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3 Things HR Can Learn From Stock Market

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Writtten by: Rajesh Rajak

Increasing shareholder’s equity is the most important aspect of any organization’s strategy. Sustainable and profitable growth is what every CEO strives to achieve. As businesses grow profitable, they generate more cash which contributes to the shareholder’s equity; hence creating the value for the organization.

Stock market is a platform which provides quick reflection of shareholder’s sentiments. One good or bad news can swing the stock prices. Both internal and external environment contribute to the stock prices movement and it’s valuation each day. While organizations already use stock market driven measurements to pay for various achievements to its employees, perhaps there is more which can be learnt from this volatile platform.

Here are three key strategies which our shareholders use and can be explored by HR to improve it’s workforce, talent and compensation management.

1. Don’t speculate, Invest!

A speculator in a stock market is one who often tries to maximize from the quick or short-term movements in the market. They buy stocks as soon as they get a favorable news and sell it as soon as an unfavorable news crosses their eyes. To some, it might look as a good proposition to act according to the market movement. However, in reality, such positioning often reduces their capital by substantial amount. When you try to buy, and sell too often, you definitely lose on en-cashing the true earning potential of the stock. Interestingly, that was the prime purpose of buying the stock at the first place!

It’s not only about losing on the opportunity on profits; speculators also lose on their current capital in the form of various fees and taxes they pay while buying and selling the stocks. If accounted for correctly, a good portion of an investor’s capital goes in paying the brokerage, taxes and other duties leave apart the time invested to identify, value and buying the stock at right price. Whereas a value investor, one who invests for long-term, would never buy or sell a stock based on it’s temporary movement. They would rather invest in a different tool as against buying a stock if they don’t see a long-term gains out of it. Similarly, they would never sell any of their stocks as long as it promises to deliver on its perceived value hence saving both time and money invested earlier.

Many organizations, just like speculators, hire & fire too quickly as well!

Just like buying a stock, organizations do invest a lot of time and money in identifying, selecting and on-boarding the right talent. This entire process consumes many cost items; like cost of resources involved in hiring, channel fees, candidate travel cost, notice pay, joining bonuses etc. If such resources are fired in short-term, it further pushes organizations to pay for any severance cost and other accumulated benefits cost apart from loss of investment on their training and skill improvement during that short-period.

It’s not only the tangible loss, organizations also lose on their brand value. Candidates often refrain from applying for opportunities in such organizations. This further impacts the organization as its vacancies remain open for longer period and hence increase its opportunity cost.

Organizations must evaluate their resource needs in details and hire only when it’s part of their long-term strategy. To manage temporary flux in the business demand, organizations should plan to hire contingent workers instead. If the demand persists, they can be moved to rolls. If not, they do leave as the contract expires. This could help manage the cost efficiently and improve organization’s brand value. On experimental basis, a task-based assignment with fair reward can be rolled within organization to manage the flux. There is high possibility of other employees picking additional task when they are paid fairly for it.

2. The Recession Whirlwind

We all hate recession, don’t we? It all comes surrounded with uncertainty and fear. Lay-offs become the key word of each business meetings. Saving cost by reducing the number of employees, has been one the quick fixes to organizations financials. Many lose their jobs; for some it’s like end of their professional career!

When the recession hits, stock markets react quicker than organizations do. Stocks fall to lower values day-by-day and are sold off at very cheap price. Many stockholders start selling their stocks to minimize their risk exposure. However, this is the time when a value investor becomes hyper-active. While the markets continue to sell, the value investor starts to buy good stocks. Since, the stock prices are already down, a value investor enjoys getting the best of the stocks at almost risk-free rate!

In such times, like stock markets even job market offers many quality candidates ready to be hired at reasonable salary!

This gives the organizations an opportunity to not only improve on the cost of resources but on quality too. A perfect timing to “replace” your high cost and poor performing employees! The workforce strategy should be made flexible enough to accommodate the pool strength of the organization at such time. Employers can lower the risk and cost of these new hires by modifying the employment contracts and having a longer probation for these new hires. They can be made eligible for certain high-cost benefits only post successful completion of their probationary period.

3. Sell when it’s mature

In a stock market, it is equally or rather more important to know when to sell a share. A value investor will always have fair expectation as to how much a share should perform and regularly estimate when it’s price starts to get overvalued. An overvalued share would soon start to fall and continue to fall until its price gets corrected. It is always a wise step to sell a share when it has reached its maturity and book profits!

Like shares, even employees mature in their profile and soon they start becoming overpriced or in other terms falling outside their pay-range as an outlier. Such situations do need correction!

An ideal solution could be to prepare to move such employees up in their career ladder. However, such is not a possibility in many situations as the employee may already have reached that stage or may not have required competency for next level job.

In all such cases, first and foremost, organization must ensure to communicate the employee about the scope of the role and organization’s affordability for such roles. Being transparent will not only help set long-term expectation of the employee, but could also motivate employee to put more efforts on improving its competencies. It is always advised to freeze the base-pay of the employee. This will help control the total compensation cost and maintain the price vs value balance of the resource. Please note, even when the employee continues to perform, increasing its base pay will only create more and solve less of a problem.

Employers should leverage tools like Lump-sum, task-based incentive or retention bonus to ensure the employee continues to perform and feels valued. As soon as market salaries improve and employee is closer to median of the role; start following the regular pay practice. Waiting for employee’s salary to be corrected at market level is the key to manage such resources.

It is always better to take corrective action in-time than retrenching the employee later due to high-cost!

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Wellbeing @ Work Summit Middle East 2021 – where balance, resilience and authenticity break the Mental Health Stigma

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Written by: Cinzia Nitti

Globally, 2020 has been a year like no other. Coronavirus pandemic caused a massive business disruption; transformation has been key in supporting employees and catalyzing workplace changes. There was a rush to adapt and reinvent Business Models. Organizations had to rethink and reconsider how they deliver services and strengthen their Organizations through a forward-thinking Digital strategy. To be more agile and responsive in such uncertain times, we need to respond to challenges and adapt quickly to new scenarios by moving from rigid hierarchies to leaner and more flexible structures.

But what about Mental Health at Work, and why is it essential?

What’s the Office of the Future?

Within the Wellbeing @ Work Summit Middle East 2021, HR Leaders tried to normalize the conversation about Mental Health by putting the topic first, enabling self-care and professional support, raising awareness, and building knowledge around its related issues. Nowadays, personal and work life are more intertwined than ever, so it becomes vital to create balance: the more employees feel free to talk about Mental Health, the more they can prevent struggle and breakout at the Workplace. HR leaders play a crucial role in making an IMPACT by pushing new solutions, promoting work-life balance, redesign workloads, and supporting their Teams.

In this general frame, Irada Aghamaliyeva (MENA Diversity, Inclusiveness & Wellbeing Leader at EY) affirmed: “Workplaces that are inclusive foster enhanced employee wellbeing; employees with high levels of wellbeing are more inclusive”. How can Organizations increase employees’ resilience and embed sustainable Leadership behaviors in the post-covid reality?

Dr. Irada Aghamaliyeva introduced the Mindfulness practice in the Workplace and highlighted its benefits on a large scale: improved wellbeing and resilience on a physical level; positive emotions, self-regulation, empathy and awareness of social dynamics; learning and innovation thanks to the implementation of flexible thinking, intuition and problem-solving processes. So breaking the stigma is possible, starting from personal wellbeing to sustain positive energy and fuel resilience.

About the Power of Empathetic and Authentic Leadership, Dr. Rima Ghose Chowdhury (EVP & Chief Human Resources Officers at Datamatics Global Services) stresses the importance of Leadership roles today. The virtual environment employees are working in, makes them more vulnerable due to a lack of balance between emotional and authenticity traits. Authenticity is the primary factor in effective leadership, regardless of the leadership style. Putting employees first as a strategic priority and hearing their voices to guide strategy; embracing agility to work more effectively in tumultuous time; including a multigenerational work-force: these are the key concepts within Dr. Rima’s motto “Empowering is to enable”. Through motivation and filling emotional support needs, the Empowering Teams Process leads to employees’ safety, esteem, and self-actualization. 

The Wellbeing @ Work Summit delivers strategic direction, advice and inspiration from employers and experts from across the world to help you create a more compassionate corporate culture that delivers results. To know more about the FOW Future of Work Insights platform around the world, click here: https://fowinsights.com/

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The Wellbeing @ Work virtual Summit Middle East returns for its 5th annual event on 22-24 February 2021

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The summit provides an innovative and experiential virtual learning opportunity for our audience of CEOs, benefit and reward business leaders and senior HR professionals. The information and knowledge gained from attending this event allow the opportunity to make strategic wellbeing and mental health decisions within an organization, supporting our mission to create more flourishing and thriving workplaces. Never before has the mental health and wellbeing of your employees been so important. The Wellbeing @ Work Summit includes keynote speeches, panel discussions, workshops, and fireside chats alongside unrivaled networking with leaders across the Middle East using our AI-enabled matchmaking platform. This is far more than a webinar! An engaging 3-day event providing you invaluable insight and tools to create thriving workplaces.

Key Reasons to Attend:

  • An engaging AI-enabled matchmaking platform to make invaluable connections & host virtual meetings up to 2 weeks before the three-day festival
  • Learn how multinational organizations are creating workplaces where employees thrive in the new world
  • Campfire panel discussions informing workplace change & mental health solutions
  • Middle East-based employer case studies providing the secrets to employee wellbeing success
  • International experts bringing best-practice from across the globe
  • Invaluable networking with business leaders from across the Middle East

The Wellbeing @ Work Summit delivers strategic direction, advice and inspiration from employers and experts from across the world to help you create a more compassionate corporate culture that delivers results. The design and implementation of a holistic wellbeing and mental health programme that delivers healthy outcomes and a more productive organization is paramount right now. 

In addition, the results of the extensive Middle East region-wide survey on wellbeing and mental fitness in organizations across the region made in partnership with Cognomie will be presented during the event.

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DECODING FUTURE HR: Global 24 hour virtual event | 19 and 20 January 2021

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DECODING FUTURE HR: Today’s challenges are tomorrow’s trends and opportunities

Global 24 hour virtual event | 19 and 20 January 2021

www.decodinghrevent.com

The world in 2020 has changed to a ‘new normality’ but what’s that ‘new normality’ everybody talks about? Is it here to stay? How is it affecting us in our daily lives in the different versions of ourselves? As a customer, an entrepreneur, a parent, a friend…a worker…

Our job is a key part of our lives and we are indeed living through a fundamental transformation in the way we work. Automation and ‘thinking machines’ are replacing human tasks and jobs, and changing the skills that organisations are looking for in their people. These momentous changes raise huge organisational, talent and other HR challenges. It has become clear that few organisations are likely to revert to pre-pandemic practices even after a vaccine is found.

Decoding Future HR 2021 is bringing you the ideology of how today’s challenges are becoming tomorrow’s trends and opportunities resulting in HR excellence.

Why you should attend:

  • Learn about the trends and best practices shaping future HR
  • Get valuable insights from expert speakers
  • Share ideas and research to help your organisation reach its goals
  • Understand what do employees want in ‘New Normal’
  • Develop new vision for HRBP and Centre of Expertise
  • Identify, integrate and understand stakeholders to create an intentional employee experience
  • Approaches and elements to leadership development.

Some of our confirmed speakers:

  • Tshepo Yvonne Mosadi , Human Resources Director, The HEINEKEN Company
  • Sarah Tabet, Global HR Director/ D&I Leader | Author for “Inclusion Starts with U”, Schneider Electric
  • Wadah Al Turki, Country Talent Manager KSA and Bahrain, IKEA
  • Lesha Chakraborti, Head of HR – EMEA, Travelex
  • Shaban Butt, Director HR & Administration, The Coca-Cola Company
  • Sajjad Parmar, Head of Rewards – APAC, eBay
  • Katey Howard, VP, Talent Management AMESA, Pepsico
  • Chen Fong Tuan, HR & General Affairs Director, Samsung Electronics
  • Prerna Ajmera, Senior Director, HR Experiences and Solutions, Microsoft
  • Václav Koranda, Vice President Human Resources / Member of the Board of Directors, T-System
  • Amy MacGregor, VP Employee Experience, Global HR, Manulife
  • Adwait Kashalkar, People Analytics and Programme Management Leader, APAC, Mastercard

Click here to view all speakers: www.decodinghrevent.com/speakers

At Wisdom we remain positive that ‘normality’ will soon return and that we will be able to physically meet together once again as speakers, delegates and sponsors at our beautiful venues around the world. But meanwhile, life continues and we need to keep in touch and learn from each other. This 24-hour virtual event will be of great benefit and value to your businesses and its continued development during these challenging times. While this virtual event comes at a lesser cost, it provides for now a wider reach into an international audience, with flexibility of access to content as well as allowing you to have the same opportunity as at a face-to-face session for one-to-one business meetings. We look forward to welcoming you in January.

Date and time: 19-20 January 2021Where: Virtual engaging platform
  Further information and bookings: www.decodinghrevent.com        Contact:
marketing@wisdom.events   #WSDM_BI
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