Introduction
Staffing is an important function defining the success of an organization. At present, effective talent management is vital for companies operating in such tight industries as sugar-sweetened beverages production. The industry is facing considerable challenges due to the changing habits of customers and certain trends taking place in the global and local markets. The present report includes the key highlights of the steps PTP Soda Drinks needs to undertake to manage talent effectively and be competitive in the market.
Current Labor Trends
Technological advances of recent years enabled people to shape the existing labor trends. Automation, for instance, is a common transformation in diverse industries on a global scale (Parolin, 2020). It has been acknowledged that automation is taking place at a considerable pace in developed countries, but this process is also visible in the majority of developing countries. Although employees tend to have concerns regarding this trend as they fear losing their jobs, automation leads to increasing salaries and working conditions in many instances, especially when trade unions are strong in a particular country or industry (Parolin, 2020).
At the same time, automation is associated with the reduction of employment shares of the jobs that can be automated (Parolin, 2020). People are trying to adapt to the changing trend and invest in their training and development, obtaining new skills and gaining an education.
Technology has also offered an effective solution for millions of people during the COVID-19 pandemic. The health-related crisis that is still shaping people’s choices and the development of industries led to an increase in the rate of employees working from home (Ding & Molina, 2020). This model became the best option for many companies and employees. Companies had to face substantial financial issues due to the quarantine measures, so a wave of redundancies was common in many industries. The COVID pandemic contributed to the acceleration of the automation process as well.
Such countries as the USA and the UK were affected considerably, so lockdowns have been introduced for prolonged periods. Employees in these countries were asked to work from home, which gave rise to numerous changes. US and UK companies started hiring employees with certain computer skills as it was apparent that working from home may be required. The organization in these countries also started investing in staff training associated with computer skills acquisition (Ding & Molina, 2020).
Kidway (2021) notes that such companies as Shell, JPMorgan Chase, Walmart, and many other giants in their industries provide training on artificial intelligence to their employees. Outsourcing is becoming increasingly used in UK and US companies as they managed to develop methods to ensure security and data safety (Kidwai, 2021). Security issues were some of the typical obstacles to increasing the rate of outsourced workforce, which is not a problem for many UK and US companies at present. In the Saudi Arabian context, this trend is also apparent, which is especially true for large and multinational companies.
Other external factors, such as public views on social justice, have also had a significant impact on labor markets. For example, equality has become one of the central labor trends during recent years. One of the major issues related to this sphere is the role women play in the labor market (Klasen, 2019). In the countries of the Middle East, these concerns are also affecting the development of the labor market. High-skilled females form the largest cohort of working women in developing countries, which is often associated with cultural peculiarities. Klasen (2019) adds that female participation in the labor market is beneficial for countries’ economies. However, cultural norms and regulations existing in Middle Eastern countries, including Saudi Arabia, prevent women from entering the country’s labor market freely and effectively.
In such countries as the USA and the UK, companies are also trying to enhance their gender diversity. The introduction of quotas and staff development projects aimed at empowering females are some of the ways utilized to increase the rate of female employees in companies (Collins & Hutzler, 2017). Numerous scandals involving the pay gap or harassment in the UK and the USA show that women are still discriminated against and down-paid. Based on the current news, it is apparent that American companies have been more successful in addressing these problems (especially the pay gap) as compared to UK organizations. These trends are most apparent in leadership roles where male employees dominate. Women of color are specifically vulnerable in both the United States and the UK, which is another concern of companies and governments.
Importantly, health concerns and people’s views on healthy lifestyles have a substantial effect on businesses as well. People are willing to consume healthy foods, which is a trend common for the vast majority of countries. An illustration of this trend that is relevant to the company in question is the taxation of such industries as fizzy drinks production. The government of the Kingdom of Saudi Arabia introduced high taxes on sugar-sweetened beverages (SBB) in 2017, which led a 50% increase in prices (Alsukait et al., 2020). The UK also has high SBB taxes aimed at reducing the consumption and promoting the reformulation of the industry (Alsukait et al., 2020). These external factors made companies reconsider their strategic approaches to many areas and operations, including staffing.
These trends have an influence on the equilibrium of supply and demand, making labor markets tight or loose. Gumata and Ndou (2017) argue that a country’s labor market as a whole can hardly be referred to as tight or loose as different industries and spheres are prone to various changes. The pandemic that stroke all the countries became a shock to many economies. For example, the UK and Saudi healthcare systems, as well as health care in other countries, tightened considerably as there has been a shortage of healthcare professionals, especially nurses (Ding & Molina, 2020). The pandemic also led to the loosening in such areas as entertainment as many businesses had to downsize due to the quarantine measures and decreasing demand for their products and services.
Automation often has multiple impacts on industries making some areas loosening while making others increasingly tight. For instance, the need of highly skilled professionals increases while the supply is still low. At the same time, the unskilled labor force is available and even excessive, so the demand is shrinking since many operations are automated. Organizations have to consider these trends and their effects on the labor market when developing their talent management strategies.
Employers have to shape their staffing policies depending on the shifts in the industry. Companies should ensure the availability of professional growth opportunities and appropriate compensation. However, governments and trade unions can also have an influence on talent planning. As mentioned above, trade unions can safeguard employees’ rights and high compensations for skilled labor (Parolin, 2020). Governments can launch programs and initiatives facilitating people’s professional growth.
For instance, the government of Saudi Arabia implements an English education policy that is instrumental in satisfying the demand for a skilled labor force (Barnawi & Al-Hawsawi, 2017). Hence, governments manage to address the imbalances in the labor market. As seen from the review of the current trends, industries also have an effect on talent planning as skilled employees with a set of qualifications and traits (problems solving skills, time management, English language proficiency, and so on) are needed.
Regarding the exact strategies and mechanisms organizations should use to remain competitive in the current situation, several major areas can be named. Further investment in staff development and training is essential, nurturing employees has proved to be an effective strategy due to organizations’ ability to make their employees more committed to organizational goals. Providing competitive salaries to manage talent is another effective instrument (Parolin, 2020). Financial security is now highly valued, so companies have to ensure that their high-achievers get a proper financial reward. Finally, companies need to create a comfortable working environment and make sure this aspect is publicized or made visible to the target population.
Talent Management Plan
In order to develop a talent management plan, it is important to identify the primary goals and the current challenges the company faces. It is also critical to analyze the most recent gaps, their relevance, and definite objectives associated with them. Below is the table highlighting the talent management plan for PTP Soda Drinks (see Table 1). Based on this plan, the most effective recruitment methods, as well as succession and career plans for employees, are suggested for consideration.
Table 1. Talent Management Plan.
The company will benefit from the implementation of a modified 6B’s model developed by UC Systemwide Talent Acquisition (2016). The six B’s include such steps as bind, build, bounce, buy, borrow, and balance (UC Systemwide Talent Acquisition, 2016). These six steps are instrumental in addressing the gaps highlighted in Table 1. Due to the company’s need to downsize and use limited resources in the most efficient way, the focus should be on binding, meaning the retention of the most talented employees in the central positions.
It is necessary to know the best performers personally and acknowledge their potential, as well as needs and professional goals. These people should be provided with a set of career opportunities, and their achievements should be recognized and addressed accordingly on a regular basis. Monetary rewards are only some of the options as recognition can take different forms (vertical or horizontal promotion, providing more opportunities and responsibilities, involvement in new projects, and offers of more flexible schedules, among others). Human resources specialists should report on such people’s flight risk every two weeks or a month.
Building is the next measure to concentrate on when managing talent. According to UC Systemwide Talent Acquisition (2016), building is the development of the talent within the company. This step involves the provision of training to the staff, mentoring and coaching, and the use of proper knowledge sharing platforms. The objective related to this area is filling internally approximately 75% of senior posts. Some of the risks associated with this measure include poor training effectiveness, the need to invest funds and time.
Due to the need to downsize, the company should pay considerable attention to bouncing. This step stands for the removal of poor performers and unproductive roles (UC Systemwide Talent Acquisition, 2016). The introduction of clear performance standards and regular testing will help in identifying poor performers. At that, the company should also provide opportunities to acquire new skills (reskilling) and support in professional transitions to new positions.
One of the pitfalls linked to this step is the low morale of employees, especially if the process is conducted in an improper manner. In order to avoid or minimize these risks, it is necessary to plan every relocation with considerable precision and communicate effectively with survivors. Employees should understand why reductions are needed, what exact assessment measures are, and what opportunities people have.
Buying is also a possible option for PTP Soda Drinks, especially when it comes to high-profile professionals who achieved high results under similar circumstances. Bringing in new talent often requires a substantial investment, but it is beneficial for organizations if conducted effectively (UC Systemwide Talent Acquisition, 2016). The solidification of employment brand and the utilization of the best resources are the pillars of this process (UC Systemwide Talent Acquisition, 2016). It is also important to make sure that the expectations and the peculiarities of organizational culture are communicated clearly. The negative side of this measure is a high rate of external talent that failed, and low morale among the existing employees. In order to mitigate these adverse effects, it is necessary to hire a candidate who outperforms internal employees considerably (30-40% better).
Borrowing that is associated with outsourcing is another option that can be employed. Consulting can be instrumental in identifying the existing workforce gaps and filling them. One of the major challenges related to this step is the loss of intellectual property, increasing dependence on the partner and low morale of the existing employees. However, this measure can be an opportunity to develop a network of partners, as well as to adopt and adapt effective projects and models. Finally, the sixth step to take is balancing, as it is important to make sure that these methods have benefits and certain downsize. So that the company could balance the five measures mentioned above, it is necessary to develop diverse scenarios and consider the corresponding benefits and associated risks.
The development of effective job descriptions, person specifications, and competency frameworks is essential for the successful recruitment process. It is possible to focus on the Marketing Specialist position to illustrate some of the aspects of appropriate areas to cover in the documents mentioned above (see Table 1.1).
Table 1.1. Marketing specialist job description, person specification, and competency framework.
Recruitment Methods
A set of recruitment methods should be utilized to address the needs of the company. It is noteworthy that these tools can be used for attracting both external and internal high-achievers. Networking is the central method to employ as it often needs quite limited resources but leads to high results (Taylor, 2018). The development of social links internally and externally can help in reaching the talent.
Social media are the digital domain that can be utilized to recruit people. Such media as LinkedIn, Facebook, YouTube, and Twitter can be the primary channels of communication. PTP Soda Drinks should also use its official website to post the corresponding advertisements and promoting its own employment brand. Although outsourcing is a possible option, this recruitment method needs additional investment, so the company may consider this option in case of emergency. For instance, when the organization needs a large number of employees, it is possible to address an employment agency.
When selecting and recruiting, organizations must pay attention to the current legal aspects. For instance, for UK companies, it is critical to make sure that an applicant has the right to work in the country, as well as reside in the UK. Similar regulations exist in Saudi Arabia, so HR specialists should make sure that the candidate (mainly expatriates) has the right to work in the country. In addition, the two countries also have mandatory criminal record checks for employees, so HR managers have to address the corresponding authorities to ensure that a candidate is eligible for the position. In both countries, companies should also make sure that the applicant has the necessary qualifications and appropriate health conditions to complete the tasks.
Succession Plans
When assessing the potential succession opportunities, it can be helpful to complete the following chart (see Table 2). The present chart includes critical areas to concentrate on when choosing the most potentially successful candidates. As mentioned above, it is necessary to determine employees’ intentions to leave (or transit to another position) on a regular basis. This information may be needed to update the succession plan.
Table 2. Succession Planning.
The development of career plans can be a part of employee development initiatives. Employees should be encouraged to work on their plans so that they remained motivated and had clear goals regarding their career paths (Taylor, 2018). Career plans should include such sections as goals, SWOT analysis, and an action plan (see Table 3). Employees should also be encouraged to review and update their plans regularly, which will enhance their motivation.
Table 3. Career Plan for a Marketing Specialist.
Managing Turnover
It has been acknowledged that the turnover rate during the period of considerable changes taking place in organizations increases. First, downsizing is associated with substantial changes that are often seen as negative. Srivastava and Agrawal (2020) argue that the resistance to change is an antecedent to employees’ intention to quit. Importantly, low morale is one of the most common consequences of turnover. Employees build diverse social links within their workplace, and the disruption of these ties has a negative impact on the staff’s motivation.
Employees’ turnover intention is linked to burnout that can be mitigated by organizational support (Srivastava & Agrawal, 2020). Moreover, people may find the changes negative as they can lead to a decreasing number of responsibilities, projects, and overall career opportunities. In simple terms, employees can find their career prospects doubtful, so they would start looking for professional growth opportunities in other organizations. These fears and intentions are specifically common for high-achievers as these people are active and creative, as well as willing to innovate and take up new responsibilities.
Mentorship and support programs are instrumental in motivating employees to continue working for the company (Srivastava & Agrawal, 2020). Hence, PTP Soda Drinks should have support initiatives for its high-achieving employees and those who can potentially grow. Peer mentorship is another option that can be utilized to retain key talent in the company. Training is also an effective method to retain talent during times of uncertainty associated with turnover (Taylor, 2018). People may need to develop new skills or build resilience, which can be achieved with the help of a training program.
In addition to direct guidance, mentorship, and support during the period of downsizing or other major changes, it is possible to consider employee empowerment as a mitigating factor. Boakye et al. (2020) state that employee empowerment had a positive relationship with employee commitment and a negative relationship with turnover intentions. The researchers claim that the employees who are provided with professional development opportunities and new responsibilities are less likely to have turnover intentions (Boakye et al., 2020). Therefore, during the period of change, it is critical to ensure the availability of professional growth opportunities, especially when it comes to high-achievers. Both direct and horizontal promotion can become an appropriate option for the remaining talent (Taylor, 2018). Moreover, employees can be invited to create projects regarding the reorganizations or diverse organizational changes that could help the company address the challenges it is facing.
It is necessary to add that the strategy of downsizing chosen by the company is associated with both involuntary and voluntary turnover. Voluntary turnover is likely to be higher among the key talent who may wish to leave the company if they see no opportunities for professional growth, burnout, low morale, or fear of being fired. Turnover, in its turn, will result in direct and indirect turnover costs for the organization. At this point, it is important to add that involuntary turnover is “highly disruptive and very costly” and can lead to more considerable losses as compared to voluntary dismissals (Hesford et al., 2016, p. 61).
According to Hesford et al. (2016), the costs associated with an unskilled workforce tend to differ from the costs of skilled employee turnover. These differences may be specifically relevant in some spheres, including the beverage industry.
It is possible to evaluate the potential cost of human resources turnover. Provided, the average salary in the organization is $50,000 and the attrition rate will reach 30% this year. The approximate costs of employee turnover can reach up to $775,685, which is a considerable amount due to the overall company’s financial performance and the challenges it is facing. As far as the exact costs related to staff turnover, these include leaving, recruitment, and training costs (Taylor, 2018).
It is also necessary to consider such adverse effects as lost productivity during the period between an employee is dismissed and no one is hired, and the time when the employee is fired and a replacement is being trained. In addition, costs associated with the lack of motivation and low productivity may also be significant (Taylor, 2018). Finally, the costs linked to the loss of trade secrets and other sensitive data should be considered.
Recommendations
Communicate Effectively
One of the major aspects to concentrate on during the period of downsizing is communication. The process should be transparent so that the stakeholders could clearly estimate their prospects in the organization, the roles they can play, their career opportunities, as well as the future of the organization (Tran & Quach, 2017). The reasons for downsizing and procedures to be implemented should be articulated properly and timely. Both survivors and victims of the turnover process should be fully aware of the reasons behind downsizing and the major steps that are planned.
Notification
Diverse procedures that are regulated by employment and labor laws should be undertaken during downsizing. These standards may differ across countries, but they are compliant with international regulations and recommendations (Collins & Hutzler, 2017). For instance, the notification of the employees who are to be dismissed is a standard procedure. Unless the employee is fired due to violations or inability to fulfill the contract requirements, the person must be notified about their dismissal. According to the UK employment and labor legislation, an employee has the right to receive “a week’s notice per year of service” but no more than 12 weeks (Martin & Broadbent, 2020, para. 10).
In Saudi Arabia, an employee receives an employment termination notification a minimum of 60 days before the day of dismissal (Hammad, 2021). In Saudi Arabia, a certain compensation can be provided to the employee instead of the termination notification. In both countries, the periods of termination notification are usually set down in employment contracts. Therefore, the company should make sure that all victims of downsizing receive notifications in a timely manner.
Compensation
The company should also provide the corresponding compensation to the dismissed employees. Again, the amount to be paid should be set in the employment contract that should comply with the current legislation. As far as the UK employment laws are concerned, employees should be paid no less than a basic award (approximately ₤525 week pay) that is increased depending on the years of service and some other factors (the employee’s age) (Martin & Broadbent, 2020). In Saudi Arabia, employees are usually paid an equivalent of the employee’s three-month payment (Husein et al., 2017). It is noteworthy that the compensation size depends on the employee’s status (Saudi national, expatriate) and other characteristics (age, years of service).
Redundancies
Depending on the scale of downsizing, the company may need to implement a certain redundancy process. Companies operating in Saudi Arabia are not obliged to contact trade unions or authorities when redundancy is planned (Husein et al., 2017). In the United Kingdom, the process is regulated, and businesses must notify the corresponding trade unions and authorities a month or 45 days before the first dismissal occurs (Ornstein et al., 2017). The period of notification depends on the scale of the redundancy with minimal requirements for a redundancy involving 20 employees. If more employees are subjected to redundancy, the notification period is increased up to 90 days. Hence, the company can consider redundancy as an option, but it is recommended to include no more than 20 people in a unit.
Asking for Voluntary Dismissal
It is recommended to ask employees to consider voluntary dismissal. The company should reach poor-performers and employees with doubtful prospects in the organization (Tran & Quach, 2017). In order to identify the target people, it is advisable to conduct performance research (based on KPI analysis and self-reporting). People may have the corresponding ideas, so the exit process will not be associated with serious difficulties for all stakeholders.
Retirements
Early retirements can become a viable option for some employees, so the company should help employees find the optimal package. However, it is necessary to note that this strategy is likely to cover a limited number of people due to the peculiarities of retirement plans. This option is also associated with certain financial losses and can even lead to the loss of top talent. Hence, it is critical to make sure that the most valuable employees will be retained while those who underperform could retire.
Supporting Victims
In order to avoid negative outcomes and mitigate the negative consequences of turnover, the victims of this process should be supported in different ways. In addition, to the provision of the corresponding compensation, the dismissed person should receive transition assistance. Human resources professionals should provide the employee with possible employment options and educational opportunities (Tran & Quach, 2017). This assistance will be instrumental in improving employees’ morale and maintaining the appropriate working atmosphere during the downsizing period.
Supporting Survivors
As mentioned above, it is also critical to support the remaining staff during the downsizing process. It is possible to launch peer support programs where employees will work on innovations and new projects. Training programs should also be offered to help the remaining staff accommodate to the new working environment (Tran & Quach, 2017). Some of these people will have to (and be willing to) take up new or more responsibilities. The company should make sure that employees have the necessary skills and knowledge to complete new tasks. The areas that often need specific attention include leadership, communication, time management, conflict management, as well as some technical skills. Junior staff support programs can improve the motivation of senior staff (Tran & Quach, 2017).
Team-building activities should also be conducted to help employees build new social links and different types of relationships. It is vital to monitor the working atmosphere and remaining employees’ morale to address the challenges that may take place. The remaining staff should receive the information regarding the downsizing process and its benefits, as well as the company’s prospects.
Action Plan
- Develop a clear downsizing plan that will include a list of talent to retain and employees that can (or should) be dismissed.
- Develop retirement, dismissal, redundancy, and transition plans for those who will be dismissed.
- Articulate the upcoming changes during a general meeting with the staff and department meetings, as well as via the corporate email. The reasons for this decision should be provided openly.
- Provide detailed information to and respond to all questions of the staff (both victims and survivors).
- Notify the employees about employment termination and provide notifications to the corresponding authorities if necessary.
- Provide proper compensations to the dismissed staff.
- Offer early retirement options and voluntary layoffs if possible.
- Launch the support program for dismissed people who will be guided during their transition or exit period.
- Launch support programs for remaining employees (including but not confined to training, promotion, mentorship incentives, new projects development, and team-building activities).
- Monitor the working atmosphere and remaining employees’ morale and motivation.
Conclusion
In conclusion, it is necessary to note that talent management can contribute to the successful implementation of downsizing that will help the company remain competitive. The company has to address external challenges such as the COVID pandemic, consumption habit shifts, and the automation of production. Talent management is also undergoing certain changes as new recruitment, and retention methods should be utilized to attract high-profile employees. In order to ensure the smooth implementation of the downsizing process, the company should have a clear plan. The major aspects to consider when creating this plan are provided in this report.
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