HUMAN RESOURCE DEVELOPMENT

The impact of reduced expenditure on Human Resource Development interventions (UK)



The impact of reduced expenditure on Human Resource Development interventions (UK)

Introduction

Whether the company is receiving the impact of globalization, is subjected to low profitability or losses on the final show of their box scores, is losing market share due to high costs, observing lack of maneuverability, and desired make war on the market, or seeing a lack of liquidity, it is subject to reduce costs (Storey, 26). A cost reduction strategy in HR development is usually applied without projection, lacking method and a system that often does not produce the expected results in the short term, and never accomplishes goals for medium or long term. The current profits are eaten the future of the company to reduce the level of responsiveness and competitiveness of a staff that is not adapted to market needs and advancing technology. Running a company with the reduction concept or have staff with little or no versatility prevents any ability to compete becomes critical for the development of the organizations and the economy. The paper discusses the impact of reduction in expenditure on human resource development it addresses the impact in three areas namely employees, organization, and the competitiveness of UK.

Reduction in Expenditure and Human Resource Development

There are two fundamental questions that many managers and even consultants do not understand: "The aim is not to reduce total costs, but costs per unit of income." The question should focus on improving productivity so an increase in total costs may bring higher income the second issue is that "it is not actually reduce costs, but rather to eliminate their causes". Clearly be recognized if those situations in which the company due to lack of liquidity forced to curtail expenses, even in this situation better use of resources in such a way to generate more income than expenses will overcome the lack of liquidity (Geisler, 239) . This does not mean one should not analyze the relationship between income and expenditure over time, which would lead not only to the need to restrict methodically and systematically outflows so as to avoid damaging the company's solvency, but also modify financial policies and sales (such as prices, discounts for prompt payment, delay payment to suppliers, customer payment schedules, etc.) (Geisler, 240). In these cases the cost reduction occurs within a process of financial rehabilitation of the company, which represents only one component in the recovery strategy, and beside this financial rehabilitation comes the changes in human resource planning like downsizing, withdrawal of training programs, reconsidering the hiring decision, and restructuring of the pay system (Talbot, 30). Like every other country, the organizations are also implementing the cost reduction strategies and reducing the expenditures to cope with the economic crisis. However, it is important to realize that these expenditure reduction methods in human resource development are profitable in the short run, but there are major implications in the strategic structure of the organizations that may ...