Posted By Sandra Wiley,
Monday, February 1, 2010
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The recession's impact on human capital concerns within the accounting industry varies widely across the country. Like most professionals, HR and management specialists are glad to see 2009 in the rear-view mirror. All professionals felt stressed by the challenges of 2009, but those who deal with people issues everyday felt it most acutely. When one feels responsible for the livelihood of human beings but is also called upon to protect the firm, the anxiety can be overwhelming.
The recession's effects were severe within many firms, with widespread pay and bonus cuts as well as decreases in benefits and fewer opportunities for training. Unlike last year, however, I believe 2010 will be a time your firm will want to remember for a long time to come. Here's what I see on the horizon for the next eleven months:
- Recession subsides – slowly: Pay freezes were palatable in 2009, because inflation was in unparalleled negative territory. Predictions indicate that beginning in January 2010, RPI inflation will start to climb back to more normal levels. Experts anticipate pay raises of 2 to 4 percent as the economic recovery takes root.
- Pay and bonus freezes are thawing out: Many employees considered pay and bonus freezes (or cuts) last year as a temporary "fix" that would change as the markets improved. While firms still need to be cautious in pay and bonus decisions, many will expect to be rewarded in 2010 for past sacrifices. Many firms report that they now employ the best staff ever, so they will want to be fair and equitable in their pay decisions.
- Pay and bonus benchmarking: Identifying what the market pays is critical this year. The re-establishment of market-related salary levels and adjusting salaries and benefits that went out of line during the recession will be back in vogue. Market adjustments will help sort out variances and might take place outside of annual pay reviews.
- Career development: Learning and training initiatives may have been set back or put on hold by firms looking to curb expenses during 2009. Firms must begin to rebuild a learning culture in order to elevate the staff's confidence. If a firm invests in growing human capital through career development, it reveals its confidence in its future. Moreover, firms that expand net intellectual capital are poised for substantial growth as the recession subsides.
- Employment relations: When a firm documents its core values, its people are almost always at the top of the list. Last year revealed whether or not a firm really believes its people are a top value. Those with strong communication channels and a high level of trust among partners, managers and staff are ready to take on 2010 with confidence. Those that did not have a strong foundation and an open culture are likely struggling to re-create and build human infrastructure to stay viable for the future.
- Talent: In past years recruiting and retention were top priorities for most firms, but the recent economic upheaval has shuffled the deck. Retention moved ahead of recruiting in 2009, and hiring slowed to a crawl as many firms made staff reductions. Fortunately, the outlook for this year is much brighter. Many firms used 2009 to mold a highly functioning yet "lean" staff. In 2010 firms have the opportunity to recruit selectively and hire people who complement the organization in new and highly relevant ways. An amazing talent pool has entered the market, and now is the time to take advantage of it.
- Team Collaboration: The organizational structure of most firms through the years has been hierarchical (partners make decisions, and others follow). Firms today are evolving to allow everyone involvement in decision making and planning. This year holds great promise for firms that adopt a collaborative model of team management.
- Respect for all Generations: To some degree workers from generations prior to "X" have reclaimed the preeminent outlook on the workplace: endure long hours, place job before personal priorities, have limited (if any) flexible work arrangements and "tow the line" in order to get ahead. Even while facing this new reality, younger workers are still betting attitudes and opportunities will revert to pre-2009 once the "storm" has passed. Their quest for a more appealing workplace has not ended, but it will proceed with a new found respect for the sacrifices that Historians and Baby Boomers endured to build a solid foundation for the firm. In return, those from older generations should respect and appreciate how Generations X and Y are contributing new thinking and innovative ideas to make the firm more profitable and life more enjoyable!
- Focus on Health: Congress is not the only place where health care is discussed and debated these days. HR professionals everywhere are throwing around ideas, looking for new ways to lower the cost of health care for employees and the firm. Mental health, healthy workplaces and community service activities are now areas focus. The searching will continue and likely become even more of a priority as 2010 unfolds.
My final prediction for 2010 is that this will be a breakthrough year for firms willing to put time and effort into planning and developing a firm wide team. Consider the outlook I've outlined above and pay special attention to those who are not operating at a high level in your firm. Document a plan and refer to it often – be sure to share it with your entire team!