Long gone are the days of hire and fire; now more than ever, companies have to utilize a two-pronged personnel strategy. According to a recent study conducted by the Cologne Institute for Economic Research, companies have to have flexibility to weather difficult times while keeping good personnel and developing their skills. The institute interviewed 1,853 personnel managers from companies of various sizes; the results showed that most companies rely equally on flexibility and a focus on employees. This makes it possible for them to absorb the shock of fluctuations in demand or a negative order situation through overtime reductions or the reduction of built-up time on timesheets.

Many companies are already feeling the hurt of a skills shortage, which is why one in two companies realizes that measures for staff retention are gaining in importance. In large companies, even three out of four personnel managers agree with this. But what does this really mean? High up on the list is having trust in employees' individual responsibility and annual appraisal reviews. Two thirds of all companies - and almost two thirds of all large companies - require their management teams to improve employee satisfaction. 

Innovative and successful companies are the ones to first recognize the value of utilizing an employee-focused strategy. About 7 out of 10 of these companies employ a family friendly and equal-opportunity personnel strategy. The same amount allows their employees freedom to develop their own ideas that benefit the company. Over the half make it possible for their employees to participate in self-dependent learning.

Innovative and successful companies are also at the forefront when it comes to improving structures and processes. Half of them encourage employee participation in internal work groups. Only one third of the non-innovative and unsuccessful companies do this. More than half of the successful companies interview allow their employees to participate in the management's strategy meetings; this number is much lower within unsuccessful companies. 

Another aspect that falls under progressive personnel management is the proliferation of telecommuting in companies. This is a point where the economy is become more and more active. In a survey conducted by the Cologne Institute for Economic Research for the German federal government, 22% of companies allowed telecommuting in 2009, which was three times as many in 2003. Most studies on this topic have the same tenor: Telecommuting is advantageous for both employees and employers. Competition between companies for the best personnel is in full force, which means it's in the employer's best interest to offer the best possible working conditions. Many companies also consider allowing telecommuting to be an environmental decision: It reduces the transportation between home and work.

Source: Cologne Institute for Economic Research