Services

Human Resources in the Focus of Company Development

The decision about which functions are located centrally in the (regional) headquarters, and which are positioned in the individual countries, is impending in numerous companies. After years of rapid growth in Central, Eastern, and Southeastern Europe, issues like restructuring and consolidation are the order of the day – companies must adapt structures and processes to their quality requirements, and consider the very inhomogeneous market situations in CEE/SEE at the same time.

The relevance of HR tasks in the headquarters varies strongly, as also in other services. In general, the trend leans towards slim structures in the headquarters, and an increasing number of responsibilities outsourced to the branch offices. However, hardly any company headquarters entirely hands over the HR responsibility.

Basic decisions

The adequate level of centralization is dependent on numerous company-specific factors, and beyond that is a dynamic element, which should keep pace with company development. This decision is influenced by several factors, among others by

• Company strategy
• Quality requirements
• Relevance of knowledge workers and specialists
• Customer structure
• Distribution in the region
• Existing, grown structures
• Local economic conditions
• Market position of the company (growth, but also brand name image, etc.)
• Cultural factors

Certain decisions must be made in the headquarters in any case. Like the total strategy of the company, the derived strategic personnel planning, for example, should take place centrally. This allows the derivation of a company competence model and the budget for new recruiting and personnel developments. It also uncovers which personnel resources will be important in the future, or which may become scarce.

Strategy and values

The value set of a company should not only be mirrored in the competence model, but be lived throughout the entire company, if possible. Especially in post-merger situations it is a central task to regulate the handling of the different company cultures. It should be clearly defined which positions are filled by the headquarters in order to ensure the high quality of the strategy-based personnel decisions and the value structure (therefore the performance) also in the branch offices. It is beneficial to define by which categories high potentials are to be identified within the existing teams, and can be recruited as future key-players. Which processes and selection criteria should be given for structured personnel selection? Which recruiting decisions remain in local responsibility, also with the target of quality improvement respectively under the aspect of profitability?

After the highly qualified employees are on board, the key issue is to bind them to the company in the long run, and to show them perspectives. A main question to be answered centrally is: Shall there be uniform career paths, which also work beyond borders? Does a uniform remuneration system make sense – and for what »price« can it be realized? Which personnel development measures are offered centrally (all those that have to do with company specific know-how respectively involve the company values and strategy), and which are organized locally?

Employee retention

In labour markets in which employees let themselves be enticed away for a few more Euros, climatic factors and employee retention receive increasing importance. A good image as employer can be influenced by some key factors, and therefore also be promoted in the branch offices. The basic appreciative behaviour towards employees, as well as the distinct consciousness towards intercultural issues is especially critical. Lived diversity and active usage of the cultural variety could very well be advantageous for the companies as an ambitious goal. Here again, the course can only be set centrally.

During the next years, the developments already beginning to show will intensify: We expect the increased formation of competence centres in the individual countries, and – in the course of the maturity of today's structures – an increasingly equal exchange of know-how and human resources between headquarters and branch offices. Companies that begin to prepare for this event now are able to use the potentials in this development to their advantage, and will adapt the apparent controversy between centralizing and decentralizing to the new conditions in a timely manner.

About the person
Elisabeth Leyser is Managing Partner of HILL International. She is active in the company since 1999, and is responsible for the business areas  Finance, Sales, Marketing, and Corporate Communications. Moreover she manages international and large scale projects for key accounts.