One in four companies surveyed had to reduce number of employees by 6% or more in 2013, due to market conditions, according to a recent study from Ensight Management Consulting.

The number of companies that implemented cost reduction measures decreased by 14% year-on-year, while 70% of the companies renegotiated contracts with suppliers as a cost cutting measure, and the figure is significantly higher than in the previous year. Training budgets continue to go down, for the sixth year since the downturn started.

“However, cost cutting plans are now in the background: streamlining operations and increasing sales are mentioned by respondents to be the preferred measures for HR and also for business. Almost half of the companies surveyed have continued restructuring measures in 2014,” shows the survey.

According to Ensight, the HR function in organizations has not reached the desired maturity yet, most HR leaders being involved in the implementation rather than in developing business strategy or discussing it. About one third of the HR practitioners polled in this study admit that their awareness about the company's strategy is medium or low.

Moreover, HR initiatives are not sufficiently understood and put into practice at an operational level and many of them are not integrated into the company strategy.

One in four companies surveyed doesn’t correlate the pay to the performance evaluation results, reveals the study. Three out of four companies are paying their management team and sales staff according to their results.

Half of the companies have implemented a talent management system and three quarters also measure its effectiveness. Most of the companies with a job rotation system include a maximum of 20% of their employees in these programs, the study reveals.

According to Ensight, social networks, such as Facebook or Linkedin, are used by three quarters of the surveyed companies in order to communicate their brand to potential employees.

Over 50 companies responded to this study, mostly medium and large-sized companies with over 100 employees and a turnover that exceeded EUR 1 million in 2012. A total of 90% of respondents are HR professionals, most of them holding management positions. The respondents are mainly from the IT&C, financial services, and retail and distribution industries. Data were collected between August-November 2013 and were interpreted in 2014.

Irina Popescu, irina.popescu@romania-insider.com