Impact of the Global Financial Crisis on HUman Resource Management in Mining Industries

Pages: 10 (3167 words) Published: March 31, 2013
Human Resource Strategies 660
Monday, Trimester 1 2011, 18th April

Assignment 3
HR Case Analysis at Workplace

Word Count:2500
I. Introduction
The Global Financial Crisis (GFC) in 2008 affected lots of industries including the miners. Employment in mining is particularly vulnerable to a cycle of rapid expansion and contraction, as changing economic circumstances cause demand and prices for certain commodities to rise or fall. Eventually the GFC resulted in lots of labour cutbacks in the resource industry (Australian Government, 2009). The key human resources (HR) challenges facing the West Australian mining industry for the next few years are considered to be: replacing retirees; the retention of key talent; growing the talent pool training and development; and keeping staff motivated (Dickie and Dwyer, 2010). On the other hand the WA Chamber of Minerals & Energy (CME, 2006) identified a number of HR strategic issues for the WA resource sector like; skills shortage, employee attraction and retention, flexible workplace practices, indigenous employment opportunities and community-regional services. The company I work for decided to go through downsizing in order to reduce the operating costs during GFC. This article aims to delineate several HR issues as a result of global downsizing process in the organisation. The main focus will be sudden redundancies, decrease in motivation, labour shortage, health and safety issues and recruitment of new employees. Since several HR issues are interrelated to each other, with the purpose of this article, the main focus will be mainly on downsizing policy and its short and long term effects in the organisation.

II. The Downsizing Policy and Its Effects
Organizational downsizing is a prevalent strategy designed to improve organizational performance while selectively decreasing costs. It refers to “an organizational decision to reduce the workforce in order to improve organizational performance” (Kozlowski et al., 1993). Therefore stemming from the desire to become more efficient and effective, firms in both the private and the public sectors has adopted downsizing strategies (Cameron, 1987). Furthermore, the increasingly dynamic and competitive workplace and the trend toward globalization have prompted many firms to downsize (Appelbaum et. al, 1999). The GFC created considerable uncertainty, in the mining industry. In addition to the recruitment and retention issues, organisations were faced with trying to keep staff motivated at a time when more job losses were predicted and budgets became getting tighter (Dickie and Dwyer,2010). My current employer decided to go through global downsizing as a response to GFC. Fifty percent of the employees were made redundant and number of the projects was tremendously decreased due to the limited budget. The HR department played an active role in that period to manage the downsizing process. One of the strengths during this process was keeping good communication between HR and the upper level managers. The process was completed with collaborative work between HR and management. The professional assist received from consultants involved improvement the employees’ self awareness levels, increase their motivation and confidence as well as creating effective CVs. However during downsizing process several HR related issues started to rise in the company. The employees who remained in the company lost their trust and motivation. Besides due to loss of skilled labour the productivity decreased and the incident numbers dramatically increased. The turn-over rates were high and the team dynamics were damaged. Eventually the sudden decision given by upper managerial level due to economical downturn resulted serious HR issues in the company. The downsizing process and its long and short term influences for this case study is summarised in Figure 1 below.

Global Financial Crisis

HR Issues


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