HUMAN RESOURCE MANAGEMENT

ASSIGNMENT ON

HOW COMPANIES DEAL WITH EMPLOYEE

SHORTAGE

SUBMITTED TO, SUBMITTED BY,

Dr. RESHAM CHOPRA KULDEEP SEN

NAINA JAIN
STRATEGIC HR INITIATIVE TO TACKLE EMPLOYEE SHORTAGE

Strategic HR Initiative

Strategies for
managing shortages

Recruit new permanent employees

Offer incentives to postpone retirement.

Rehire retirees part-time.

Attempt to reduce turnover.

Work current staff overtime.

Subcontract work to another company.

Hire temporary employees.

Redesign job process so that fewer employees

are needed.

Source: Jeffrey A. Mello, Strategic Human Resource Management, p. 140

 Sundaram Medical Foundation:
Excellence in Community Health Care Delivery

Dr. S. Rangarajan (1945-1997), Founder Chair, SMF

Sundaram Medical Foundation (SMF') was established in 1990, by Dr. S. Rangarajan, a

Chartered Accountant who subsequently trained in General Medicine (MD). Dr. S. Rangarajan,
who earned an MBA in 1988 from University of California, USA was driven by the motivation
and zeal to improve the health care delivery systems for thej}niddle class Indian population. He
gave a shape to his vision in the form of SMF located in one of the middle class settlements in
Madras, (Annanagar, Shanthi Colony).
SMF was established as a "not for profit" charitable trust with the financial backing and
administrative support of Sundaram Finance group of companies. Frondhe beginning,' SMF was
endowed with the traditional excellence of TVS group of companies. It attracted.a committed
group of doctors and medical professionals. As of2005, I/3rd of the outpatients and l/6thof in-
patients were provided free health care.
Taking on a wide range of issues related to paramedical staff and more specifically
the nursing staff, the Nursing Director Ms. Marget G. David mentioned,

"In the hospital industry in India, Nurses as a group of employees register the largest turnover in
the hospitals. This is partly due to the fact that most nurses join the hospital at a very young age
after training and move out of the hospital or city in due course after marriage. Also, talented
nurses are in short supply. There is a very lucrative market for nursing positions in the middle
east. The training exposure and the experience in hospital environment like SMF makes these
nurses the most sought after resources.
"SMF entployed about 250 nursing staff (20 of them in supervisory cadre). Roughly one
third of them left the hospital in a year."

Improvement in Recruitment procedure: Over a period of time, SMF has. evolved a

procedure to recruit nursing staff with appropriate attitude .The target segment for nursing staff
recruitment is a graduate with appropriate nursing training in the area of specialization. A clinical
psychologist had designed a sequence of real life(based) experiences to assess the attitude of
applicants before they are recruited as nurses. In the interview, their response is carefully
assessed to decide on their ability and attitude to work for SMF.
Encouraged employee union: SMF was probably one of the few managements in hospital
industry in India to encourage employees to form a union. SMF management was probably one
of the few managements in hospital industry in India to encourage employees to form- a union.
Accordingly, an union under Indian National Trade Union Congress (INTUC) was formed in
2002 to provide a forum for discussion with the management on issues related to employee
welfare and remuneration. Based on principles of transparency, information sharing and
industry bench marking an agreement effective for 3 years was signed in 2002.
Compensation and benefit: At SMF employee compensation included a basic pay, DA, HRA,
conveyance allowance, Leave Travel allowance(LTA), and washing allowance, in addition to
8.33% bonus and gratuity. Subsidized food, study loan to children(upto 50% supported and
written off by SMF), emergency loan of Rs.10,000 and soft loan of upto Rs.50,000 were some
tangible benefits to employee. Open and transparent organization environment, several stages
of career advancement, opportunity for educational and professional training were additional
distinguishing features.
Training and development: Employees were encouraged to qualify on skills and education
further by formal training. Some examples include a secretary wanted to do a program on
hospital management and SMF encouraged and funded it. From stores department an
employee was helped to study a diploma program in materials management.
Fee for service: SMF operated oWluyatom of "fee for service" to its consultants, a system
which is prevalent in USA and Canada.Undttthil scheme, a consultant is paid a certain
percentage of fee charged by him. The conlluttAntis responsible to build traffic. The hospital
retains a pre-determined share of this fee.
Initially, everyconsultant was offered a monthly (consolidated) compensation of Rs.30,000.
This is (provided) to support him to establish and manage his patient traffic during initial periods
of incubation. The consultants are encouraged to evolve in a natural way by establishing their
reputationover a period of time. DUring this period, there is no pressure on them to build p~tient
volume. Whenpatient traffic improves based on simple calculation involving the consultant fee
and fixedcompensation a breakevon volume (on traffic) was identified. When the consultants'
patient trafficcrosses this volume, he is moved from fixed compensation to fee for service
scheme.
Work current Staff overtime: A consultant in SMF is expected to perform a number of
activities other then patient care alone. The only requirement from SMF is that the consultants
should find a way to manage their patient care without compromising on (health) care quality.
But as the consultants were not given any monetary benefit for their additional services this led
to separation of the employees. So, there was a need to improve the compensation structure.
According to the CET of SMF, the simple model based on fee for service alone would not be
sufficient. We need to gradually move on to a compensation style which recognizes the time
spent on non-patient care areas by a consultant.

PUNJAB NATIONAL BANK

One of the frontrunning public sector banks of India, Punjab National Bank (PNB) is projected to
have a business of Rs 10 lakh crore by 2013. It registered a business of Rs 4.35 lakh crore in
March this year. The progress, however, could soon be hit by shortage of staff.

According to the General Secretary of the All India PNB Officers’ Association, K D Khera: “The
bank has a staff strength of about 57,000 in all cadres. Of this, one-third would retire by 2013.
"The bank faces a shortage of at least 15,000 employees in all cadres across the country, which
is affecting the branch expansion plans of the bank," AIPNBOA General Secretary K D Khera
told reporters here today. "The bank faces a shortage of at least 15,000 employees in all cadres
across the country, which is affecting the branch expansion plans of the bank," AIPNBOA
General Secretary K D Khera told reporters here today.

Recruitment of new permanent employees: The General secretary of All India PNB
Employees’ Federation, P R Mehta, said: “Employee salaries and other benefits constitute 16
per cent to 20 per cent of the total expenditure of the bank. The bank has been consistently
banking good profits. So, recruiting another 15,000-20,000 across all cadres is a viable option
for the functioning to continue smoothly.”

Work current staff overtime: PNB is shedding 1,200 employees every year. The average
employee age in PNB is of 50 years and almost 1,200 employees are retiring every year so the
existing staff has to overwork.

Outsourcing not a viable option: “A public-sector bank carries out operations in semi-urban
and rural areas. So. Like the new generation banks, which outsource many of their services,
cannot outsource their services.
 Heusden-Zolder
Heusden-Zolder is a municipality located in the Belgian province of Limburg near Hasselt. On 1
January 2006 Heusden-Zolder had a total population of 30,769. The total area is 53.23 km
which gives a population density of 578 inhabitants per km.

Heusden-Zolder is home to almost 2000 immigrants from all over the world. This is due to the
(now closed) coal mine of Zolder. During the 1960s Belgian coal mines faced an enormous
shortage of employees. To address this problem, foreigner laborers were encouraged to
immigrate and work near the mines. After their closure (the mine in Zolder was the last one in
Belgium, the Netherlands and Luxemburg to close in 1992) most of the immigrants chose to
stay.
 Canada's Oil and Gas Equipment and Services (OGES)

With an internationally recognized expertise in extraction equipment, drilling technologies and

maintenance systems the OGES industry is crucial to the overall success of the Oil and Gas
Industry.

The industry accounts for approximately $80.7 billion in revenue. It is present in nearly every
province and territory. However, the concentration of industry activity can be found in Western
and Atlantic Canada.

Industry Structure

The OGES industry is comprised of two main sectors and further sub-sectors:

• Services Sector includes: Geophysical Prospecting, Contract Drilling, Pumping,

Pipeline Services, Field Processing, Transportation, Engineering, Geomatics, Marketing,
and Other Services
• Manufacturing Sector includes: Drilling Equipment, Drilling Consumables, Pipeline
Equipment, Storage, and Oil Sands Equipment

The industry employs approximately 230 000 people within the two main industry sectors.

The OGES industry is predominately comprised of Small and Medium sized Enterprises
(SMEs). Around 2 300 enterprises operate across the various sub-sectors. These enterprises
are strategically positioned through-out the value chain and generally interact with larger
corporations providing solutions in manufacturing and services. For example, contract drilling.

Exports

In addition to domestic markets, exports are important to many firms. The United States is the
main export destination followed by Russia, the United Kingdom, Australia, the Middle East,
China, Asia, and South America.

Critical talent issues for the oil sands industry

The oil sands are a hotbed of economic activity in Alberta, and the pace
of construction shows no signs of slowing down. But the Human Capital issue extends
beyond the oil sands, as the talent pipeline to support all oil and gas operations is drying up.
Deloitte's Energy & Resources Talent Pulse Survey recently examined HR shortages across
the entire sector. Here's how the impending labour crisis is impacting development in the oil
sands.

Labor issues in the oil patch are unique and extend beyond HR

Oil sands players and their human resource departments are currently facing several
challenges. For one, the Alberta oil sands are predominantly strip mining operations, and with
the current state of commodity prices there is a global shortage of mining personnel. There's
also a significant shortage of materials and equipment needed to support oil sands projects.
Companies tend to source from the same vendors, and this shortage puts a strain on
productivity and impedes progress of the overall project. Additionally, foreign workers could
potentially be trained in the sands, but various barriers prevent them from entering the Canadian
workforce.

On a social level, the explosive growth of Fort McMurray and the surrounding municipality of
Wood Buffalo — the epicentre of oil sands activity — is stretching the area's infrastructure
beyond capacity. Fort McMurray expects to create an additional 20,000 oil sands-specific jobs in
the next three years. Workers can earn healthy salaries, but they can't always secure adequate
housing and services, and they have limited options for spending their disposable income.
Employers are forced to devise creative solutions and compensation methods, such as flying
employees into the sands on a regular basis — rather than transplanting entire families. But
short-term solutions can only go so far.

Companies must put themselves in their employees' shoes

Oil sands companies must look at the entire scope of their labour needs, focus on the critical
workforce segments, then determine what it is that keeps their workers committed. "You have to
remember that attraction and retention strategies are outcome measures," cautions Zorbas.
"Newer employees want challenges; they are seeking meaningful growth and learning
opportunities," says Zorbas. "Increased income is not the solution."

One simple but often neglected strategy is to look at employment from the employee's
perspective. To this end, Deloitte's Human Capital practice uses the Develop-Deploy-
Connect model. Oil sands operations that continually develop opportunities for workers, deploy
them in engaging roles, and connect them to both colleagues and the workplace will ultimately
drive productivity. At the same time, companies must evaluate their productivity limitations and
assess how productivity is aligned with worker expectations.