Welcome to this special HRwisdom video presentation on employee retention planning.
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This video presentation by the manager of HRwisdom, Ben Geoghegan, identifies how 63% of Australian employers are at a disadvantage during the economic downturn.
As always, we invite you to leave a comment below.
Whilst it appears that the Australian economy has avoided a recession, a recent report in The Australian identified two strong reasons for employers needing to carefully manage their workforces and retain their skills base – a process that was not done well during the recessions of 1990-91 and 1982-83.
The first reason was that many structural changes have been made to the national economy since the previous recessions. Many businesses are now far more robust and are carrying far less debt, thereby enabling them to weather the coming storm.
The second reason was that, with recessions typically lasting 12-18 months, “the Australian population won’t be any younger when the next recovery comes, so complaints about labour shortages are likely to return quicker than in past cycles.”
Indeed, this matches the research conducted by Australia’s leading demographer Bernard Salt (a partner at KPMG) who recently revealed that in 2010, the Baby Boomer generation will be leaving the workforce at a faster rate than the Generation Y employees are entering. This means a rapidly shrinking workforce.
Now consider the combination of a shrinking workforce with international economic developments.
The Chief Economist of the OECD (Organisation for Economic Co-operation and Development) stated recently that he predicts that, by 2010, most world economies should be expanding once again. This is probably a little hopeful but note that the government of our biggest trading partner, China, has been pouring hundreds of billions of dollars into their economy and recently cut borrowing costs by more than 1% to further stimulate their economy to maintain a strong growth rate.
With these facts in mind, we may find that the resources states of WA and Queensland may again be facing critical skills shortages before too long. This would, of course, have flow-on effects for other states.
The report in The Australian contained useful advice for organisations currently evaluating how to manage their workforce during the economic downturn: “The smart employer will hoard labour – through reduced hours or extended leave – with a view to redeploying once demand resumes.”
This advice ties in with a report commissioned for the Australian Human Resources Institute which found that 63% of Australian employers did not have a plan in place to manage the retention of their good employees.
Therefore, organisations with a plan to retain and manage their good employees during the economic downturn will have a major advantage over competing employers.
These smart organisations will be more likely to keep their key people, survive the tough times, and produce better results for their stakeholders. They will also be able to hit the ground running when the economy starts to regain strength.
As always, let us know what you think by leaving a comment below . . .
Kind regards,
HRwisdom Support
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