Joubert & Associates recently did a strategic analysis on how the current political and economic climate impacts on HR management practises in the workplace. A matrix with four scenarios was developed based on economic growth (high and low) and the nature of HR strategies and services (transactional or transformational) required.

HR scenario’s comparing the impact of HR services and economic growth

From our analysis it is clear that in periods of low economic growth and political uncertainty employers tend to focus more on transactional aspects of HR. HR departments and programmes / activities are scaled down to the minimum with the emphasis on compliance (legal framework and quality requirements) as well as essential services such as disciplinary matters and replacement of staff in key positions. There also seems to be an increase in conflict, grievances and disciplinary related issues. A lot of time and energy is spent on the analysis of labour cost and scaling down of structures in an attempt to reduce operational expenditure.

The above scenario is in direct contrast with periods of high economic growth. During such periods employers dramatically shift their focus to the transformational aspects of HR. Apart from maintaining the capacity to deal with compliance related processes and procedures, employers then compete to attract top applicants (from a very limited pool of available skills), develop and build internal capacity. In this scenario skilled HR Practitioners and consultants are in high demand. Employers focus on the following strategies to maintain a competitive advantage in their respective industries and marketplace:

• Develop employer brand value to recruit and retain top employees from a very limited supply
• Develop and expand reward systems (remuneration policies, strategies and incentives schemes)
• Performance management and staff development programmes to improve productivity and efficiency
• Internal and external training (critical skills)
• Management coaching and training (often with an Emotional Intelligence core)
• Strategic management with longer term focus (grow / expand markets and infrastructure investments)
• OD Interventions to strengthen organisational culture, core values and a positive climate.

The key question towards 2020 is therefore to decide whether to adopt a transactional or a transformational approach to HR Management in your business. Contact Joubert & Associates to assist your company in your strategic HR planning for 2020.