In today's fast-paced business world, resources are crucial to project success as they possess the skills and expertise to deliver quality outcomes, solve problems, and more. Hence, organizations must optimize and retain their talent pool to stay competitive and meet their business goals.
However, when resources are hired/fired frequently, it negatively affects the company's talent pipeline, financial stability, and market reputation. Therefore, organizations adopt advanced resource management techniques to minimize the hiring/firing cycle and maintain a competitive edge.
This blog will explore how SAVIOM’s resource management solution can help reduce hiring and firing cycles.
Let’s begin!
1. How do frequent hiring/firing cycles impact a business?
The hiring/firing cycle refers to the repetitive process of recruitment and termination of organizational resources. If this happens frequently, it will negatively impact the business.
Let’s see how:
Frequent hiring/firing cycles can be costly for a business as they spend a significant amount on recruitment, training, onboarding, advertisements, etc., which becomes useless once the employees are terminated. Additionally, if the reasons for termination are biased, it can cause legal expenses and potential lawsuits.
Besides, the constant hiring/firing cycles negatively impact the brand reputation, making it challenging to attract and recruit top talent. This also creates instability and uncertainty among employees, causing disengagement in work and low morale. As a result, it will lead to project delays, substandard quality of deliverables, unplanned attrition, and reduced productivity.
Having listed down the outcomes of hiring/firing cycles, let’s understand how resource management can help reduce it.
2. How does resource management help reduce hiring/firing cycles
Frequent hiring/firing cycles impact the organization’s profitability, image, and ability to keep pace with its competitors. However, by leveraging advanced resource management software, like SAVIOM, companies can streamline the entire resource management process, minimizes the hiring/firing cycle, and ensures optimal resource utilization.
Here are some ways:
2.1 Provides foresight into pipeline project demand
A resource management tool with forecasting and capacity planning features can help managers proactively foresee pipeline project demand and mitigate skill gaps effectively. For instance, an apartment construction project requires 6 architects and 4 civil engineers starting in a month. Within the organization, there was a shortage of 3 architects and an excess of 2 civil engineers.
Hence, for a shortage, firms can initiate training/upskilling of existing resources or use an out-rotation/backfill strategy. Alternatively, for the excess, they can bring forward the project timelines or sell the additional capacity. In this way, organizations can minimize the hiring/firing cycles, reduce overhead costs and deliver projects on time.
2.2 Helps create a blended workforce
When managers lack foresight into future projects, they fail to understand the resource demand accurately and make wrongful hiring decisions. However, by leveraging advanced software, managers can predict if the resource requirement is one-time or recurring and build a blended workforce accordingly.
For a one-time requirement, they can deploy contingent resources. Contrarily, if it’s a recurring demand, they can leverage permanent workforces. Additionally, based on the contingent employees’ performance, the company can absorb them permanently for future projects. Therefore, building a blended workforce will prevent unnecessary hiring & firing and reduce overhead costs.
2.3 Enables allocation of cost-effective global resources
Organizations must appropriately assign resources to the tasks to ensure the projects are delivered on time. Here, the tool’s enterprise-wide visibility will help managers identify and assign the best-fit and cost-effective resources to projects.
For instance, a software development project requires a product designer with visual design skills. For this, managers can use advanced filters like job title, department, location, and competency to identify competent designers from low-cost locations like India and Mexico. In this way, firms can minimize project resourcing costs and ensure successful project delivery.
2.4 Fosters shared service across matrix boundaries
A successfully shared service implementation results in 30% or more cost reduction through standardization, consolidation, and re-engineering. - Pwc
This states that facilitating a shared service model will improve productivity and reduce organizational costs. In a matrix organization, a lack of workforce visibility leads to silos of information. As a result, managers hire resources from external channels, though similar ones are available within the company, leading to hiring/firing cycles.
An advanced tool offers 360-degree visibility of resources and their information related to skills, cost, competency, role, etc. This will allow managers to assign the best-fit resource across departments for the project. This helps organizations increase operational efficiency and minimize hiring/firing practices.
2.5 Facilitates upskilling/training programs
Organizations hire niche-skilled resources to meet the increasing demand for advanced tech skills like Robotics, AI, ML, etc. Contrarily, when a skill becomes obsolete, they fire resources that can no longer be deployed to projects. To avoid this, companies can leverage an enterprise-grade solution that provides foresight into future project demands.
With advanced resource forecasting capabilities, managers can assess the skill gaps accurately and implement appropriate training/ upskilling measures beforehand. For instance, the tool can help managers select suitable employees for appropriate IDP and L&D programs to boost their professional growth. This will improve their work performance and prepare them to take on new or higher roles, thereby minimizing hiring/ firing drives.
2.6 Ensures effective bench management
Projects usually experience sudden ramp-down activities once it reaches the execution/closure stage. The lack of visibility into the ramp-down phase and future projects makes it challenging for managers to identify employees who will land on the bench. As a result, a large bench size increases the company’s overhead costs, leading to termination.
Therefore, they need robust resource management software with real-time analytics, such as people-on-the-bench and project vacancy reports, that can help managers identify benched resources and assign them to suitable projects accordingly. In addition, resources whose skill doesn’t match project vacancies can be given on-the-job training or shadowing opportunities. This way, organizations can effectively maintain the resource health index and reduce the hiring/ firing cycles.
3. Bottom line
“Your workforce is the most valuable asset. Their knowledge and skills represent the fuel that drives the engine of business.” - Harvey Mackay, an American Businessman
Organizations must judiciously and intelligently tap into the potential of their human resources to get the best out of them. With layoffs becoming a frequent practice globally, companies must implement effective strategies combined with modern resource management software to minimize hiring/firing practices. Additionally, it will help organizations have a balanced resource mix, achieve their strategic goals and gain a competitive edge.
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