Ensight: One in four companies cut off employees by 6 per cent or more in 2013

The purpose of Ensight's HR study in Romania initiative is to provide to the HR and business communities qualitative and quantitative data about the trends in human resources.

2014-10-06 17:47:39

54 companies responded to this study, mostly medium and large-sized companies with over 100 employees and a turnover that exceeded 1 million euro in 2012. 90 per cent of our respondents are HR professionals, most of them holding management positions. Our respondents are mainly from the IT&C, financial services, and retail and distribution industries.

Data were collected between August-November 2013 and were interpreted in 2014.

The results of the study show the following:

-Role and positioning of the HR function: The HR function in organizations has not reached the desired maturity yet, most HR leaders being involved in the implementation rather than in developing business strategy or discussions it. About one third of the HR practitioners surveyed admit that their awareness about the company strategy is medium or low.

-The main difficulties reported by HR people: HR initiatives are not sufficiently understood and put into practice at operational level. Furthermore, many of them are not integrated into the company strategy. This suggests a communication deficiency between HR professionals and the beneficiaries of their initiatives – the management team, but also the rest of the organization.

-The role of operational management: Just as in the previous years, HR professionals think that line managers do not take their leadership role seriously enough and that they are not involved sufficiently in assessing and developing the people they lead.

-Performance management: One out of four companies surveyed does not peg the level of remuneration to the performance evaluation results and only three out of four companies is paying its management team and sales staff according to their results.

-Talent management: One half of the companies surveyed have implemented a talent management system and three-quarters of the companies also measure its effectiveness, monitoring a series of indicators.

-Functional mobility: Most of the companies having a job rotation system in place include a maximum of 20 per cent of their employees in these programs. One in three respondents acknowledges that in his/her company managers prevent people on their teams from taking on roles in other departments.

-Employer brand: Social networks (Facebook, LinkedIn, etc.) are used by three quarters of the responding companies in order to communicate their brand to potential employees.

-Priority areas for development where the future need exceeds by far the current state of development are performance management, leadership development and competency management.
The impact of the economic situation: One in four companies surveyed had to reduce the number of its employees by 6 per cent or more in 2013, due to market conditions.

-The number of companies that implemented cost-reduction measures decreased by 14 per cent over the previous year. Among the measures to reduce costs, renegotiating contracts with suppliers was applied by almost 70% of respondents, which is significantly more than in the previous year. Training budgets continue to be cut, for the 6th year continuously since the downturn started. However, cost cutting plans are now in the background: streamlining operations and increasing sales are stated by respondents to be the preferred measures for HR and also for business. Almost half of the companies surveyed have continued restructuring measures in 2014.

Initiatives considered suitable to overcome the crisis but still declared by our respondents as being underused are process redesign, centralization of functions and outsourcing. These are the areas where we expect many companies to launch projects in the coming years.