HR’s Role in Economic Predictions

Girl with shopping bags looking at internet browser in sky
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There is no doubt that the retail sector is a huge industry in Canada.  Many of us have worked in this environment, somewhere along the way, on our individual employment journeys.  There is also no doubt that the retail sector is going through significant challenges and changes that will continue throughout our employment lifetimes.

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The shift to online shopping has to be one of the most significant changes influencing the retail industry.  As customers, we can now enjoy the ease of online shopping in our pajamas, every day, without ever leaving the comfort of our homes.

From an employment and staffing perspective, it is interesting to note that this article does not speak to the impact on the existing workforce.  Will the need for smaller stores and increased online presence for a retailer like Walmart have an impact on its employees? Will this impact be positive and/or negative?  Absolutely! Just because it is not identified does not mean it does not exist.

This is our challenge, as HR Professionals – we need to be cognizant of these types of industry predictions.  We cannot be blind to patterns in industry that are laid out for us to consider from an employment, staffing, and workforce perspective.  Too often, we leave the industry and economic predictions to others in the organization to process and consider.  Our challenge is not to just monitor the changing economic environment and industry forecasts; but to identify the real issues that will arise because of these changes and chart the right course for the future.  Forecasting is an activity full of risk, but it is a necessary task, as it must identify potential impacts for the employees that we, as Human Resources professionals, serve.

Discussion Questions:

  1. How do I shop differently now from the way I shopped three years ago?
  2. What are three positive impacts on employees who work in the changing retail sector?
  3. What are three negative impacts on employees who work in the changing retail sector?
  4. What are key skills or traits that a Human Resources Professional needs for working within a retail environment to ensure accurate workforce forecasting?

The Economic Realities of Outsourcing 

Why is outsourcing so appealing?  Well, in many cases it is a numbers game; particularly, employee supply, and cost.

The population of Canada pales in comparison to some other countries, and therefore has a much smaller pool of employees to fish from. The following is an eye opening article illustrating the appeal of outsourcing overseas.

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The State Government of India advertised for 368 entry level positions and received 2.3 million applications.  Let’s review that number again, it is not a typo, 2.3 million applications for 368 entry level jobs; such as, waiters, and night security guards. From a HR supply point of view, it makes perfect sense to outsource to a country that has such a massive supply of employees.

As economic theory predicts, where there is a massive supply of employees, wages will be lower.  Average entry level jobs in some of these vastly populated countries pay approximately $400.00 per month, in Canadian Dollars. In Canada, even at minimum wage, the average salary would be $1800.00/month.

If you have low skilled, entry level, jobs to be filling, and the work required can be done anywhere, why wouldn’t you outsource?  There are many non-monetary factors to consider; such as, quality, employee management, and loss of direct control over the work. Unfortunately, many organizations only look at the numbers.  It is the role of HR to provide an in-depth analysis and look at all the factors, both negative and positive, prior to recommending outsourcing as a viable option.

Discussion Questions:

  1. What are all the factors that a HR Professional should consider before recommending outsourcing a business activity overseas?

If Not Us, Who? If Not Now, When?

IT and technological changes are not the wave of the future, they are the drivers of our current, present state and will continue to influence how we all work on a day-to-day basis.  This is most evident in the re-shaping of tactical Human Resource functions that can (and should be!) done more efficiently and effectively by automated systems.  Tactical functions include things like payroll processes and attendance tracking which are typically reliant on high volume effort but have very low value result.  It does not mean that these types of functions are not necessary; It does mean that a human person does not necessarily need to do them.

C3PO and R2D2 with caption "Don't technical with me"

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Does this mean we, as HR Professionals, should be concerned about our careers?

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If the only value an HR department brings to an organization is one that is based on pushing processes then, of course, our positions will disappear.  However, HR should be, and is, much more than just the process pushers or the compliance police.

We need to move out of tactics and into ensuring organizational transformation through strategic leadership and people management.  The value that HR brings to any organization must be measured through strategic outcomes and big picture deliverables.  HR is the wave of the future that must lead organizations by focusing on ethical stewardship and corporate social responsibility.

So let’s not worry about losing those low value tactical functions.  This will gives us, as HR Professionals, more opportunity to build valuable organizational strength through powerful creativity and passion for the Human Resources profession.

Discussion Questions:

  1. Identify the differences in value between tactical and strategic HR functions.
  2. What does Corporate Social Responsibility mean to you?
  3. In your current work environment, identify three processes that should be automated through the use of technology and the resulting impact of those changes.
  4. Identify three specific strategic functions that HR should be doing in order to be perceived as bringing value to the organization.


HR Lessons Learned – Downsizing

It seems that employer insensitivity knows no international boundaries.  In August of 2015, employees of the Australian company Hutchison Ports, received notices that they were losing their jobs first by SMS text,  followed by an e-mail confirming their job loss.  To make matters worse, the messages were sent at 11:30pm directly to affected employees.

Not surprisingly, reaction to this approach by the employer was swift and viral.

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Clearly, the human element was not evident in the implementation of this downsizing plan.  No matter what difficult decisions are made by senior executives we, as HR Professionals, must ensure that these decisions include consideration for the dignity and respect of all employees.

The approach by Hutchison Ports created a huge backlash that continues to impact the organization’s international reputation and their profitability.  Rather than having to clear up the reputational mess that they find themselves in after the fact, it might have been better for Hutchison Ports to allocate a more time towards their communication strategy up front.

And, it might have been helpful to spend  a few minutes reflecting upon the humans involved before someone hit ‘send’ in the middle of the night.

Discussion Questions:

  1. What advice would you, as the HR practitioner, have given to the CEO of Hutchison Ports?
  2. What would you do if you received a notice, via text, that your employment was terminated?
  3. Identify two or three practical HR initiatives that employees should have had access to in this case.
  4. Identify three alternative approaches the employer could have used to communicate with employees about downsizing.


The UK’s Scarlet Letter of Wage Discrimination

Workplace Employment Inequity is a Worldwide Problem.

All things strive to achieve balance; including, wages, and supply and demand. These are terms we use all the time in HR and in the business world.

HR planning is all about sustaining equilibrium with your employees – you want the right number, at the right price, with the right skills. HR strives for balance and to treat all individuals fairly and equally.  Unfortunately, research from all over the developed world, is showing that we treat half our employees unfairly!

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Women in Canada make 73% on the dollar, when compare to their male counter parts.  This statistic does not following the basic HR principles of consistency or fairness.

The United Kingdom (UK) is trying to address income inequality between genders in the workplace through legislation.  All companies, with over 250 employees, will have to publish their gender pay gaps.  Public shaming, the proverbial scarlet letter to announce and embarrass the wrongdoer, is hoped to be a effective strategy to achieve balance.  The UK’s Prime Minster, David Cameron, stated:

“[It] will cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up.”

This may or may not be work as planned, in fact, it could backfire and start driving male wages down! Oh well, as least we will have equality…

Wage inequality between the genders is a complex problem that touches on our economy, our cultural, and our sociological mores and norms.  It is too bad that HR and organizations cannot solve this problem without resulting to public shamming.

Discussion Questions:

  1. You are the new Director of HR, and have conducted a wage analysis with results demonstrating gender inequality issues. What steps would you take to correct this imbalance?
  2. Research the statistical evidence of wage inequality in your province. What have you discovered?  How does your province compare to other provinces in Canada, the US, around the world?