By Anton Roe, Director, Barclay Meade

Over the next 12 months, the HR sector will play a pivotal role in the restructuring of businesses across the UK as we move on from the recession and focus on economic recovery.

It is a busy but interesting time in HR as companies juggle the impact of public sector cuts, the VAT hike and the possible rise in interest rates. In the post recession climate, the predominant focus for businesses will be on staff retention, identifying internal ‘talent’ and ensuring a level of engagement to keep the best employees on board. HR directors will be important in reviewing the needs of the business and in considering whether the right team is in place, be it at director, middle management or entry level. Staff retention has always been a key focus for HR, however in the current climate there is a greater need to secure the best talent as it’s in short supply but high demand.

The difficulty in retaining staff comes down to balancing a business’ needs with the needs of its staff. It is a dilemma exemplified by the ongoing discussions between the Government and UK banks who are trying to reach an agreement over lending and bonuses. The country’s five largest retail banks grouped together under the title “Project Merlin” to try to agree on suitable lending figures and reasonably sized staff incentives. The issue for the Government is how to retain the expertise and talent of its workforce (British bankers), achieve their wider business goals (increased availability of funds for lending) and avoid the bad publicity of paying excessive bonuses whilst pursuing an austere agenda.

The challenges of finding this balance are felt by many businesses, but the key to overcoming these problems is for HR directors to implement effective employee engagement programmes, with the key levers on opportunities for development, reward and recognition. There is a growing realisation that people no longer base all there aspirations and contract demands simply on money, they want more than that. So there is a need for companies to promote and deliver sustained personal development opportunities to all of their work force.

With the cost of living on the up due to the recent VAT hike and the likely rise in inflation rates, there might be a temptation by businesses to increase wages to retain employees and attract candidates. However, they should focus on offering diverse benefit options based on personal development and skills training, rather than financial incentives. This will help maintain financial stability and also ensure that a workforce is well-protected and invigorated. It all falls under the need to improve and manage organisational effectiveness through better candidate experience, for both new and existing employees.

Balancing the scales between business needs and staff needs will be made more difficult by the restructuring of the public and private workforce across the UK. With heavy public sector job losses expected in 2011, there will be an increased role for HR in supporting firms making redundancies. Making mass culls to a workforce without implementing thoughtful strategy could be hugely detrimental to a company’s ability to attract talent in the future. An expertise is required to identify who the business can afford to let go to ensure the right staff remain and business performance is maintained.

The aim of candidates in 2011 should be to pinpoint core skills and personal strengths and focus on these specialisms to secure the best opportunities available. In particular, the uplift in the financial services and manufacturing sectors will present workers in the HR sector with ample job opportunities, and if you are able to mirror specific skill-sets to the requirements of an employers you become a more attractive proposition.

With people development and organisational restructuring at the heart of business activity in 2011, HR will be hugely influential in creating new strategies, stimulating growth plans and optimising business potential to drive the UK to a full recovery.