Earthquakes Effect on New Zealand HR Management Case Study

The September and February Christchurch earthquakes were a powerful natural event that led to severe impacts on two-thirds of the New Zealand businesses. This event destroyed buildings and infrastructures, causing dire consequences to businesses. The occurrence exhibited a varied range of business effects depending on their vulnerabilities to the event. The survey undertaken after the event indicated that 18 per cent of the businesses suffered long-term effects, 26 per cent suffered medium-term effects, and 20 per cent suffered short-term impacts. In this regard, the human resource management of various organisations was bound to face multiple challenges with the workforce shortage.¹Considering the devastating experience that human resource management underwent, drastic measures were vital to counter any occurrence of the same event in future.

An analysis of the challenges that the human resource department would face indicated that the challenges would increase with time and their severity would grow. Some of the basic elements of the human resource that were significantly influenced include hiring, planning and appraisal, individual and team development, succession planning, job design and compensation. These crucial components of the human resource affected the overall performance of the most business that had initially encountered the disaster. In this regard, most organisations had to incur additional expenses to attract, hire, and retain an adequate workforce to realise their objectives. Through such initiatives, organisations had the capabilities to counter the earthquake’s impacts.²

Companies’ human resource aspects affected by the Christchurch earthquakes

Selection and Recruitment

Selection refers to the identification of potential candidates with the relevant skills, knowledge, and experience. After identifying and undertaking screening procedures, successful candidates are absorbed into the organisation through recruitment. The occurrence of the Christchurch earthquakes had a severe impact on this process of human resource management. The crisis caused a general panic about either settlement or working on such environments after the repeated incidence. Most people, out of fear, either moved out of the city or shifted to areas with less vulnerability. As a result, organisations lost several people with relevant knowledge and skills in undertaking varied organisational tasks. Similarly, the occurrence of the incident led to the loss of lives that had the potential of promoting most businesses into great heights. All these events led to the significant loss of workers and a decline in organisations’ performance.³

For most organisations, it was mandatory to loosen the selection terms and conditions in order to attract and find prospective candidates for most posts. Through this initiative, the available candidates, with at least the desired skills, would be considered for employment. Furthermore, incentives were to be provided to either lure candidates from within or other parts of the country. This implied that incurring additional costs was mandatory for organisations to realise their objectives. In this regard, most organisations encountered numerous challenges in dealing in international trade since the productivity level had declined significantly.

Workforce Planning

This element of the human resource management entails the long-term planning of an organisation’s human capital requirements taking into account both the internal activities and factors in the external environment. The occurrence of the Christchurch earthquakes had considerable effects on this component of the human resource. After the incident, most individuals who were vital in various organisations were either missing or displaced. This implied that organisations had to deal with the labour force shortage. At the same time, the aftermath of the incident indicated that the demand for labour increased while the supply decreased drastically. The occurrence was attributed to the influence of the general panic and fear of residing in such risky areas. Considering this effect, most business organisations suffered considerably due to the limited number of workforce and had to create incentives that would attract the required labour force to the organisations. Notably, most organisations were understaffed. Therefore, the production levels and competitiveness of most businesses declined significantly. With the low production levels, the economy of the city plummeted.

With the infrastructure destruction within the city, most businesses encountered challenges in obtaining essential human capital since there was a shortage of the necessary facilities. Analysing the devastating nature of the earthquake, despite the offering of the potential candidates with lucrative opportunities in the city, the operations of most businesses definitely declined. Nevertheless, the construction industry flourished since most demolished structures needed reconstruction. Thus, the earthquake affected most business sectors.

Compensation Systems

This refers to any payment that an individual receives in return for performing organisational tasks. The most basic types of compensations offered by organisations included direct and indirect financial compensation and non-financial compensation.⁴The aftermath of the earthquake indicated that compensations systems were likely to encounter inflationary effects. The increased labour demand influenced this fact with a significant decline in its supply.

For most businesses, they had to offer attractive forms of compensation systems to counter their rivals for the rare commodity. Notably, the rise in wages and salary implied that most organisations would suffer from high labour turnover. As a result, employees’ contributions within organisations would decline significantly due to their marketable skills. Furthermore, the competition for workers among organisations forced most businesses to underutilise their staff while offering great incentives to boost their motivation.

This significant rise in the compensations system demanded additional costs from the organisations in order to survive despite the low productivity of some employees. As inflation affected the compensation systems, most businesses would not offer their employees with further training and development so as to increase their productivity. Therefore, inflation considerably hampered creativity and innovation influencing the overall performance of businesses compared with those from other cities.

Employee separation

This entails the act of employees exiting the employment opportunity offered within the business. Retirement, death, layoffs, dismissal, and voluntary resignation usually cause this phenomenon.⁵ The panic and fear influenced by the consideration of the city as a risky spot caused many people to leave the city while others were displaced. This outcome was detrimental to the businesses that remained within the same vicinity due to the vacation of most of their staff. Additionally, considering the fact that the employees with vital experience and skills went missing, it became cumbersome to replace the same type of personnel.

After the incidence, most businesses experienced high levels of labour turnover. Some of the causes of this outcome were deaths, resignation, and retirement. Due to the effects of the quake, most individuals who were vital to organisations lost their lives, and this affected the general performance of businesses. For individuals who deemed that they no longer had the psychological commitment to work for their organisations, they either took voluntary retirement or resigned. This outcome was depriving to most businesses since individuals with varied experiences concerning business operations were lost. At the same time, most organisations had the burden of covering for the retirement benefits of their deceased or retired workers. The fact that there was an unanticipated massive movement of employees facilitated this occurrence.

Recommendations

Analysing the results of the Christchurch earthquake against its effects on human resource management in various organisations indicates that the incorporation of significant measures in the government of New Zealand is vital. In this regard, during instances of disasters, proper measures that relate to recruitment, employee retention, compensation systems, and employee separation should be handled just like in the normal trading periods. In this regard, some of the most crucial components that need addressing are employees’ securitisation, ability utilisation, social service, and authority in the event of disasters.⁶

Through such initiatives, the employees of various businesses within the country would not encounter numerous difficulties if such events re-occur. Additionally, organisations’ employees are assured that their needs will be met in case of any eventuality. The government should ensure the proper handling of the following prior to or during instances of disasters:

The careful hiring and refined selection of candidates while recruiting

The government should ensure that businesses adopt the best possible procedures to assess their candidates and hire those deemed essential to the businesses. Through this process, applicants with varied skills and knowledge will be selected to the organisations. This will foster the realisation of its objectives and goals. As a result, individuals with the urge to work rather than just by the remuneration offers given by the companies will be identified. Additionally, the opportunities offered within the organisations will motivate these individuals.

Sophisticated workforce planning

The government would have to address the issues regarding the businesses conduct of labour planning. In this regard, businesses will plan for the anticipated labour demand and supply. Through this initiative, the government will enhance the matching of labour during varied periods of labour supply. In addition, the businesses need to develop the means through which they will promote their need for obtaining and retaining employees while utilising them in the best way.⁷

Regulated Compensation systems

Through regulated compensation systems, the government will be able to streamline the instance of inflated remuneration in the occurrence of such disasters. When the government provides guidelines concerning the ways in which businesses can reward their employees appropriately according to the economic environment, businesses will flourish irrespective of any crisis.⁸ Thus, such incentives are necessary:

1. Increasing the compensation levels to be contingent upon the levels of performance and skills exhibited by individuals
2. The regulation of remuneration systems of businesses while supplementing them in periods of crisis.
3. planning adequately for any financial crisis through varied forms of investments.
4. Providing extensive security plans to employees

Planning effectively for employee separation

Since this is a challenge to most businesses in instances of crisis, it is essential for the government to plan accordingly to prevent its dire consequences. Notably, if employees can terminate their employment terms with business while some other experienced individuals take over, businesses would flourish.⁹ Some of the essential areas include:

1. The development of numerous learning institutions for skill and knowledge acquisition to help curb incidences of a shortage of labour in disasters
2. The involvement of employees in company operations, thus promoting information sharing and worker voice management
3. Working in teams to boost skills and knowledge diffusion thus promoting growth in the number of experienced personnel

Considering the case of the Christchurch earthquake effects, it is also essential for the government to plan its structures appropriately to harbour displaced individuals in events of the crisis. Additionally, it is very critical to enhance other forms of infrastructure like roads and communication facilities that will minimise the dire outcomes in events of the crisis.

Conclusion

The above initiatives of the government will assist in countering effects that are likely to be a witness during and after any disaster. Consequently, employees’ motivation and security in their line of duties will be improved. As a result, the human resource management will operate effectively in most organisations.

Bibliography

Fuatai , Teuila. “Rental housing crisis impedes Christchurch recovery. (2012). Web.

Gilmore, Sarah, and Steve Williams. Human resource management. Oxford: Oxford University Press, 2009.

Ivancevich, John M.. Human resource management. 7th ed. Boston: Irwin McGraw Hill, 1998.

Kidd, John, Xue Li, and Frank Richter. Advances in human resource management in Asia. Houndmills, Basingstoke, Hampshire: PALGRAVE, 2001.

Lane, Larry M., and James F. Wolf. The human resource crisis in the public sector: rebuilding the capacity to govern. New York: Quorum Books, 1990.

Mathis, Robert L., and John Harold Jackson. Human resource management: essential perspectives. 4th ed. Mason, Ohio: Thomson Higher Learning, 2007.

Mondy, R. Wayne, Robert M. Noe, and Mary Gowan. Human resource management. 9th ed. Upper Saddle River, N.J.: Pearson Prentice Hall, 2005.

Stone, Raymond J.. Human resource management. 4th ed. Milton, Qld.: Wiley Australia, 2002.

Swiggs. “Many New Zealand Businesses Affected By Christchurch Earthquakes.” Rebuild christchurch 1 (2011): 1.

Ulrich, David. Human resource champions: the next agenda for adding value and delivering results. Boston: Harvard Business School Press, 1997.

Footnotes

1 Swiggs. “Many New Zealand Businesses Affected By Christchurch Earthquakes.” Rebuild Christchurch 1 (2011): 1.

2 Fuatai, Teuila. “Rental housing crisis impedes Christchurch recovery.”. (2012). Web.

3 Gilmore, Sarah, and Steve Williams. Human resource management. (Oxford: Oxford University Press, 2009), 78.

4 Mathis, Robert L., and John Harold Jackson. Human resource management: essential perspectives. 4th ed. (Mason, Ohio: Thomson Higher Learning, 2007), 68.

5 Mondy, R. Wayne, Robert M. Noe, and Mary Gowan. Human resource management. 9th ed. (Upper Saddle River, N.J.: Pearson Prentice Hall, 2005), 129.

6 Kidd, John, Xue Li, and Frank Richter. Advances in human resource management in Asia. (Houndmills, Basingstoke, Hampshire: PALGRAVE, 2001)154.

7 Lane, Larry M., and James F. Wolf. The human resource crisis in the public sector: rebuilding the capacity to govern. (New York: Quorum Books, 1990), 75.

8 Stone, Raymond J. Human resource management. 4th ed. (Milton, Qld.: Wiley Australia, 2002), 58.

9 Ulrich, David. Human resource champions: the next agenda for adding value and delivering results. (Boston: Harvard Business School Press, 1997), 97.