Barclays Human Resources Strategy Analysis

Barclays Human Resources Strategy Analysis

Human resources represent the most valuable resource a company can exploit in its activity. Other resources, like financial, technical, or informational ones, are useless unless properly managed by qualified personnel. Barclays makes no exception from this situation. Even more, since Barclays' activity is not based on the production of goods where technical resources are prevalent, but on providing financial services for individuals and businesses, it is imperative that the company's staff is highly educated, thoroughly trained, and constantly monitored in order to provide the highest quality financial services. Barclays' staff recruitment, training, and motivation strategy In Barclays' case, before and during the personnel recruitment process the company aims at responding to the following issues: identifying the qualities and aptitudes and selecting the candidates that best correspond with the requirements of new or vacant positions; identifying and attracting competitive candidates using the most adequate methods, sources, or environments for staff recruitment; respecting legislation in the field and attempting to diminish and to eliminate any kind of discrimination. Some of the difficulties encountered by Barclays' HR professionals consists in identifying the real necessity for hiring someone to occupy a certain position within the company, in determining whether the vacant positions are really necessary or they are just designed to fill in some spaces in the organizational chart, and in determining whether the recruitment necessity is somewhat exaggerated. Barclays' recruitment activity comprises all the basic steps identified by David J. Cherrington as being imperative for the success of the recruitment activity (Cherrington, 1991). These steps are represented by: human resources planning, recruitment, and selection. In addition to this, the company's human resources recruitment process also includes the analysis and projection of positions required in the company, staff orientation once the candidates have been selected in the case of external recruitment. In the case of internal recruitment the process includes activities like transfer, promotion, qualifying existing personnel for other positions, restructuring, and development. This recruitment process projection is in full agreement with theoretical findings displayed by L. A. Klatt and R. G. Murdick in Human Resource Management (Klatt, Murdick & Schuster, 1985). Barclays' long history and impressive performance throughout decades on the financial market is also based on the fact that the company has focused its activities and processes on long term strategies that worked no matter how the times changed. The company's human resources recruitment strategy has changed very little over the decades. Barclays found a simple, yet successful strategy for recruiting, retaining, and motivating its employees. For example, from the beginning Barclays recruited very young candidates, most of them being still students or fresh graduates. Initially, Barclays recruited many of its employees at the age of 16, when they were still in school. Afterwards, the lowest recruitment age became 18. In such cases, employees were expected to spend their entire career working for Barclays (Ackrill & Hannah, 2001). Most of Barclays' staff at the time consisted from such candidates. Other than this, the company only recruited a few specialists in certain fields that required a more thorough and specialized education, therefore not allowing Barclays to recruit them at a younger age. Nowadays, Barclays' recruitment process is similar, but not in all aspects. For example, Barclays still recruits young employees, not as young as in previous decades, but orienting very much on fresh graduates or students. The difference is that such candidates no longer represent a majority in Barclays' staff. The company understood the fact that the complexity of today's financial operations requires employees with experience and specialized education rather than young, inexperienced ones, and has oriented its recruitment and selection process in this direction. The downside of this situation consists in the fact that the banking environment hs not always been as attracting as it currently is. In past decades, the banking system was considered by employees as being a secure one, suitable for those who wanted a secure, long career in the same company, with clear prospects of promotions and increasing wages. This meant that brilliant candidates most often avoided the banking system, being drawn to more exciting areas. But modern times have changed this perspective on the banking system. The global banking market has increased, the services provided by financial services companies have significantly diversified in the past decade, as a response to new requirements of the market as a whole and of customers in particular. This allows Barclays to diversify its human resources recruitment process. The candidates that currently enter in the selection process for the company are more specialized, the company orienting towards more experienced candidates and towards those that present brilliant potential that the company can exploit on medium term and on long term. The company's trend in retaining its employees is continued in the present also. For example, Barclays' professionals in the field are developing strategies for providing long term carriers within the company for most employees, in other words for "building an engaged workforce" (Barclays, 2009). The reasons behind this strategy consist in the fact that such a situation would allow Barclays to benefit from lower staff turnover, higher sales growth, and consequently to increase customer satisfaction, which in turn leads to higher business performance. Barclays' attitude towards its existing and future employees seems to lead to the conclusion that the company follows that stakeholder theory, rather than the shareholder theory. As mentioned above, employees are a company's most valuable resource. Barclays has made it very clear that its employees are one of the most important stakeholders, and, as a consequence, they should be treated "as an asset not as cost" (Barclays, 2009). By implementing such an attitude, Barclays is trying to develop a similar response in employees' attitude towards the company, determining them to be loyal to Barclays. In other words, the company's professionals expect to retain their most valuable employees by treating with respect, acknowledging their merits, and rewording them in consequence. Even more, in order to show its employees that Barclays cares about their future and well-being, the company encourages and helps them in developing their own Personal Development Plan. As a proof, the company invests important amounts in training and development programs that are intended to meet their professional desires and plans, and to improve their skills and knowledge. The main principles upon which Barclays builds its human resources strategy includes: winning together, best people, customer and client focus, pioneering, inspiring trust (Barclays, 2009). Barclays has implemented a differentiated rewards system. In the UK, Barclays' human resources can be described by the following figures: FTE reached 60,700 in 2008 compared to 61,900 in 2007; the average length of services is of 9.2 years. The percentage working part time is 16.1%, a value that has remained constant over the past few years. The turnover rate has increased 19.3% in 2008 from 16.6% in 2007. The resignation rate has remained slightly constant around 12.2%. As mentioned above, Barclays aims at eliminating any kind of discrimination regarding human resources. In this area, Barclays is actually a pioneer, being one of the first financial services companies to hire female employees and to promote female employees to top management positions. For example, women's percentage of all employees reached 56.1% in 2008, percentage of management grades reached 28%, while the percentage of senior executives reached 14.6%. Ethnic minorities represent 12.3% of all employees, 11.5% of management grades, and 8% of senior executives. The Barclays UK Retirement Fund currently has 58,316 active members. The company has 50,499 current pensioners.

Integration of the rewarding system The global economic and financial crisis has left its mark on Barclays' activity. The staff rewarding system has not remained indifferent to these changes. Before the crisis, Barclays was seen by its human resources professionals as a company that provided real rewards that significantly stimulated employees to improve their professional performance within the company. But the crisis has determined Barclays' managers to rethink the rewarding system. Barclays' financial performance in 2008 had immediate repercussions on the company's staff rewarding system. Barclays' profit in 2008 was 14% lower that the company's profit in 2007. As a consequence, a series of remuneration levels have been reduced. For example, a final dividend for 2008 was not paid. Even more, the company did not pay any performance bonuses in 2008. Also, the company has announced that wages will not be increased in 2009. Executive directors will be mostly affected by this situation (Barclays, 2009). The signal sent by these measures might translate in a feeling of insecurity among the company's employees. However, such measures are implemented in most companies during the crisis. The effect of these measures might consist in lower efficiency for the company's employees. Human Resources Strategy Discussion There are three main types of human resources strategies: pthose oriented towards investments, those oriented towards value, and those oriented towards resources. Barclays implements a combination between the strategy oriented towards investments and the strategy oriented towards value. In other words, the company does not limit its investments to economic and technical aspects, but it also takes into consideration human resources. Advantages of these strategy includes aspects like: diminished resistance to change, it allows for timely planning of human resources necessities, it reduces recruiting and training of employees when new technologies are introduced, employees become more sensitive to the issues regarding the company's development strategy, it significantly increases the reaction or adaptation capacity of the company to modifications determined by the market. The part of the human resources strategy that is oriented towards value brings into attention employees' necessities. The most relevant values for the company include: justice, performance principle, individual accomplishment, social relations, safety, information and communication. Recommendations It is difficult to make recommendation for a staff rewarding system in times of global economic and financial crisis. As mentioned above, Barclays has reduced most of its financial rewards and bonuses, except for the cases in which they have been completely eliminated. However, it is very important that they employees feel they still matter for the company, even in such harsh times. They must see that the company is still willing to invest in them, especially during these times, which will increase their loyalty towards the company. If the feel the company is going to extra lengths for their well-being, this will determine a similar behavior from the employees towards the company. Given the fact that the company is currently financially stressed, Barclays should implement reward methods that do not necessarily require financial bonuses or salary increases, but that show the company's interest towards its employees. For example, the company should develop a more attractive retirement plan for young employees. Even if most of them will probably not retire from this company, it will give them a sense of security that will be appreciated. Other rewards that can be implemented by the company include: facilities for spending leisure time, financial consulting, free meals, specific services, awards, commissions, and others. Regarding the required budget for implementing the above mentioned reward system, it is estimated that it will not be a significant one. The company will not spend any resources on salary increases or bonuses, exactly like in 2008. The rewards mentioned above are intended to reduce the rewarding system budget during the financial crisis. It is expected that the cost of these facilities will not exceed 20,000 ? for each employee on an average.