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HR departments can play a decisive role in downtimes

Charting employee progression will come in handy in generating cost efficiencies

Gulf News

As per an old proverb, there is an opportunity in every crisis. I believe that in times of austerity, innovation is the only way out.

In strategy reviews driven by market pressures, managements do delve into the working of their various departments, devising ways for business robustness and agility. In times of such strategic renaissance, especially when driven by recessionary challenges, the role of human resources comes under close focus.

Within its multiple functions, training and development is a differentiator that can be greatly leveraged to get better results. We have learnt that in times of business turbulence, don’t just look for out-of-the-box solutions, but look within as well to see what opportunities lie therein.

Employee progression is one such opportunity that we have come across when seeking solutions for cost efficiencies. It is also a key element in succession planning, whereby younger employees are developed to be replacements for senior staff. Succession serves to enhance knowledge retention in the company and can be an alternative to the costly and difficult task of hiring for key roles.

While most business leaders understand the benefits of progression, few organisations accord the needed attention. Progression not only helps in service excellence and staff motivation, but also brings financial benefits for the organisation.

It creates an environment of learning and development that prompts the workforce to adopt this as a way to move up, which in turn spikes motivation levels. How does the enterprise derive cost savings from this strategic push?

When employees move up and replace seniors, they bring with them cost savings due to salary differentials. Progressions undoubtedly result in cost savings, in some cases by as high as 20 per cent in compensation terms. In the past seven years, our organisation has accomplished 10 per cent progression for an over 12,000-strong workforce.

Employee progression has become relevant in the facility management industry, as clients seek to move to a new generation of contracts. The glide path of savings is integral to the contract performance.

However, the complex part of this contract condition is how to accomplish this while being workforce-centric, whereby 70 per cent of the cost is generated for salaries. The glide path of savings over the life cycle of the contract is indeed herculean. Salary revision is an annual feature and achieving savings is difficult, as the headcount purge is not always possible.

However, adopting the progression approach has emerged as an effective tool. Empowered by training and development, this model has helped organisations. I can surely confirm that across most of our contracts, we have achieved this by successfully employing this measure. This move has 360-degree benefits: Sought by employees, loved by HR managers and actively bought into by clients.

Apart from other conventional tools of employee motivation, progression is indeed becoming a most powerful employee retention and brand positioning enabler.

(Tariq Chauhan is Group CEO at EFS Facilities Services.)

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