Fast evolving local job market making HR function more crucial

The Human Resources function in most companies is taking on a more important role in the light of a fast evolving Maltese labour market. The strong economic growth experienced by Malta in the last years, has led to a lack of availability of employees with the appropriate level of skills and experience, and as Maltese employers have sought to make up for this shortage with the employment of foreign workers, they now have to manage a multicultural workforce.

This is one of the main outcomes that emerge from MISCO’s fourth annual survey on HR Developments in Malta presented during a morning MISCO in the Hot Seat event at the Corinthia Palace in Attard which was attended by over 40 HR professionals and practitioners.

Rebecca Zammit Marketing and Opinion Research Director explained that “the report was compiled by MISCO’s Advisory, Selection and Marketing and Opinion Research Units and is based on a survey conducted between August and September amongst businesses in Malta. Besides being a contribution to the ongoing analysis of the development of the HR function in Malta, the survey provides an insight into the key HR issues currently faced by companies, based on MISCO’s 34 years of experience in this sector.”

Speaking about the HR function today, Ritienne Xerri, MISCO’s Director responsible for HR Advisory Services and Training and Devel- opment Services said that HR has taken a bigger role and this was something confirmed by 79% of the respondents who also confirmed that this situation is supported by the fact that HR departments are also becoming larger.

“Whereas in 2016, 14% of respondents had stated that the size of their HR department was of more than five employees, this percentage now stands at 32%. In 2017, 55% of respondents stated that their HR department is made up of less than five people while the remaining 13% stated that the HR function is shared with other roles.”

Ms Xerri added, “The survey sought to find out what companies consider to be the most strategic objectives of the HR function as well as the major challenges. In fact three elements emerged as the key objectives namely staff development, staff motivation and staff retention, objectives that all got around 75% of mentions by respondents. Another indication of the increased recognition and visibility being garnered by the HR function is the fact that 60% stated that one of their key objectives was to provide support to the rest of management in managing their employees.”

“On the other hand, the biggest challenges for HR practitioners remain dealing with salary demands (66%), lack of qualified and experienced staff (48%), the lack of interpersonal skills (26%), and the lack of job applications (24%). The level of skills, experience and qualifications may be seen as being too low for the salary demands employers are facing,” added Ms Xerri.

Reference was also made to the way changing demographics and changing social values are posing a challenge to finding the right people for the organization. “Therefore, even if employers are finding it hard to find the employee they need, they should not succumb to demands that will be hard for the company to sustain in the future,” added Ms Xerri.

The challenges of recruitment are also very real. In fact, 71% of respondents stated that over the past year, they had more vacancies while only 5% had no vacancies and another 5% said they had fewer vacancies. The remaining 19% said they had about the same number of vacancies.

Joanne Bondin, MISCO’s Director of the Selection Consultancy Unit explained that the results of this survey show that the increased number of vacancies is more a result of higher staff turnover. In fact 75% of the vacancies arose to replace departing staff.

“This problem is not limited to specific sectors of economic activity or specific roles, but it is a problem felt across the board. Technicians and maintenance people for example are very hard to find and in such instances, companies are having to source employees from abroad. Yet recruitment difficulties remain mostly due to lack of experience (67%) and difficult salary demands (57%), two aspects that increased in importance throughout this past year. Other difficulties include lack of formal qualifications (30%) and lack of interpersonal skills (17%).”

“Employer branding remains key towards increasing the chances of attracting the best talent towards the organization however, performance management and compensation remain equally important aspects that help employers retain their talent. In this regard, the most common features in performance management systems implemented by employers include performance reviews (89%), objectives setting (78%), personal development plans (63%) and self-assessments (56%). However, we need to become more creative in how we evaluate jobs, how we manage the performance of employees, and how to reward employees,” added Joanne Bondin.

Another element covered by the survey was Learning and Development. A variety of learning and development practices are used. However, on the job training is the learning practice that received the highest number of mentions. This is followed by internal coaching and mentoring and by conferences, seminars and workshops.

Respondents were asked how they evaluate their training needs. Just over three out of four respondents (76%) mentioned management requests. This was followed by employee’s requests, mentioned by 68% of respondents. This would indicate that most employers still approach learning and development in a reactive way rather than a proactive way. In fact, only one in three respondents mentioned utilising a Training Needs Analysis as a means of evaluating training needs.

Overall the survey indicates that HR departments are gradually introducing best HR practices and the next challenge for HR professionals will be to ensure that such efforts are sustained in the longer term and are not short lived.

Copies of the 4th MISCO Annual Survey on HR Developments in Malta may be obtained by sending an email to advisory@miscomalta.com