Nestlé’s Major Challenges:

Here are some of the common challenges which all the organizations face around the
world and Nestle Bangladesh Ltd is also facing all of these challenges more or less.

✓ Aging workforce and retirements

As most of the upper level positions are filled with aged personnel and each year
some of them are going to retire, Nestle has to go through a continuous recruitment
process to fill those positions when succession is not possible and finding the right
person is also a challenge as well.

✓ Less experienced and smaller younger generations

Our current job market is filled with new graduates who lack experience which Nestle
seeks to maintain the standard in their workplace.

✓ Lack of investment in training and education

Still most of the companies are reluctant to invest in training and development
sectors to increase the efficiency of the employees. Even though Nestle is offering its
own training and education program to its employees to be competitive in the market
and increase efficiency, more focus on this field is mandatory.

✓ Mismatch between training and education outputs vs. business skill needs

There is not enough capacity at educational institutions to keep up with corporate

and student demands, and this will only worsen as technology and innovation
increase the rate at which knowledge and skills become obsolete.
✓ Lack of appropriate succession planning

It is not always possible to fill up all the positions internally but when Nestle go for
headhunting, they face challenges in finding qualified managerial talent and skilled
workers.

✓ Recruiting from a narrow pool of potential talent

Because of rigid job descriptions and hiring requirements, Nestle recruits talent from
a narrow pool of potential talent. It may make it difficult to select the best talent from
the market.

Problems

While identifying the problems for Nestle Bangladesh Ltd we have divided it into two
sections which are Internal and External problems to make it more specific.

• Internal Problems

– Lack of proper Policy regarding talent acquisition

Nestle Bangladesh is following their international HR policy which is not always

applicable in Bangladesh’s perspective. Moreover they do not have any specific policy
for talent acquisition.

– Lack of motivation to keep the talents competitive.

After acquiring talents, they have to be given proper benefits and compensation. At
the same time, regular training is also required to keep them competitive but Nestle
has some shortcomings in keeping the talents competitive.
– High turnover rate

Nestle has to conduct recruitment at a regular basis which implies that they have
problems with retaining efficient employees.

– Talent costs this year are inflated

According to some recent analysis, the cost of retaining talent has increased 25
percent. Executives and HR professionals from large and small companies
overwhelmingly report that increased competition for talent is leading to higher
compensation packages, slower time to new hires, strains on quality and customer
service, and reduced business flexibility.

– Poor image

But we have found out from our research that Nestle Bangladesh is not yet as
lucrative as other competitors to young professionals. It does not have a good image
compared to other MNCs in the job market which may influence to attract candidates
to apply for the positions.

• External Problems

– Brain Drain

As a result of rising costs and time required to hire good new talent, organizations
are increasingly looking inward to train, develop, maintain and evolve their existing
workforces. However, after training employees are leaving after a moderate period.

– Lack of efficient Human Resources

According to a survey, Bangladesh is the 7th largest country in terms of manpower,

but we do not have sufficient potential talents to meet the need of the current
market.
– Competition with other MNC to get talents

Nestle has to compete with other renowned MNCs to get the potential talent from the
job market which is becoming more and more competitive day by day.

– Talent Gap

Newcomers often lack the practical experience and the creative and leadership skills
that are required by the companies. The talent gap impacted business flexibility,
expansion and growth.

Observation and Evaluation:

Nestle Bangladesh has come up with many innovative and feasible Management
policies which are new in Bangladesh. In addition, these policies have already been
implemented in their other foreign subsidies and running successfully till today. It
has also created a benchmark in the industry and brought competitive advantage for
the organization. Some of their policies that have impacted them a lot are given
below:

❑ Flexible HR philosophy

Nestle Bangladesh practices a flexible and dynamic HR policy in the country.

Therefore its implementation is inspired by sound judgment, compliance with local
market laws and common sense, and also taking into account the specific context. As
a result, Nestle has some common grounds in Human Resource Policy which is set
apart in all their subsidiaries like working environment, recruitment, expatriation
policy etc. In addition, Nestle follows “Corporate Business Principles” that refers to
all the basic principles which Nestlé endorses and subscribes to on a worldwide basis.

❑ Perspective of Talent Acquisition

According to the international Human Resource Policy of Nestle, “The best indicator
of talent is achievement.” Therefore their philosophy is to provide responsibility to
allow people to prove themselves. For this, candidates for managerial positions are
clearly demonstrated earlier and reviewed for their willingness and ability to apply
the Nestlé Management and Leadership Principles. The Nestlé Management and
Leadership Principles include the guidelines inspiring all the Nestlé employees in
their action and in their dealings with others.

Even when promoting employees intensively from within the organization, it is the
role of management and HR to keep an eye on valuable candidates from outside and
to benchmark internal skills with external offers.

Consideration taken by Nestle Bangladesh

To comply with the changed business world, Nestle Bangladesh has been considered
some of the factors to emphasize in their Talent Acquisition policy:

❑ Human capital: Human capital is the major concern for Nestle Bangladesh. To be
more productive and efficient in operation, Nestle Bangladesh concentrates on their
human resource. They thoroughly analyze the performance of their employees and
act accordingly whenever there is lacking.

❑ Globalization: Nestle Bangladesh itself is an entity of globalization. Nestle has

been operating in many subsidiaries. To cope up with international business barriers,
they most likely follow a common HR policy that helps to attain business
profitability.

❑ Technology: Nestle Bangladesh uses state of art technology in their production

floor. To adapt with the new technology and machinery, the organization has
introduced training programs for the workforce. In addition, they also bring
technicians from their other subsidiaries.

❑ Economy: Economy of the country is the most important demand of any business
organization to be profitable. Inflationary adjustment of the product price,
unemployment rate, buying pattern are determinants of the business growth of
Nestle Bangladesh. As a result, Nestle Bangladesh always tries to cope up with the
economy.
❑ Environment: Internal and external environment of the organization is the
determinant of business success for Nestle Bangladesh. For internal environment,
Nestle Bangladesh has successfully demonstrated its philosophy for working
environment, production floor safety caution etc. Moreover, they have identified
their threats and opportunities successfully so that they can win over any
interventions in the market. They have gained competitive advantage in Bangladesh
market for their consumer products against their other competitors.

Future Plan

Currently Nestle Bangladesh is following module 1 out of the 7 modules which are
being practiced by the other countries. Module is a code word that Nestle uses for
their own set of rules, regulations and strategies that they have divided into seven
parts naming them module 1, 2, 3 and so on. Now after the recent audit done by ISO
2200k using the 2007 module i.e. module 1 and after getting good remarks from the
ISO, Nestle Bangladesh Limited is now planning to exercise 3 modules out of the
seven in Bangladesh. Thus with the successful practice of three modules Nestle
Bangladesh is hoping to have a more transparent, well organized and efficient
interlinked meshwork of skill, knowledge and commitments between its employees
from the top level to the lower level.

Develop a new Talent Acquisition strategy

Outplacement Consultants, Talent Acquisition, Recruitment Consulting

As an organization's benefit, many organizations try to create an organizational

image for their company to attract talented employees. They try to target universities
and professional institutes to be acquainted with the under graduates. They also
arrange seminars, job fairs and sponsoring events to get well known in the industry
and to the people in general. By doing so Nestle also focuses on attracting promising
talents to their organization. Before the search the organization must make sure that
they have the financial capabilities to negotiate and bargain with talents upon hire.
Then the focus must be on how to improve the intake procedures on what ground the
candidates will be evaluated upon and what will cost the organization to perform this
entire task. After sorting the numbers comes the part of approval from the HR
department or the HR consultant, this approval is necessary because it will help the
organization understand the competencies they have selected or designed with the
compensation package are complementary to each other. After the endorsement
form, the HR the company should co forward with the talent Acquisitions.

They should focus on building their brand image to attract new talents.

The current situation of the company is that they are not concerned enough to build
their brand image. The company does not have a brand image in the country and
there are very few people who know about the company. When we asked them about
their brand image, they told us that they do not have to build their brand image
because they are already popular in the eyes of the international buyers. They are
popular in terms of their Social Compliance Certificates. However, they mentioned
that when they give job advertisements to newspapers and other media, then they get
a very few number of candidates from good universities. Therefore, the probability of
the company to get talented persons decreases largely.

For these factors, we think that it is important for the company to start thinking to
build their brand image. They may not need this for marketing their product but in
order to get brilliant people for the organization they have to go through this. There
are some techniques that can be used to make the corporate image more popular in
the eyes of potential candidates. For example, they can organize talent programs like
Battle of Minds from BAT, Seminars in different universities, sponsoring various
programs of different universities and so on. In this way, the students of different
universities will get to know that this time AST is doing some collaborative programs
with their universities and when this will happen, they will be able to create a brand
image in the minds of people.

Well, the justification behind this recommendation is that when the name of this
company will gain popularity in the minds of the students, then they will have a trust
for this company and therefore the willingness to work for this particular company
will emerge from the heart of the students. Therefore, in the process the company
will get talented persons in their organizations, which they need now for competing
internationally.

Conclusion

We found that the company knows a lot about appropriate Management practices
and it performs some of the important functions like Recruitment, Selection,
Induction, Coaching, Mentoring, Succession planning and some more. We were glad
to see that in order to comply with the labor law they have incorporated some
programs in their organization, which are modified to the needs and safety of the
laborers. These are Medical and Health Care Units, Day Care facilities for the
children of the laborers, Training Program for laborers to increase their skills and
efficiency, Worker Awarding Program to reward the best performing worker and
some more. However, we found Nestles needs to improve in some areas. These are
like when they recruit managerial employees for HR jobs, they should take care to
select only them who have an HR background and also some experience despite the
present practice of hiring HR executives from having degrees in other fields. Then
they need to improve their brand image, their compensation package for the
employees and should develop an HRIS system for the benefit of the company.