HR Department Transformation Plan for SG-Local (SGL)

Company Background SG-Local (SGL) is a small MNC with its HQ in Singapore. It is in the Information Technology (IT) and Engineering business, including web design, delivery of e-commerce solutions, turnkey IoT (Internet of Things) solutions, big data analytics, artificial intelligence, etc. Other than doing IT system delivery, 10% of SGL’s employees are in R&D and the company’s intellectual property portfolio includes 55 patents.

Founded in 1983, SGL currently has 15,000 employees and operates in 12 different countries. During the 2008 financial crisis, SGL froze all corporate headcount including that of the HR department. Between 2012 and 2018, as the SGL global business grew, total employee headcount increased from 12,000 to 15,000 employees, but the HR department headcount remained the same as the 2008 number of 100 HR staff.

Since 2012, SGL management has received very frequent complaints by employees about the low-quality and the slow speed of internal HR support services. The major problem that contributed to this is the high turnover rate of the SGL HR department; with a total of 100 HR staff across its global operations, the department averaged 25% employee turnover per year since 2011. Anecdotal evidence shows that resigning HR employees say they are overworked and underpaid; the HR employees leaving SGL typically report at least 55 working hours per week. The Global HR Director has changed three times since 2012. All HR department employees are employed on a permanent basis; there are currently no contract HR staff.

The CEO and board of directors has decided that the entire HR department in SGL needs to be transformed. The first priority is to do a thorough review of the HR department, especially its compensation system and all related factors that caused the alarming HR department turnover rate of 25%

For this question, you are to prepare information to support the transformation of the HR department. You are expected to complete the following:

(a) Milkovich, Newman and Gerhart (2014) defines: “A survey is the systematic process of collecting and making judgments about the compensation paid by other employers.”

Conduct a survey on the salary scales of HR professionals; identify seven benchmark jobs in the HR department for this survey. Select the context from either the private sector or government sector. This information is readily available on the Internet (e.g. Morgan Mckinley, PayScale, etc.). Use a table to summarise your findings and supplement the table with detailed explanations in report format. As covered in class, do note that the output of this survey would serve as the input into the next step of designing a market-competitive compensation package for the HR professionals

(b) Do research and/or interviews into the workload of typical HR professionals in Singapore, and the related HR-to-Employee Ratio. Using this information, estimate the number of employees in the HR department needed to adequately support SGL’s 15,000 employees.

(c) Discuss five methods how you would make up for the shortfall in the number of HR department employees, assuming that 10% of the HR department workforce are due for retirement in January 2019. For each method used, you are to explain and justify why you are using that method

You are to design a new compensation system for SGL’s HR professionals; illustrate and explain using a pay model concept. You are to use the principles covered in HRM313 lessons and the textbook. In particular, make use of this figure in answering this question: Exhibit 1.5 on page 18 Compensation – 11th edition. Marks will be awarded for thoroughness.

(a) Examine which of the HR jobs in SGL you need to benchmark, and do the actual benchmarking using the data collected in Question 1(a). You should cover at least four benchmark jobs.

(b) Design the salary grades / bands for the HR professionals who are diploma holders and graduates. 

(c) Construct the pay policy line for monthly base salary plus bonus. Do this for two job families: (i) HR Generalist, and (ii) HR Specialist. HR Generalists typically do the dayto-day administration of HR work – e.g. answer queries on HR policies, schedule job applicants for interviews, manage administrative out-processing of resignees. (ii) HR Specialists are typically at the Manager and above levels who do higher-level HR tasks such as calculate starting salaries of mid-career job applicants, do HR analytics work, strategise HR transformation, and manage HRIS projects