In today's world, the change in qualifications intermingles with the change of generations. Companies have a problem grooming successors; advance planning to cover future needs has been neglected. An employee is simultaneously a production factor and a cost center. This marks the dividing line in the discussion about corporate strategy and personnel strategy during weak market phases. Costs must be cut in times of crisis, but the consequence is that performance is also impaired.

The question: cyclical or anti-cyclical action? In any case, the courage to establish a long-term and sustainable human resources policy is called for in times of crisis.

Personnel strategy follows corporate strategy

During the phases of keen competition at the end of the previous millennium, personnel had to be hired and retained. This situation had effects on the structuring of pay scales. Companies found they had to raise salaries by one to three pay scale classifications if they hoped to find adequately qualified personnel. The result was an increase in personnel expenses averaging 15% to 20%. In some areas, promotions in the past were not related to performance, but were instead a question of seniority or personal circumstances, leading to personnel structures which were less than ideal. This was one of the reasons why cross-industry comparisons determined efficiency potential of 30%, in some cases as much as 50% or even more. Rectifying this situation in the middle term using conventional means while maintaining strategic competitiveness demands all the skill management can muster.

“Personnel strategy follows corporate strategy.” While this sentence is fundamentally correct, it must be considered in greater depth than is usually the case. Of course personnel strategy must be derived from the corporate strategy, but it is subject to constraints which differ from those of other production factors in a number of dimensions.