Factors Affecting Business & Staffing Strategies

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Hello friends.

Now, let’s talk about how an organization derives its staffing strategy?

Well, “an organization’s staffing strategy is derived from its overall human resource strategy”. Because staffing is a function of human resource management.

Then, “the strategies developed for each HR functional area should support the overall human resource strategy”.

Similarly, “the strategy of each functional area of a human resource should complement the strategies of the other areas as well so that the organization’s higher-level human resource strategy is fulfilled”.

Basically, If the strategies of individual departments will not talk to each other further, then your department-level strategies will be weak and at the same time, the functional strategies which are at the organizational level will also have an impact…

So, you have to see that there is a responsive function within HR so that the overall strategy that you have, should meet the organizational functional strategy.

Now let’s discuss the “organization life cycle and strategy choice”.

Well, the organization exists in a few phases. As you can see, the first phase is the “start-up” phase which is an initial phase where the organization has just started.

At the time, the size of the organization was also very small. and the core value in this phase is the “inspiration”. This means that the organization started based on inspiration.

At that time, all the assumptions are based on the values where they create their logo and create their identity.

Then after a certain period of time, the organization moves to the “growth” phase where the values and symbols convert into an “artifact”... And after that, when the organization moves slowly to the “maturity” level, the overall look out of the organization changes entirely because they have to take their work to another level than the work that they did on the initial level.

Now, the values of the organization, the beliefs that are there, there is a need to take them up one level because now the organization is no longer a start-up organization. Yes, the elements of a startup organization will be integrated with the current value system. (Correct?)

Well, after coming to the maturity phase, either any organization goes into a decline phase or else it gets inspiration and gets renewed again.

Now if we see what are the strategies in different stages of the organization in terms of business and in terms of staffing? Well, in the initial phase where the organization is starting to grow where generally innovation and differentiation strategies are used so that the organization can differentiate itself from its competitors. (Got it?)

Because you are new to the market, and if your organization offers what the rest of the people are offering, then perhaps a unique selling proposition will not be created. So, you have to create that uniqueness so that your organization can be different from other organizations. (Right?)

Now that they are less established, that's why higher-risk employees come to this organization. What are higher-risk employees? Well, they are the ones who believe more in experimentation and they are ready to take up a lot of challenges.

Well, in the initial phase, the organization has to invest a lot of money and resources in its staffing activities so that they can bring the right talent to their organization as a result of which their growth journey becomes smooth.

Then, the internal pool they have at this particular juncture is very limited. Due to this, they have to bring in new employees from outside to grow their overall talent pool. And this is the process they have to repeat very often so that they can grow their organization by bringing fresh talent from outside and if you want to sum it up at this particular juncture, then all the focus is mostly on the external talent…. (I hope this much is well understood)

Now, let’s have a look at the “Strategy during maturity phases”.

Now that the organization has grown, then comes the maturity phase. Well, the products and services have fully evolved and the product’s market share has also stabilized well enough and standing is created in the market for that particular organization.

Then, “their focus shifts to maintaining or obtaining further market share through cost leadership”.

Now what you do is streamline all your operations and focus on efficiency. Well, if you successfully differentiate your product in the initial phase, then in this phase you can offer discounts on those products and make the product more efficient.

You can also break down the bulk products and offer them in segments to reach out to the larger market.

So, for instance, let’s say the product packaging that you have consists of 12 pieces. You can divide the pieces and sell 6 pieces at a lower rate too. Because now you have earned a reputation in the market.

Now, at this particular stage, you already have quite a good internal talent pool. Therefore, your entire focus is on internal hiring. You bring less external talent and focus more on developing the internal pool that you already have.

So, when the internal talent pool starts developing, you also start preparing for their succession planning. You plan which employee will succeed whom in the future? And how to develop them? What will be their career path? Well, all these are the strategies for the maturity phase. (Got it?)

Now, the next one is the “decline” phase… Well, now if your organization starts to go into a decline phase, this means that your overall market is shrinking and your business performance has started to get weak.

Well, in such cases, you can either use the “cost-leadership strategy” and allow the decline to continue because the business is no longer profitable.

Therefore, at this particular point, you think about reducing the labor costs and other included costs. Or in this particular phase, you can do one more thing. You can try to revive your products and services.

Well, you can try to bring some major changes to your products and services to revive yourself.

Now, “if you choose to try to change the product or services, you can typically adopt the specialization or differentiation strategy”. For this, you will need a major change in the talent mix and you will again need an external approach. Why?

Well, because at this particular point, your internal pool is saturated entirely, their skills and competencies are stagnant, and to make them move forward or develop them, you will have to infuse some fresh energy into the organization which is only possible if you bring in talent from the outside and they will try to make efforts to revive your organization… (Clear?)

Now, any staffing strategy has 9 different elements.

Well, the first is, “if we want a core that is a fixed or a flexible workforce?”

The biggest advantage of a core workforce is that they can be with you for a longer period of time. They can understand your organization’s culture, values, and ways of working well enough.

Whereas, the advantage of the flexible workforce is that you can include the subject experts whenever needed in your organization and work with them based on the contractual employee.

Then the next element is, “Do we prefer to hire internally or externally” for a particular position? If you hire internally, then the candidate knows how the work must be done, what are the expectations from the role? And eventually, they start showing instant results.

Whereas, when you hire externally, then they come with a very different viewpoint and perhaps some points that you may have neglected earlier may be over-focused, due to which you get an edge over the product or services you have and the requirements of the overall organization. (Correct?)

Then the 3^rd element is, “Do we want to hire for or train and develop needed skills?” Do we want to hire a skilled candidate? Or, do we want to develop the skills of the internal pool that we already have?

Then the 4^th element is, “Do we want to replace or retain our existing talent?” Because maybe their skills are overrated and are no longer required.

Moving on to the 5^th element, “What level of which skills do we need and where?” and where do we explore cross-functional specialization?

Then the 6^th element is, “should we hire the staff proactively or reactively?” Suppose you think that people do not stay in a particular position for long, then how should they create a talent pipeline in a way so that if someone leaves that particular position, someone next will immediately replace him or her. Or when that person leaves, we will then hire a new person from the market.

So, it happens proactively means foreseeing the future and hiring in advance or we hire reactively meaning when the incident happens, after that, we start making hiring. (Are you getting it?)

The 7^th element is, “Which jobs should we focus on?” Which jobs should we think about more proactively? And work accordingly.

Then, the 8^th element is, “Is the staffing treated as an investment or a cost” in the organization? This question is related to an individual’s mindset.

If you feel that your organization is treating the staffing activity as an investment, then they will invest in people even after they join the organization. But, if they feel that it is an additional cost, then they will do anything to reduce or minimize the cost. Either you won’t get adequate developmental opportunities or your overall experience might be affected within the organization.

Lastly, the 9^th element is, “will the staffing function be centralized or decentralized?” Centralized means one single person is handling the entire staffing function. Whereas decentralized means HR functions along with other operational functions.

Well, the appropriate people can step in when the requirement of assessing the competencies arises. So, if we follow a decentralized approach, the roles and responsibilities get divided. Whereas in a centralized approach, there is only one power center from which all the roles, feedback, and requirements are controlled.

If you have any queries or comments, click the discussion button below the video and post there. This way, you will be able to connect to fellow learners and discuss the course. Also, Our Team will try to solve your queries.

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