Strategic HR Management: Challenges and Solutions for UK Firms

This report provides an in-depth analysis of the strategic human resource management challenges faced by private organizations in the UK. It identifies key issues, including recruitment difficulties, employee retention problems, labor market challenges, and the management of diversity within organizations. The report examines the impact of economic uncertainty on HR practices and highlights specific examples of challenges faced by companies such as Nestle, Honda, and others. It delves into the issues in recruitment, such as skill shortages and the challenges of finding the right candidates, and explores innovative recruitment strategies like undercover recruiters and referral programs. The report also addresses the complexities of diversity management in organizations, particularly in the context of increasing globalization and the need to accommodate employees from various cultural backgrounds. It offers insights into how organizations can overcome these challenges by adopting effective strategies and practices to enhance HR effectiveness and drive organizational success.

Strategic
HR management

Table of Contents
Introduction..........................................................................................................................................3
QUESTION 2:......................................................................................................................................3
Human Resource Challenges:..........................................................................................................3
Challenge1 - Issues in Recruitment..................................................................................................4
Challenge2: Diversities in Organisations.............................................................................................7
Issues:...............................................................................................................................................7
Conclusion..........................................................................................................................................11
References:.........................................................................................................................................12
INTRODUCTION
Every organisation faces some type of human resource challenges. Each organisation has its
own challenges which can be differ from other. Market changes from time to time which causes
issues in human resource department of any organisation (Mehta and Mehta, 2009). With changing
world, it is important to look after the strategic policies of human resource department (Stavrou-

Costea, 2005). Development in market has changed the business scenario.
This report focus on challenges which are faced by different organisations in UK. It has
selected UK based private organisations for further study regarding the HR challenges. It throws
light to HR strategies and practices which can help organisations to overcome from these issues.
Different challenges have different strategies to solve them, so this study recommends private
organisations of UK to select right strategies and practices as per the challenges they are facing.
QUESTION 2:
Human Resource Challenges
UK is right now facing the problem of economic uncertainty which leads to many
challenges in private organisations working there. This economic change in country also affects the
human resource management of these organisations (Agarwal and Ferratt, 2001). The lists of
challenges which are being faced by private organisations are as follows:
1. Problem of Retention: Retention is biggest problem in current time. It is a major challenge
for companies to retain their talented and deserving employees (Budhwar and Khatri, 2001).
They quite organisations due to many issues like salary dissatisfaction, mismatch job,
tendency to get bored, more expectations etc. Nestle in UK faced the problem of employee
retention which later was solved by organizing recruitment team.
2. Issues in Recruitment: Companies somewhere feels shortage of skilled candidates. The
number of graduates is less than the number of candidates needed by companies. It is
complex task to find right candidate for right position (Lengnick-Hall and Lengnick-Hall,
2003). There is a need to bring balance in recruitment processes which does not lead to
wastage of time and resources. Private Banks of UK also suffered from skilled candidate
shortage during the time of recession.
The above figure represents the lack of employment in the UK due to the inappropriate eduaction.
Illustration 1: Percentage change in employment
Source (Scarpetta and Sonnet,2012)

3. Challenges in labour market: Britain is facing huge challenge in case of labour market. This
challenge results in unemployment and increase the risk factor. Recession is one of the
causes for creating this problem. After recession, there is substantial gap in labour
production (Jordan and Düvell, 2002). The weak productivity and performance of UK
industries shows poor output with insufficient employment. Manufacturing companies like
Honda, Jaguar fight with challenge of gap in labour production due to recession in UK. The
main reason behind the labour market failure in UK is skills gaps, poaching, labour
immobility and inequality. The increasing unemployment rate of the youth shows the
problems and difficultioes faced by them in labour market.
4. Diversities in Organisations: Companies face diversities among employees in different
fields. As market of present time is reaching to global level, so it tends to increase in
diversities. Companies possess employees from different regions having different culture,
languages, perceptions (Dreachslin, Weech-Maldonado and Dansky, 2004). Organisations
face challenge in using and managing these discriminations for positive purpose. This is
especially true for hospitality firms like Hilton, Marriott where bartenders, waiters etc. are
from Asian nations.
5. Issues in Training and development programs: With the changing time, companies are also
changing their method of working. For applying new techniques and devices, firm needs to
conduct proper training programs but due to the lack of proper participation of employees,
they are hesitating to provide them proper training. This results in improper development of
employee's skills and knowledge. Companies like Tesco plc, British Airways, Care UK
needs to provide effective training programs to their employees for increasing theior career
opportunities (Scarpetta and Sonnet, 2012).
From the above challenges, two main human resource challenges which are to be discussed
properly in detail are:
Challenge1 - Issues in Recruitment
Issues:
Private organisations of UK are facing many problems in recruitment field of Human
Resource management. As per the current scenario, organisations are suffering from skill shortage
issues. This generally takes place in industries related to engineering and digital sectors (Banfield
and Kay, 2012). Due to this, companies do not get the right type of candidate and this creates delay
in decisions as well as actions (Quintanilla and Ferner, 2003). This delay in decisions and actions
leads to decrease in production and performance. Nestle face issues in hiring 6000 candidates which
later was sought out by forming recruitment team. During the time of recruitment, middle and top

management is also facing the same problem at some points. Not only higher organisations but
SME's are also going through the same issues (Cassell, Nadin, Gray and Clegg, 2002). SME's are
backbone of the UK economy which is somewhere connected to higher industries, which leads to
suffer them also. Many IT firms such as Abbot data store, Acxiom ltd are suffering from IT- related
skills shortage which tends to delay in formation of new technologies, products and services. IT
skill gap is most important factor in failure of IT industries (O'Meara, 2013).
This recruitment problem affects talent retention in private sector. Other issues in
recruitment processes are:
 In many companies, new candidates are hired by junior HR executives who lead to hiring of
wrong candidate because they do not have proper experience. This creates wastage of time
and money both (Butterfield and et.al. 2003).
 Sometimes in SME's managers do referral hiring which prevents them from selection of
right and desired candidates. Managers need to hire candidates according to their skills and
abilities (Williams, 2007).
 Social Media is playing important role in present time for recruiting the candidates but this
type of recruitment is only worthy for creative agencies, event management companies not
for higher brands and multinational companies (Sims, 2007). Recruiting through job portals confuse companies in hiring right candidate because
sometimes they call wrong person for wrong post which leads to mismatch and it creates
loss to company (Mirata, 2004).
Strategies:
Proper strategies are used by different organisations to overcome the issue of recruitment.
They use innovative and creative strategies to get rid from this issue (11 Must have recruitment
Practices for HR Managers & Startup Founders, 2015). Each organisation has its own way to
sought out this problem. The strategies are: Undercover Recruiter Strategies: Companies are hiring undercover recruiters for
recruitment of candidates. This undercover recruiter tries to know the skills, abilities and
knowledge of candidates before hiring. They provide candidates a real world so that they
can implement their knowledge and can show their potential. (Simons, 2011). It makes
recruiters to know more about those candidates like how they take challenges?, their hidden
qualities. For Example, First Merit Bank uses this strategy for recruiting the candidates.
They hire a undercover recruiter who observes candidates by giving them tasks which helps
them in knowing candidate's communication skills, convincing skills, other qualities, etc
(Sims, 2007). If we take another example then the famous brand of cars Volkswagen also
does same thing which help recruiters in knowing how candidates behave as employees and

how they try to interact with customers. Innovative Referrals Strategies: Many companies use innovative referral strategy to hire
new candidates. The companies like Carmax and Quicken Loan uses this strategy in the
form of recruiting strategies. Quicken Loans provide training and teaching to their
employees about referral process whereas Carmax uses a blue jelly bracelet to attract
employees towards the new opportunities in company (Greenberg, 2014). Other companies
can also use such type of innovative and fresh strategies to hire skilled and desirable
candidates (Reilly and Williams, 2012). Offering Incentives Strategies: Companies try to attract candidates by offering them
attractive packages (Recruitment agency advice: Two concerns for recruiters in 2015, 2014).
Many multinational companies like Microsoft, Google provide attractive offers by using this
strategy to their employees. This makes employees to work with full loyalty and trust.
Attractive incentives, bonuses, etc. also helps in improving performance of employees
which later helps in achieving desired targets (Philips and Edwards, 2008). These attractive
offers increase number of candidates to participate in interviews which helps in selecting the
right talented candidate. Use of latest technology Strategies: Present time is totally based on latest technologies.
Companies are using these technologies in handling their different processes and
recruitment is one of them (Agarwal and Ferratt, 2001). There are many companies like SAP
that provide ERP systems to integrate all the work of companies. These help in shortlisting
the right candidate for right job. It prevents time wastage with less documentation. They can
store resumes or cv's of candidate in database for future use. Deloitte use latest techniques
for recruitment procedures like using social media, job portals and ERP systems to handle
all documents properly.
HR Practices: Multitasking Gene: Companies like to hire those candidates who can do multiple tasks.
They prefer those seekers who like to take initiatives. This makes them to understand the
environment and functioning of companies more easily. Multitasking candidates also like to
take challenges which enhance their confidence and decision making power (Recruitment
agency advice: Two concerns for recruiters in 2015, 2014). Companies feel comfortable in
changing the role and positions of such employees. Talent over Experience: Talent is what companies want in their employees. At the time of
recruitment, companies try to focus on talent and skills of candidate rather than experience.
Companies like to hire new and fresh blood because somewhere they try to mould
themselves as per the norms and functionality of companies and secondly they do not resist

themselves from change (Dreachslin, Weech-Maldonado and Dansky, 2004). Experience
brings expertise but it keeps old employees away from latest updates. So companies like to
prefer talented candidates more rather than experienced.
 Recruitment Timing: While hiring candidates, it is important for companies to focus on
recruitment timing also. Recruiters try to formulate processes in such a way that it neither
becomes too lengthy nor too short. As too lengthy processes results to wastage of time and
money and too short processes leads to hiring of undesirable candidates (Headworth, 2015).
MFI and land of leather use recruitment strategy in cost and time efficient manner.
CHALLENGE2: DIVERSITIES IN ORGANISATIONS
Issues:
The next challenge which is being faced by UK is diversity in organisation. Time is
changing and with it face of UK is also changing. The country is facing diversities in many fields
like age, sexuality, culture, disability, etc. It becomes very difficult task for private organisations to
look after diversities. It is important to satisfy all employees regardless of age, culture, religion, etc
(Human, 2005). Diversities in organisations results in conflicts which create competitive
environment thereby leading to great loss. It is a big challenge for organisations to manage these
diversities and to use them for profit (Dreachslin, Weech-Maldonado and Dansky, 2004). Diversities
are more faced by large and multi-national organisations like Microsoft, twitter, Facebook, Google,
etc because they have huge workforce with different functions and divisions. Professor Lynda
Gratton of London Business School says that it is great to work with diverse team but it is difficult
to manage them. Technology industries like twitter, Facebook are facing big diversity problem.
Candidates of different perception, culture, gender work together for the success of organisation
(Thomas, 2011). These differences sometimes lead to formation of grievances among employees
and employer. These grievances create conflicts and disturbs friendly environment of organisation.
Black and ethnic minorities used to face racism in private organisations of UK. The number of
black people working in this country is less including organisations like channel 4 and Walt Disney
as compare to other organisations. Ethical diversity is an issue which is generally faced by
employees working here (Romanenko, 2012). The number of non-native citizen has risen in UK
which increases the differences of culture, languages, educational background, etc. (Diversity in the
workplace: an overview, 2015).
Strategies:
With increase in these diversities in workforce, companies are formulating policies and
programs in the field of recruitment, promotions and retentions (Thomas, 2011). There are different

strategies which help in managing and maintaining the diversities properly and effectively. Some of
these strategies are as follows:
 Equality Objective Strategy: The main and important objective of any company is to
provide equal rights to every employee without considering their differences (Gotsis and
Kortezi, 2014). For them, both male and female employees are equal and possess equal
rights. They focus on the work of employees and results which they are providing to them
(Romanenko, 2012). BBC uses this strategy to provide equal opportunities to every
employee. They focus on potential of employees by looking beyond the diversities that
organisation possess. Enterprise Rent-A-Car generally face gender diversity in their
company which was solved by proper mentoring, communication and effective leadership
for promotion of women. Team work Strategy: Companies divide their employees into team, so that they can involve
with each other and this method decreases the differences among them. They try to remove
diversities through proper communications, meetings, and discussions (Human, 2005).Ellen
Pao vs. KPCB and Intel are using these techniques to make their employees feel
comfortable, that helps them in accepting environment more easily and also makes their
employees to know each other. Training and Development Strategy: Companies can provide proper training to their
employees so that employees can improve their skills and abilities which decrease
differences among them. Different programmes are organised by companies so that
employees can know the culture and views of one another (Thomas, 2011). Training strategy
broaden the thinking of employees which later decrease the conflicts among them(De Vita
and Case, 2003). IBM organizes many programs for building global workforce and to satisfy
their different customers globally. Microsoft is providing sexual harassment training to
employees to remove gender discrimination. More the diversity, company can attract more
diverse customers towards them.
 Encourage Interactiron Strategy: Employees need to interact with each other to maintain
relations and to know more about each other. This interaction helps in removing grievances
which creates a healthy relation with supervisors and managers (Seven Steps to Effective
Diversity Management, 2011). Encouraging employees to work on different background or
role helps them to increase their communication skills and knowledge in that particular field.
This strategy also helps in changing perception of employees regarding the work or role of
their co-workers. This makes them to accept new challenges and to handle new risk which
increases their confidence and awareness towards their responsibilities. Honeywell organize
a diversity committee to handle such issues.

Along with above strategies, companies can take measures as mentoring, business etiquettes,
business norms, value system and communication to handle diversities (Dreachslin, Weech-
Maldonado and Dansky, 2004).
By following above strategies, diversity will not work as burden for companies and
employees as well (Reilly and Williams, 2012). They can decrease discrimination which leads to
increase talent and work efficiency of employees. Diversity management inspire organisations to
work at international level.
HR Practices:
 In response to changing labour market, managing diversity will lead to long term success
and maintain the cultural changes (Seven Steps to Effective Diversity Management, 2011).
Coca Cola forms attractive offers to make employees talk about their new opportunities.
This strategy attracts more candidates towards organisation.
 While creating policies, practices, rules and Regulations Company tries to focus on equality
in such a way that it will not affect organisational culture and environment (Human, 2005).
 Strategies used for diversity may not work for another, so companies are analysing it time to
time and using the appropriate strategy in solving issues (O'Meara, 2013).
 Companies are conducting panel interviews which have diverse interviewers who help in
eliminating biasness from selection procedure (Pritchard, 2007). Wipro used to conduct
panel interviews which make them to know candidates from close with different
perceptions.
 To remove gender discrimination, companies are creating new strategies like they are
providing paternity leaves to males, childcare facilities in organisations itself and family
related leaves (Carter, Anderson and Shaw, 2000).
The challenges, recruitment and diversity are main and important problems usually faced by
companies. Human resource department faces lots of challenges time to time (Dreachslin,
Weech-Maldonado and Dansky, 2004). Organisations need to focus on innovative and
creative ideas for creating appropriate strategies. Recruitment is one of the important
processes, organisation need to handle it with balance (Pritchard, 2007). To manage
diversities, organisations have to train employees to accept each other's culture and to work
with cooperation and coordination. It helps in relation maintenance with decrease in
conflicts (Lengnick-Hall and Lengnick-Hall, 2003).
CONCLUSION AND RECOMMENDATIONS
Companies have to work according to the market. There are many ups and downs takes
place in market which any how affects the organisational growth and success. Main task of any

company is to survive in such type of environment. While trying to survive, some companies find
their hidden potential and companies loss their positions. According to that companies have to
formulate their strategies. If there are challenges then there will be solutions also. Companies have
to focus on those solutions or strategies to fight with challenges. Recruitment, diversities, employee
retentions, conflicts are part of every company. Instead of getting shattered from them, companies
have to continuously search the right, innovative, creative and fresh ways. These challenges bring
the right and desirable company to heights and help them in knowing their hidden potential. These
challenges give industries to continue their competition and to set higher targets and goals.
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