Microsoft's human resources practices and strategic approaches

Microsoft HR Advice

Microsoft is the biggest company in the software industry and one of the largest in the world. Its constant development ever since its beginnings in 1975 have brought about a series of additional concerns. Given the fact that Microsoft relies, first of all, on its human resource and expertise, this should be analyzed carefully.

External Environment - Main Factors

There are several characteristics of the software industry worth investigating here. First of all, the software industry is evolving at an incredible pace, perhaps the fastest in all industries. This means that the customer constantly demands new products and new updates and improvements to the existing ones, but also that new product segments constantly emerge in the industry. There are several actions that Microsoft approaches in this sense.

Mainly, there is its "pioneer strategy" that includes extending its products, improving and developing new products. In order to achieve this desiderate, Microsoft's research and development department is the bets in the industry, with some of the bets experts available working here. A strong research and development team is essential when operating in an industry with rapid technological changes as the software industry is.

The attractiveness of the software industry is an incentive for other competitor companies, especially given the opportunities provided by the Internet and Internet-afferent activities. Netscape's case for Web browsers is eloquent, with Norton Antivirus and Linux (as an alternative operating system) as additional examples. Microsoft's sheer force makes possible a strong reply and the partnership, mergers and acquisitions strategy that Microsoft has successfully mastered has been used to get control over new technologies and skilled employees. The problem here, as generally in any mergers or acquisition, is the post-merger integration of the company, fitting the existing structures over Microsoft's, etc.

If we refer to the external environment, we should also briefly mention the legal component which, ever since the 90s, has played an important role in Microsoft's existence. I am, of course, referring to the antitrust cases, but also to IRS follow-ups on the use of contracted workers as a form of tax avoidance.

3. Internal Analysis

One of the first concerns for Microsoft should be the increasing it labor shortage, manifesting itself at a significant pace in the last years. This is determined by the industry's competitiveness and the sheer size of the software industry. There are two ways to approach this problem in the future, both of which have already been in Microsoft's attention.

Starting from the premise that the it labor operating in the industry is limited, Microsoft has launched the Microsoft Skills 2000 program, which is meant to bring people from other industries to the software industry. Through websites and job fairs, people are encouraged to take it aptitude tests, with the hope that many of them may find an interest in working in the software industry. Applied at student level, this program may be efficient and it is also something which is cost efficient.

The second solution that may be applied in this case is finding specialists overseas, with an accent on the relocation process that Microsoft has been using (Ireland and Puerto Rico are two excellent examples in this sense). Countries in Eastern Europe or India, for example, provide excellent specialists. If they are used in their country of origin, the company can save immense costs on salaries, additional work-related packages (insurance, pensions) or the administrative costs of an outlet. In countries in Eastern Europe, despite their admittance to the European Union, salaries up to $600-$800 for a programmer (with increases up to $1,200-$1,500 for senior programmers and project managers) are still very high. If we compare this to the salary cost of an average programmer in the United States, we may sense a remarkable difference. Such an extended relocation program will certainly prove cost efficient in the long run as well.

Another problem that Microsoft faces on a day-to-day basis refers to the recruitment process. As I have previously mentioned, Microsoft's activity relies greatly on its research and development departments. In this sense, it needs to assure that the most qualified and best skilled workers available are discovered and directed towards the company. Additional investments in extending the screening and discovery phases of the recruitment process are most important.