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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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How did the International Certification from the HRCI change your career?

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Testimonials from Certified HR Professionals in the Middle East

Journalism: Menna Hamdy

Mostafa Gallal (PHRi, Egypt) – Recruitment Manager at Al Ezz Dekheila Steel

“The most important thing about the certification content is that it helps us to understand the HR science from a global perspective. In addition, to updating us about the new HR trends.

Most of us don’t practice at work all the HR functions, so it allows me to learn about all the HR functions.

Being certified gave me the opportunity to take a role in many projects, as well as participating in many events that added a real value for me.

My mindset started to think about top management decisions and how I can solve the regular issues that happens between top management and unions. I learnt that when proposing any new idea, I should take into consideration how to apply it in a way that fits my company culture

I would advise HR professionals when approaching their HRCI Certifications content study; to try to understand the practical way of each module, and to get acquainted with the HR Expressions and abbreviations as they are very important; they have to study them very well.”

Ezzddin Malek (SPHRi – PHRi, Egypt) – HR Manager at Misr Capital S.A.E

“I acquired my PHRi and SPHRi certifications in 2017 and it gave me an edge to make 2 steps up in my career from senior HR specialist in 2017 to Head of HR in a multinational company within just 2 years and I was chosen by HRCI to be an exam development panelist since 2018.”

Mina Adel (PHRi, Egypt) – HR Manager at IRAM JEWELRY

“Knowing the latest internationally applied methods of human resource management and being a certified practitioner from the premier human resources certification institute (HRCI) made me qualified to undertake larger tasks and assume advanced responsibilities in the field of human resources”

Mohannad Albashabsheh (SPHRi- PHRi, Jordan) – HR & Training Section Head in JBC

“Practicing HR Professionally is an outstanding responsibility. Being SPHRi certified facilitated for me the knowledge, skills, attitude and resulting power to be successful HR Professional”

Dana Hasan (PHRi, Jordan) – TA, LD Section Head

“I have got my first HRCI certification in 2014, then I got my recertification in 2017 as PHRi. Getting such certification helped me to grow in my HR career, stand as a distinguished HR professional in international and multinational companies. 

One of the main reasons that enabled me to work for big companies and be a business partner is having a professional certification.

I advise each professional: Invest in yourself, strengthen your experience with knowledge”

Mariham Magdy (PHRi, Egypt) – HR, Strategy and Management Consultant & Trainer

“As an HR Trainer & Consultant I believe that one of the most important benefits of the International Certification by the HRCI is how efficiently it builds the mind-set of the HR professionals acquainting them with the technical know-how for HR, spoken and standardized in an international language.

The HRCI exerts sound efforts to provide learners with valuable framework that can help them understand technically correct the processes of the different HR functions.

The HRCI Certification enabled me to understand the HR science from an international perspective, which gave me confidence in my work as an HR practitioner and Trainer.

The knowledge learnt throughout the certifications content designs for us a reliable road-map for the right steps to follow for decision making in HR.

I strongly recommend the certification for each professional aiming to progress his/her career in the HR field. Take a step today that you will thank yourself for it tomorrow”

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Magazine

Interview with Eureka (ICS Learn Student) Customer Service Agent – Qatar Airways

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Interviewer: Mariham Magdy

1. HR Revolution Middle East: Welcome to HR Revolution Middle East Magazine. It’s a great pleasure to have the opportunity to make this interview with you.

What special recommendations would you share with CIPD students to encourage them to progress in their study?

ICS Learn Student:

Going through a period of change is very challenging and emotionally draining with the end outcome almost always unforeseeable. Everything seems to be unpredictable, but that is okay! Take some time to adapt to this new situation, accept it as positive reinforcement to yourself. Add value to yourself. Break through the situations in life. Continuing to learn will bring you academic and professional value to be the person whom you always want to be.

2- HR Revolution Middle East: How did the online set-up provided by ICS learn supported you to finish your CIPD Certification?

ICS Learn Student:

As a CIPD student, I am very glad that I choose ICS Learn as my platform. The online set-ups are very easy to go through and convenient to manage time. Especially as I am a full-time worker, it is very challenging to manage time for study or attend classes. However, ICS Learn supports you with recorded classes and fast responsive tutor support. That connection always made me feel that I was in a live classroom.

3- HR Revolution Middle East:  To what extent do you believe that the CIPD has helped you to progress on your professional path and opened new doors for different career opportunities?

ICS Learn Student:

CIPD is an internationally recognised professional body. Most employer’s value and recognize the professional certification of CIPD. Being a CIPD Member gives professional values to my CV, especially in the field of Human Resources Management.

4- HR Revolution Middle East: How did your HR practice at your organization changed after acquiring the CIPD certification?

ICS Learn Student:

My organization recognized me as an HR student as I am successfully achieving my professional qualifications with CIPD. I feel more confident as they look at me as someone whom they can rely on professionally at any given task.

5- HR Revolution Middle East: What special support have you received from your Tutors at ICS Learn that evidently helped you to finalize your certification?

ICS Learn Student:

During my study period, the support that I received from all ICS Learn tutors is special. Personalized feedback with regards to any assessments helped to achieve pass grades. I highly appreciate that all my tutors are available to answer or clarify any inquires related to my assignments or theoretical doubts in the one-to-one online chat forum.

6- HR Revolution Middle East: The online administrative support is one of the most important things an online global learner need, how was it flexible to proceed with such important certification through the online platform of ICS Learn?

ICS Learn Student:

ICS Learn is one of the best and most recommended online learning providers. The online admin support is a click away as we all are connected in different time zones in the world. That is very important as an online global learner. They do not only support academically but also technically. As a path connecter to the CIPD body, ICS Learn have a very professional admin team.

7- HR Revolution Middle East: How did your problem-solving techniques changed in dealing with HR challenges after finalizing your CIPD certification?

ICS Learn Student:

As an HR student, a CIPD qualification will enrich you with academic techniques. I have improved lots of skills that are helping me to handle challenges in a patient and professional manner. All the studies are practical scenarios rather than theoretical ones which allows me to improve as an individual and improve my behaviours as a people person.

8- HR Revolution Middle East: What would be your next academic degree in mind after the CIPD?

ICS Learn Student:

I would like to do a master’s degree in Human Resources Management.

9- HR Revolution Middle East: Do you believe HR/L&D professionals shall create communities of practice to encourage one another in finalizing their CIPD certifications and nurture the profession that way?

ICS Learn Student:

Yes, I do believe so. Being connected to a community that is driven by the same goals and targets is encouraging. It also helps to build confidence and practice some of the professional behaviours by supporting each other. Sharing each other’s knowledge and giving feedback and different viewpoints always achieves a better outcome.

10- HR Revolution Middle East: What are the needed competences for an HR professional to excel in his/her CIPD studies?

ICS Learn Student:

The field of HR is dynamic and our ability to process and understand it requires self-motivation. Growing in your job means being receptive to new ideas, wherever they may come from. HR professionals who never stop learning are well-positioned to translate well thought out industry trends and data into actionable insights. CIPD is the perfect gateway to our dream career. They support choosing the right course to up-skill your HR practice and stay motivated remotely.

THANK YOU

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Articles

تعاون بين شباب السودان ومصر لتنظيم النسخة الثامنة لتيدكس ودمدني بالسودان

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شباب من مصر والسودان يترجموا التعاون بين البلدين الشقيقين في المشاركة في تنظيم النسخة الثامنة لمؤتمر تيدكس ودمدني بالسودان.

يعتبر شهر مارس بكل عام بمدينة ودمدني السودانية شهر مختلف ومتميز وذلك لأنه على مدى 7 أعوام متتالية يشهد على تنظيم حدث لمؤتمر تيدكس العالمي، وجاءت النسخة الثامنة التي كانت بيوم 27 مارس 2021 نسخة متميزة ومنفردة بجمال أفكارها ومشاريعها وتنظيمها الذي تم الأشراف عليه من البلدين الشقيقين، وكانت المشاركات شاملة لكل المجالات التي تهدف لتنمية المجتمع والفرد ونذكر منها:

ياسمين يوسف (جمهورية السودان) تحدثت عن تحديها للإعاقة ووقوفها ضد المجتمع ودفاعها عن حقوقها في التعليم وكيف استطاعت أن تتجاوز كل تلك الصعاب بإرادة قوية حتى تم تسميتها باسم صاحبة الإرادة وتعتبر ياسمين الآن من الشخصيات الملهمة في السودان.

تحدث محمود منسي (جمهورية مصر العربية) على أعادة بناء الدول والمجتمعات بعد الثورات وجاء الموضوع مناسباً للمرحلة التي يمر بها السودان الشقيق وأستطاع محمود إلهام الشباب السوداني لأخذ دور في بناء البلد وذلك بتفاعلهم مع موضوعه.

تحدث كذلك أحمد رجب (جمهورية مصر العربية) على فكرة رقصة التانجو وعلاقتها بالإدارة والقيادة داخل المؤسسات.

وكذلك سها هيكل (جمهورية مصر العربية) وجهت رسالة توعوية للمجتمع لتغير نظرته تجاه الفنيين باعتبارهم شريحة مهمة في المجتمع، وأن محاربة العنصرية والتمييز في شتى مجالات العمل.

بينما وعد عصام (جمهورية مصر العربية) تحدثت عن الصعوبات التي تواجه طلاب الثانويات خصوصاً في تعلم اللغة الإنجليزية وكيفية التغلب عليها بنصائح سهلة بسيطة ومباشرة ووضحت وعد أن اللغة عبارة عن مهارات تكتسب وتمارس.

ياسمين يوسف (جمهورية السودان) تحدثت عن تحديها للإعاقة ووقوفها ضد المجتمع ودفاعها عن حقوقها في التعليم

ومن المشاركين كذلك من البراء عثمان (دولة الأمارات العربية المتحدة) الذي تحدث عن تجربته مع الاكتئاب وكيف استطاع تجاوزه بتوجيه طاقته تجاه ممارسة هوايته وهي الموسيقى وكيف أن ممارسة الموسيقى تساعد على التوازن النفسي.

فاطمة أحمد (جمهورية السودان) التي دعت للمحبة والسلام وتقبل الاّخر لبناء سودان جديد مستعرضة تجربة رواندا.

وكذلك تحدثت ماب خالد (جمهورية السودان) على أهمية التوعية بالعلاج النفسي وتجربتها في إقناع الحكومة لتضمين العلاج النفسي في التأمين الصحي وتوعية المواطنين بالصحة النفسية.

وعن السياحة تحدث بشغف محمد مجذوب (جمهورية السودان) وعن تاريخ السودان الذي يمتد ل 7000 سنة وعن حضارة الفراعنة داعياً الحكومة للترويج للسياحة في السودان معتبرا مؤتمر تيدكس مدني مؤتمراً يساهم في دفع عجلة السياحة بالبلاد وذلك للمشاركة الكبيرة من المتحدثين والجمهور من المناطق المختلفة.

وتحدثت أصغر المشتركات أسيل يوسف (جمهورية السودان) عن إمكانية استغلال الموهبة لمصدر دخل وتنميتها بالممارسة داعية شباب جيلها لحذو طريقها وختمت خنساء سيربال (جمهورية السودان) المؤتمر بحديثها على دور الممرض في المنظومة الطبية.

بالإضافة إلى الإعلامي إيهاب مجدي من مصر معد ومقدم فقرات برنامج المؤتمر، بالمشاركة مع الإعلاميين السودانيين خالد علي وآية عابدين.

وبختام المؤتمر قدم محمود منسي درع الأكاديمية العربية للعلوم والتكنولوجيا والنقل البحري للمنظم د. وائل العائد الذي شكر بدوره الأكاديمية العربية على دورها الكبير في إنجاح المؤتمر باعتبارها الشريك الأساسي وشكرها للمنحة التي تم تقديمها للمؤتمر وقام كذلك بتوجيه الشكر لكل الجهات التي ساهمت في إنجاح المؤتمر:

السيدة مونيكا وحيد، ممثل شركة تاركو للطيران مكتب مدني

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