Topic: Impact of financial crisis on Human resource management

Order Description Can you please just add some words according to the following : hypotheses still need to be identified at the end of each section in the literature review. Around 50 words in each part of the literature - like titles. Introduction A major problem that affects our lives the last years is the financial crisis. Financial crisis had started from the end of 2007 and it is continuing until now. This financial crisis was the worst financial crisis after the ''Great Depression'' financial crisis which occurred in 1930s (Heather Stewart, 2008). The first signs of the financial crisis appeared in the United States with the main target the banks (Larry Elliott, 2011). In a very short time the financial crisis spread to all the developed countries and as a result it caused various problems (Bruno Gurtner, 2010). The financial crisis affects many parts of the business world and its employees so does with Human Resources and especially with the recruitment part. A country that also affected from the financial crisis was Cyprus. These last years our lives have changed and the way to find a job became more difficult and competitive (United Nations, 2011).All over the world many organisations had destroyed by the financial crisis and now the Hr practitioners are trying to do their best to find the right employees for the right role in each organisation (Groysberg et al.2009).Many companies have tried to be adapted to the new situation during the financial crisis. To achieve this, organisations had new criteria in relation to who they must hire in a job so as to be able to continue their business journey despite the many difficulties during the financial crisis. For example, the most of the jobs are require work experience and this make it difficult for someone who want to get a job for the first time (Gennady Stolyarov II, 2010). The financial crisis has made the organisations to freeze the recruitment process and by this many people are in desperation (John Sullivan, 2008). As the competition is very high after the financial crisis, the Hr practitioners must act very carefully in the recruitment process for a company so as they will achieve their best results for the company. In turn, the financial crisis has made the most Hr practitioners and employees find themselves facing stricter regulation (Groysberg et al.2009). The subject of this paper is: Impact of financial crisis on HRM. This research has as a purpose to analyse how the financial crisis affected the HRM practices, especially the recruitment process and the working conditions in Cyprus. Also a part of this research will be about how the HR practitioner’s behaviour is in the financial crisis in relation to recruitment. In this paper I will use the quantitative research method. Specially, I will use a questionnaire where I will ask different organisations in Cyprus to answer it. From this questionnaire I will make a clear image about the impact of financial crisis on HRM and recruitment. Aims and Objectives The purpose of this research is to examine the impact of financial crisis on HRM in Cyprus. One main objective of the research is to examine the impact of financial crisis on recruitment and working conditions in Cyprus. I will analyse the impact of financial crisis on Cypriot work environment and focus on analysis of the influence of the crisis on HR. The second objective is the examination of the role of the HR practices during the financial crisis (Melo & Machado, 2013). Finally, I will examine how the HR responded to the financial crisis in relation to the 'hard' and 'soft' HR. I will also manage to understand in what extent the HR managers have faced the financial crisis and its challenges with succession by communicating and working together with the employees. The literature review will analyse the impact of financial crisis on Cyprus to present a clear image of the situation. I will also examine and analyse past studies in relation to the importance of the HR practices and especially the recruitment. Additionally, I will examine the financial crisis in relation to employee management. The study will also analyse the role of HRM in relation to recruitment during the financial crisis. Finally, the study will state the strategic, 'hard' and 'soft' HRM. The topics will help us understand the above issues and objectives (Reichel & Lazarova, 2013). This will lead us to the findings of the research. Five Cypriot companies have been chosen to assist understand the topic by providing the answers of their HR managers in a survey. Thus, I will be able to analyse my research question from the questionnaire which is: How the financial crisis affected HRM. Literature Review Financial crisis affect HRM in a high degree. The recruitment and selection process have changed and the organisations to deal with the crisis have freeze or cut payments (Elisabeth, 2011). Also, the financial crisis have depressed trade union's influence and power in the organisations and this have impact negatively the organisation's and employee's relations (Elisabeth, 2011). According to Elizabeth (2011), the HR functions have a main role during the financial crisis as Hr managers have to deal with the severe changes in the organisations such as recruitment, downsizing, reductions in working time, lay-offs, changes in working environment, etc. It is very important for the organisations to understand the impact of financial crisis on HRM as it is may affect the work environment, employee's productivity and general the organisation's performance (Vösa, 2010). In addition, the topic areas that I will include in the literature review and discussed are: • The impact of financial crisis on Cyprus • STRATEGIC,’HARD’ and ‘SOFT’ HRM • The importance of recruitment and selection • The Financial Crisis in relation to employee management • The Role of HRM the Financial Crisis THE IMPACT OF FINANCIAL CRISIS ON CYPRUS Before I will move on with the research process is good to analyse the Cyprus situation during the financial crisis. I will talk about the impact of financial crisis on Cyprus as I will collect the relevant data from Cypriot organisations that I will mention later on. Undoubtedly, the financial crisis sweeps across the world in the last years and it has been described as the worst crisis after the crash of 1929 (Worstall, 2014). From this economic crisis many countries are affected, some more or less (Shah, 2013). Cyprus was one of the countries that affected from the financial crisis. As Cyprus has an open economy worldwide and its economy depends on external demand it was difficult to be an exception of the financial crisis (Ruhaak, 2010). The first effects of the financial crisis was that the UK tourism of Cyprus and the demand from the UK people for houses in Cyprus were decreased rapidly. According to the Statistical Service of the Republic of Cyprus (2015), the arrivals of tourists reached 50.658 in January 2008 and 41.799 in January 2015. Another main impact of the financial crisis in Cyprus is the unemployment (Apostolides, 2015). In the early ages the unemployment of Cyprus was around 4% but now according to the Eurostat (2015) the unemployment rate is up to 16%. Moreover, the financial crisis and the economic problems have created a pressure in relation to the government functions, for example education and health as it is very difficult for the most people to afford all these private sector functions. These problems are because of the memorandum limits in relation to the expenditure. According to the Health Minister Philippos Patsalis (2015), there is an overload in the public hospital as they are receiving more work than they can accept because of the problems with the beds, supplies, equipment, employees and as a result there is a waiting list. STRATEGIC,’HARD’ and ‘SOFT’ HRM Strategic, ‘hard' and 'soft' HRM is an important part of my study. In the 21st century we live in a period of economic crisis and to face it we have to think and work more strategically. For an organisation, to have a strategic human resources management (SHRM) is something necessary so as to develop its objectives (Wright and Mc Mahan, 1998).The 'hard' and 'soft' HRM is a way to understand how the organisations responded to the financial crisis in relation to their HR practices and which way the organisations followed in HRM so as to adapt the new challenges. According to Wilson (2005), the 'hard' version of HRM is about the relation between the HRM and business strategy which is mostly called strategic HRM. On the other hand, the 'soft' hrm is about the human relations and the utilization of each person's talent (Truss et al., 1997). The role of HRM during the financial period is really crucial as it has to follow a strategic so as to help our economy and organisations to survive in the recession (Elisabeth, 2011).The Strategic management of companies has improved during the financial crisis as many organisational functions (HR) are more concerned with their main role in the strategic management process (SMP) (Armstrong and Michael, 2006). Strategic management can be described as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable organization to achieve its objectives (David, 2007). The main objective of the strategic management is to develop new and various prospects for the future (Richardson, 2004). According to Asyali and Zorba (2010), the organisations followed the strategic HRM and recruitment from the early ages and it is still a way for the organisations to survive during uncertain financial situations. Strategic recruitment is situated at the nexus of four main topics (Phillips and Gully, 2015). These topics are: resource-based theory (RBT; Barney & Wright, 1998), strategic human resource management (SHRM; B. E. Becker & Huselid, 2006), human capital (HC; Ployhart et al., 2014), and levels of analysis (Mathieu & Chen, 2011). Human capital is about the particular abilities drawn from HR (Barney & Wright, 1998). HC resources that produce competitive advantage arise from complicated interactions and patterns of personal resources such as knowledge and abilities (Ployhart et al., 2014). As resource-based theory supports, the above resources are a part of the sustainable competitive advantage because the techniques that support HC are useful, unusual, not easily replicated and non-sustainable (Barney & Wright, 1998; Ployhart et al., 2014). Moreover, the SHRM viewpoint is that high-performance work practices and related HRM systems produce maintainable forms of competitive advantage (Huselid & Becker, 2011). As it mentioned above in the SHRM part the recruitment strategies must be arranged across levels so as to perform the recruiting strategy. From the above information and different thoughts we can summarise that the strategic recruitment plays a major for an organisation's success. THE IMPORTANCE OF RECRUITMENT AND SELECTION During the crisis the organisations have changed the criteria to recruit and select people as they want to find employees with high skills and abilities (Vösa, 2010). According to Vösa (2010), after the financial crisis we had a business 'war' as each company tried to compete with other companies so as to offer more benefits for the employees. As the recruitment of employees is regarded to be one the most main part of human resource management to succeed, the Hr practitioners have to be very careful to select the right people with the right skills in a significant role in an organisation (French and Rumbles, 2010). The right recruitments make the organisation to be stable in its value. The main role for the Hr members is to lead an organisation to the right way for the success (Sullivan, 2011). Nowadays, the recruitment stage makes many good employees to have competition between them and have many challenges. An organisation to succeed needs diversity inside its employees so as to achieve its goals from this advantage. As Max de Pree (2013) said: ''We need to give each other the space to grow, to be ourselves, to exercise our diversity. We need to give each other space so that we may both give and receive such beautiful things as ideas, openness, dignity, joy, healing, and inclusion.'' THE FINANCIAL CRISIS IN RELATION TO EMPLOYEE MANAGEMENT So as in the recruitment and selection the HR managers have a main responsibility for the employee’s engagement. According to MacLeod Review (2009), employment engagement is a main part of the HRM literature. Usually, most of the organisations which have values and its employees are working in a trustful work environment can meet easier the competitive challenges such as better productivity, better employee's and organisation's performance, etc. (Vance, 2006). The financial crisis has caused a number of changes in various fields. According to McDonnell and Burgess (2013), the effect of the past major financial downturns has generally intended for companies which looking for major cost reductions. Also, financial crisis has typically affected the labour with a major focus on cost reduction as well as the labour costs (Pascale, 2013). However, this situation can be variable from pay readjustment, decreased development and training, decreased recruitment, increasing working time versatility and numerical versatility to large-scale redundancies. The form and extent of adjustment of an organisation in relation to the financial crisis will depend on labour market circumstances and on product or service. Another factor that will affect the organisation's adjustment during the financial crisis is the professional's discretion and institutional processes so as to manage the various changes such as redundancies. Blandy and Richardson (1984) supported that the employment connection for the organisations and workers is something permanent. In relation to this view there are institutional restrictions such as collective contracts and other factors such as labour turnover costs which supporting that adjustments will be irregular and nuanced (Blandy and Richardson, 1984). Finally, if an organisation want to succeed must have people with personal characteristics such as creativity and flexibility to produce and perform their best so as to develop a financial benefit. The Role of HRM during the Financial Crisis Moreover, the last topic will be the role of HRM in relation to the recruitment during the financial crisis. The role of HRM become more crucial during the crisis as the HR managers have to help the organisation and its employees to get used to the new changes (Premeaux and Beaux, 2007).HR managers play a main role in the organisation as they have to deal with issues in relation to employee relations, HR policies, HR fuctions, training, recruitment, work environment, etc. (Laura, 2012). As a result the organisations should take into consideration the HR's functions and importance.HR practitioners are responsible to examine the situation of the financial crisis and adapt the new changes effectively (Reilly and Williams, 2012). Human resource management must make sure that all the employees of the organisation are working hard and productive so as to produce the most economic and efficient results. HR's managers should manage their employees with the best way so as to reduce the expenses of the organisation. The main goal for HRM is to do their best to reduce the cost and increase the production. (Kasi, 2010) The employee’s recruitment process is an unusual idea during the financial crisis as the organisations are trying to reduce or freeze this process (Groysberg et al.2009). In some situations the recruitment process must not stopped or reduced because it may produce disadvantages to the organisation. This scenario may be a challenge for HR managers. The recruitment process is very costly affair for the HRM (Maroun, 2014). During the financial crisis the goals for HR managers is to reduce the costs (Mitsakis, 2014). In this situation HR managers must find new and cheaper ways to recruit new people so as to reduce the costs and not to fire people. To achieve this the HR managers can find employees who can work by themselves without the help of their superiors. It is very important for an organisation to have the right people to work so as to face the new changes and challenges of their competitors (Reeves and Deimer, 2011).