a new vision for human resources

8/18/2019 A New Vision for Human Resources

1/16

VII.

LoorrNc

AUEAD

E MENTIoNED

EARLIER

hat

staffdepartrnents

have

typically

been

üewed

as

expense

centers.

Y

Y

This

view

developed

as

everyone

bought

the idea

and

began

to

ru¡nage

staff

functions

that

way.

Cutting

the

cost of

sta{Ifunctions

has

ong

been

a primary

objective.With every dor¡mturn in the business ycle, staff

groups

are

decimated.

n

many

cases his

has

been

proven

to

be

penny-wise

and

pound-foolish.

Staffdepartrnents

play

a

vital role

when they

connect

themselves

o the

SQP

objectives

of their

line

customers.

A

better

way to manage

Staff

s to

view

them

as

potential

contributors to profit. If you askedyourself what could we

do in human

resources

o

contribute

to

profit,

you would

think

of several

ways

ro

do

that.

This

book

has

described

many

tools

and

processes

or

contributing

tangible

value

to

the

entelprise.

99


2/16


3/16

Looxt¡¡c AuEAD

began

to

wonder

how

in the

world

they were

going

to

competewhen they didn't haveenough of the necessary

skills

resident

n the

workforce.

As the

economy

boomed,

recruiting

heated

up

and competition

for

technical

skills

became

a pitched

battle.

Over

time,

a shortage

of reliable

workers at

all levels

became

a central

problem. The

more

farsighted

ooked

up

from

the daily

srruggle

and decided

they had to coruider the future aswell as the present.This

led

them

back to

workforce

planning (\MFP).

Let's face

t,

WFP is

redious.

t requires

developing

a vast amount

of data

on the competencies

f the

current

workforce.Just

setting

up the

system

and getting

agree-

ment

on definitions

and levels

of

skills

can be

drudgery.

A small number of

companies

have

persevered

and

developed

a thorough

description

of their

skills

profile.

Others

are studying

ways to do

it

that

won't

be so

time-consuming.

No matter

what

size

your organization

s,

you

have

to look

ahead

to your future skills profile. If you devore

a reasonable

amount

of

time

to

planning,

you

will have

it returned

in

reduced

hiring

time

and

cost, ower

training

costs or

new

employees,

and

probably

higher

productiüty

through

a more

stable

and motivated

workforce.

Stf f ing

Hiring

during

periods

of

sustained

high

growth

becomes

an

all-consuming

ask.

The

only

thing

that

will

make

it

easier s

having

good data

on the results

of your

current

practices.

Doesn't

it

make

sense

hat

if you

know

how

much it

costs,

how long

it

takes,

and the

quality

and


4/16

A

Nzw Wstou on Huu,sN

REso(mcES

availabfity of

each of your major

sources,you can do a

better ob? The classic xcuse s, "I don't have ime to

arralyzewhat I

am

doing;

I'm too

busy."

As

they say, hose

who ignore history are condemned

o

repeat ts

mistakes.

The same

s

true here. A little time

devoted now

to

mea-

surement

and analysiswill pay

back later in reduced

work-

load

and

lower

stress or all-not

to mention reducedcost.

Poyi"g

Pay

coverswages,salaries

and

benefits-the

total

cash

investment n human assets.

We can do a

better

ob

of

managing that investrnent

f we look

at

it

from a resource

üewpoint. First, we should determinewhat percentof

revenue he business

onditions dictate to

be üe most

efficient

level

of pay. That is, how

much of

every dollar

we take

in should

we

invest

in

human assets?This is

a,nalyzedhrough a pyramid model,

shown in Figure 12.

Figttre 12. Pay

uram.id.

Productivity


5/16

Looxtyc

ATTEAD

How

much

of your total compensationdolla¡ can

and should

you invest in initial

pay levels for new

hires,

to maintain

and

retain skilled

personnel, and

to motivate

them to

be productive? There

are

many

options here.

The

decision should

be basedon management's

philosophy

regarding human

value added

and the

company's abfity

to pay. By looking at the question from üe standpointof

the pyramid

you might get new insights.

Deueloping

Employee

development

s no longer

an option. There

simply aren't

enough

skills in the national

labor

pool

to support

the

growth curve into

the next

decade.The

make/buy

decision

has been

preempted

by a

lack

of

sup-

ply.

The national

investrnent n training

has

been increas-

ing at a

steady

50/o er year, compounded

since

the early

years

of the

decade.The

key

business ssuenow

is

where

to spenddevelopmentdollars. Basicskills, management

competencies

nd executivedevelopment

are all priorities.

Despite

the obüous

basic skills shortage,

we

would sug-

gest hat

the

biggest opportunity

is in executive

eadership

development.

A study of

600 companies

acrossmany

industries revealed

a belief that leadership

n the twenty-

first century will requirenew skills and insights.* In the

final

analysis,

f

we

don't develop

effective eaders,

we

won't have to

wony about basic skills

because

we will

be out of business.


6/16

A NnwWstoN

ton Huu¿N RnsouRCES

Retaining

\Arhen

the supply

is limited,

a

wise

strategy

s to pay

attention

to keeping

what you

have.

Consider

what

it costs

to

lose a sklled employee:

he direct costs

of termination,

hiring

a

replacement,vacancy

costsand

learning

curve

loss.These

add up to

more than one year's

pay

and bene-

fits for an exemptperson.Add to that the externalcosts n

unhappy

and

lost customers,

and the number

goesout

of

sight. One

study

claims

that the

costs

of

losing

an effective

salesperson

an

take up

to three years to

recover.tn

The most

coflrmon

causeof voluntary

termination

is

not pay

or opportunity

elsewhere.

That only tips

the scale

in favor of leaving.An ongoing study now covering over

20,000 cases

of voluntary

turnover has revealed

hat

800/o

of

the caseswere

triggered

by problems

with

a supervisor,

working

conditions,

and perceived

ack of career

opportu-

nities. Work

conditions

related to

flexibfiry and

respect or

the worker's

personal

needs.

Acnrally, this is good

news.

Youmight not be able to outbid someone or your valued

employee,

but you

certainly

can do something

about

supervisory

skills,

working

conditions, and

career

oPportunity.

Working C ross-Functionally

In our

cornbined

forty years

of

human resources

experi-

ence,

we

have seldom

seen

HR departments

n

which

all

the sections

work

as one unit.

The intention

might

be

there, but

few HR directors

have developed

management

systems hat induce everyoneto work

for the gteater

good

of

HR.


7/16

Loortt¡c

ArnAD

There

are

natural

connections

across

sections

of HR

that areoften ignored.Following

¿re some

examples:

.

Hiring

and

taining:

The

buy it

or make

it

question

should

be

discussed

mong

all

HR sections

nd,

most

import*tly,

the

staffing

and

development

people.

. Payingand Retaining:Employee-relatiorspeople,

if they

are

doing

their

job,

can feed

a good

deal

of

information

to

the compensation

and

benefits

Soup

about

employee

amiq¡des

oward

pay

and benefits.

.

Paying

and

Benefits:

:r many

large

comparries

he

compensationand benefitspeoplearedisconnected.

If they

communicate

effectively

they

can find

ways

to

maximize

the total

return

on investrnent

n

human

assets.

.

Planning-Statrng-Paying-Developing-Retaining:

The

human

assets

of the

organization

need

to

be

reviewedholistically.Peoplecareas much about

personal

growth

as

pay.Th.y

are turned

on

and

off

by

policies

n all

five

areas

of the

HR

star.

The

best

solution

is usually

found

in

a

fivepoint

view.

Monitoring

the

Effects

of a Collaborative Approach

When

HR

professionals

work

with

their

managers,

cus-

tomers

and

their

professional

colleagues,

üe results

are


8/16

A Now VtstoN

on Huu¡N RtsoLncns

usually

measurable.Th.y can trace the effectsof their

work

in severalways:

.

Lower

hiring costs

.

Faster ime

fillingjobs

.

Higher-quality

hires

.

Higher levels of

retention

.

Lower development costs

.

Higher levels of productivity

To set up a valid

and reliable measurement

program,

all

you need to do

is have

clear targets

n mind

at

the

beginning of

the process.

Then,

you

build a case

or the

relationship between

your

recornmended

action steps

and

effectson business

nit

processes.

t is much easier han

you think.

This book

has

provided many examples

o

guide you.

The

Top

Ten Measures

of

HR's Effectiveness

There is

no

end

to the number

of actions

and results that

can be

measured.

What

to measuredependson what

is

important

to the organization. As a generalization,

we

would

say that the

following

¿ueamong

the most impor-

tant for most companies:

10. Healtlrcareost

er

n

flqu.

The

aging workforce

will

put added pressureon

healthcare

cost con-


9/16

Loot


10/16

A Naw Wstou

ron HuwtdN

RnsouRCES

5 .

4.

3 .

furnnuer

cost.The

ey issue

n

turnover

is

not

only that skills are lost, but so is a lot of money.

There

are four

components

of

turnover

cost:

termination,

replacement,

vac¿Incy,

nd

learning

curve

loss.

Losing

as few

as

six skilled

exempt

persons

can cost

a company

over

$1,000,000

fímz to

tt

¡ás.

Filling

jobs quickly-with qualiry

people-is

a

critical

need.

HR

has more

opportu-

nity

to influence

this result

than

any

other

func-

tion.

Time

should

be measured

n calendar

days.

R.enm

on

humnn

Pituf inuested.

or

decades

he

question

of

the value of

an

employee

has

been

debated.

Here

is

a

simple

solution:

Take

rev-

enue

and

subtract

operating

expense

ess he

cost

of

pay

and benefits.

This

"adjusted

profit"

figure diüded by the costof pay and benefits

shows

he

rate of

return

on

PeoPle.

Ifunnn

aalueadded.

Do the

same

calculation

as

Return

on

Human Capital

Lrvested,

but

divide

that

adjusted

profit

fig*. by

the number

of

firll-time equivalentemployeesand conffact

workers.

This shows

the

leverage

hat people

have

on profitabfity

expressed

as

adjusted

profit

dollars

per person.

flu sn¿

ltnt

meansfu

most

o

yot'tr

áar.

Be

honest:

Your

survival

and

advancement

are argely

dependent

on

your

boss.

It

makes

sense

o show

2.

1 .


11/16

Looxnvc

ArnAD

Human

resources

departrnent

costsand staff ratiosarenot included

in

the

Top

Ten.

That

is

because

hev

are

of lesser

mportance.

triorm

ollows

function.

yo,,

establi.h

the

size

and

cost

of

the

HR

function

based

on

the

organi_

zation's

needs

and expectations

rom

HR.

Budget

urrá

rt

ff

l:ol

the

driving

force

of

an

effecrive,

businesslartnering

HR departrnent.A clearvision of a value addingp.rlporJ

separates

he

best

rom

the

rest.

How

To

Contribute

Tomorrow

Anticipation

is

a

much-appreciated

kill

in

an'ncertain

world. HR must developthe insightsneeded o tell its

management

customers

what

is

coming

tomorrow.

This

is

not

magic.

Two

actions

"*

pr.pur.lro,r,

1.

Maintain

a

broad-based

iew

of

rhe

world.

The

important,

dtiri"g

forces

of the

marketplace

are

outside

of

HR.

Information

technology,socialtrends,financial

news

and

competitors,

actions

are

the

stuffof

prediction.

Scan

he

media

and

subscribe

o

an

Internet

news

page.

n

the

space

of

frfteen

minutes

a

day,

you

can

catch

the

most

important

events

hat

will

affect

the

investrnent

in human capital.

2.

kepare

the

HR

staflwith

business

kills.

Forget

HR

sklls

for

the

moment

and

concentrate

n

rhree

areas:

anulyhc

abiliry

selling

skills

and

intelpersonal

competence.


12/16

A

N¡l¡v

VwoN

on

Huntax

farsotnr¡r

*:*:*:,,,,ül"l : #:::.", h.w,he

uman

resources

unction

is

on

üe

ascendancy,

laiminq

that

because

humar

ogruzedasrheúü;',','#"*Unn:'lt*J:,

human

esources

ri.roio.,

i,

,iri.i.

.ilr"t

is

true.

Alhat

is

also

ffue

is

the

eüdence

tf."t

"fy ",*¿

percentage

of human resources

{orp.

are taking aclvantage

of

this

opportunity.

Wi¡ress

the

fact

thut

*áy

HRrri*"g*,

are

now

coming

roalnance,

_urketiág

and

op.ririo*,

not

from

wirhin

he

HR

prof.rriorr.

ThJ_.rrug.

should

beclear.

The

opportuniqg

pf"/ir't.rJ*a

now.

But

n

rder

ro

make

he

team,

HR

prár.rrl""i,

have obecomebusinessrofessional, , well.


13/16

Rn

rn

RE

NCE

s

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A

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a new vision for human resources

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