international assignment was tied to a financial incentive. Now, being globally mobile is more directly related to career direction, and expat compensation can be approached with that in mind.

A recent survey by New York City-based William M. Mercer Companies LLC reflects the Asian downturn in salary and wages. These changes reflect business slowing and the increasing unemployment in these areas. Again, compensation is a illustrative of the volatility of the region.

Corporate Culture
As guardians, caretakers and enhancers of the corporate culture, HR may want to consider this period as an opportunity to communicate corporate values as they relate to globalization efforts. It is also a good time to clearly communicate the organization’s situation and its response to this tumultuous situation. In fact, each company is affected so differently than others that it would be a good time to stop any misinterpretation from more general news sources.

Global Workforce, January 1999, Vol. 4, No. 1, p. 9.

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