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Developing and retaining human capital-A challenge and a necessity

Manasvini Vimal Kumar

Personnel Administration MADS 6602

Fairleigh Dickinson University

15 December 2013

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Developing and retaining human capital-A challenge and a necessity

With the growth of technology and communication methods, world has become a much smaller

place, popularly called, a global village. This has also led to employees being inveigled towards

monetarily better jobs and those offering additional perks and benefits. Companies face stiff

competition for experienced and valued people, making it tougher for the human resources

personnel to attract and retain meaningful human capital. Therefore, by using innovation,

experience and studying employee turnover patterns and causes, over time, human resource

workers have developed strategies for retaining their employees, to be able to facilitate the

company in achieving its strategic goals. This essay will focus on the programs developed by the

department to develop and retain talent to maximize return on their investment, and, the efficacy

of such programs.

Facing this challenge, the primary focus of human resources workers, in this direction has

been, to deal with the most common cause of turnover seen among employees. According to,

The Centre for Association Leadership, an association working in 50 countries, helping 10,000

organizations across the globe, to develop and empower their people with leadership skills; there

are seven major reasons leading to employee turnover (ASAE,2011). Unexpected kind of work

being offered, unclear understanding of the job responsibilities, wrong people landing into wrong

jobs, little coaching and feedback given, lack of growth opportunities, not been given enough

appreciation, work-life imbalance and lack of trust in senior managers are the reasons that

dishearten an employee, forcing them to quit (ASAE,2011). But, Ira Wolfe summarizes, that

most of these causes point towards inability of human resources workers to manage human

capital well (Wolfe, 2013).

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Therefore, the problem statement is defined, guiding the human resources staff towards

multifarious solutions available, but, the challenge is to be able to use the right kind of medicine

for the right disease, implying, different strategies have to be used for different people. For

instance, it has been noticed that employees belonging to generation Y or the millennials, have a

shorter attention span and always look for experience fulfillment. There is a team mentality that

drives them as they are unable to take decisions on their own. Being reality-oriented, they

become good volunteers showing sensitivity towards humanity and prefer to innovate instead of

following the 'laid down rules'. On the other hand, employees belonging to generation X and the

baby boomers, need to have better salaries and benefits as they have family responsibilities and

feel the effect of inflation, heavily on their pockets. Generation X people also need sense of

autonomy, are self reliant, constantly endeavor to improve their skills set and they are the ones,

who tend to be less loyal towards organizations. Therefore, human resource workers have to

develop growth and skill development plans addressing each employees' issues differently, while

benefitting maximum from the loyalty, motivation and competitiveness of baby boomers; sound

technical knowledge of value honoring and independent generation X and, also, exploiting the

volatility of the millennials.

As a matter of fact, in most organizations, the commonly used retention method and a

performance management style, suitable to all types of workers due to its rationality, is, looking

at the job from an employee's perspective. Because of a variety of human attitudes and

behaviors; in many corporations, employees are asked to write down their own specific,

measurable, attainable, realistic and timed goals and then the human resources people work with

them to decide a path to tread on, so that, their goals are made congruent with those of the

company and that there is a mutual benefit. Advice from specialists in the field can be sought to

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make it achievable. This procedure is recorded and then after the time period mentioned in the

discussion, their success or shortcomings are evaluated and the lapses addressed. Then, guidance

for working on those points is provided which can be done through a counselor, a human

resources worker, external trainers or through workshops for common benefit. This way, the

employee feels wanted, valued and so, becomes loyal to the company. Here, the key skill that a

human resources worker must exhibit, is, to be polite and to advise instead of reprimand or

castigate, to develop the employee.

It follows that to be able to retain employees, the HR workers must employ practices that

keep the employees interested, upgrade their skills, develop them as a person and keep them

involved. The common areas that they look at are, right recruitment, emphasizing on

socialization and involvement, correct orientation on joining as well as for career development,

meticulous training, congruous compensation, felicitous rewards and punctilious retention

bonuses which act as golden handcuffs for important pillars of the organization. The idea is to

work with the employees rather than getting work done from them; to talk with them, instead of

talking at them.

Due to the fact that different strategies for different people have to thought of, there are a

number of skills that human resources professionals need to possess. Besides being an expert in

human relations, they are expected to have sound knowledge of the type of business the

organization does, the technology involved, the economics and demographics of the business and

the ability to align human resources strategy with the business strategy of the company (Ulrich

and Brockbank,2005) and (Story,2007). This requires a lot of understanding of the administrative

processes and considerable management capability. The skill set also includes the ability to

research and make connections and network, in order to get an insight into the market practices

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being used for talent development and retention of employees. Talent management, foresight for

succession planning, ability to make people friendly policies, working with individuals for career

development, instilling confidence among employees and gaining their trust in the organization's

principles also involves them.

Likewise, valuing ethics, building a sense of accountability and accuracy and inspiring

people towards putting in their best efforts, also forms a part of the human resources employee's

competencies (Aswegen and Engelbrecht,2009). As a relationship manager, they are expected to

develop and work with multidisciplinary and transdisciplinary teams and establishing service

level agreements with people. An efficient human resources professional will build positive

internal relations, develop open communication systems, motivate staff and respect diversity in

their cultures. Further, decision making capability, planning well ahead of time and having a

backup plan to confront failure, are also some prerequisites.

In addition to having all these skills, it is important to focus on the reasons of employee

turnover. According to Society for Human Resources Management, the top 10 retention

initiatives, though overlapping in most cases, that worked for companies in 2008, were-62%

were able to retain employees with increase in salary adjusted according to market standards,

60% attracted them by paying hiring bonus, 49% allowed flexible work schedules, casual

dresses, and telecommunication or work-from-home option (SHRM, 2008). Further, 28%

companies offered a retention bonus, 27% organizations developed career plans for employees,

22% included special on-job training and education opportunities, 19% made stock options the

carrot and 15% honored their employees with project milestone bonus (SHRM,2008).

However, thinking of withholding employees, the first pragmatic approach is to recruit

wisely by providing a realistic job preview expanding on the positive job characteristics and the

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real challenges that the prospective employees may face. Using bio data questionnaires,

leveraged through weighted application blanks, which is, giving weightage to answers written by

candidates is the routine recruitment process employed by bigger corporations. Weighted

application blanks are useful particularly for sales and technical jobs and are good predictors of

turnover (SHRM, 2011). Texas Instruments analyzes a Fit Check Tool to determine job

compatibility during recruitment process (SHRM,2011).

Similarly, the compensation and rewards system should demonstrate employee value

proposition-a package of extrinsic and intrinsic rewards, provided in exchange of joining,

performing and remaining in an organization (UTHealth, 2013). This makes the employee

remain rooted to the organization. Here, justice and fairness in the reward system matters a lot

and human resources manager should be able to give rewards germane to employees'

performance in consultation with department managers.

Further, significance of a supervisor's accountability for retention cannot be undermined.

There is usually zero tolerance for abusive managers who are trained towards building positive

relations with their teams (OANHSS,2012). A smart human resources professional would use the

technique of job shadowing, that is enabling a new employee to learn all the skills and

techniques, that an ideal person, or a manager has, by following him like a shadow, and hence

learning every aspect of his job. This, in turn puts a responsibility on the manager to train that

person and thus be accountable for him. This is similar to developing mentorship and reviewing

progress. A noteworthy point is that a mentor should be a good listener, should maintain

confidentiality, and be able to give practical solutions (SHRM,2011). A mentor can be found

within an organization or mentee's department or even outside (SHRM,2011).

Additionally, drivers of turnover in women, minorities and generation Y have to be

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tackled differently. The common drivers identified among these classes are, sexual harassment,

pay inequity, supervisor bias and uninteresting jobs. Whereas sexual harassment at job and pay

inequity fall under human rights' violation, and have to be looked into seriously; supervisor bias,

uninteresting jobs, unsupportive workers and performance pressures are relatively easily

manageable. Supervisor bias can be dealt with counseling and training of the employee and the

supervisor; uninteresting jobs can be made more meaningful by job enrichment and job

enlargement, nurturing job satisfaction. Socialization and opportunities to network through inter-

departmental interaction, open communication and staff motivation can solve problems arising

due to unsupportive workers (SHRM,2011). Organizations may be able to retain important

women employees by providing flexibility, in terms of alternate work arrangements to them.

Working-from-home, telecommuting, doing part time work, job sharing and having a

compressed work week are some options. Offering them maternity and child care leave could

prove really helpful. These methods would make them loyal employees, as they would be able to

handle their domestic responsibilities equally well. But, the onus of proving oneself responsible

enough for delivering, in such a setting, lies on the employee.

Conversely though, there are different strategies to be applied for keeping the millennials

interested in an organization. According to Valerie Grillo, chief diversity officer of American

Express, as generation Y candidates join the businesses, strategies will have to be made flexible

to suit them (Koster,2013). As they do not tend to have a linear career path and do not believe in

social security, so, they are not impressed by the usual training and development techniques or

lecture and seminar style of coaching (Koster,2013). They tend to try new things and innovate,

which is what they demand from an organization too. In these cases, reverse mentoring is

effective, which means, using the potential of younger generations Y and Z to teach skills to

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employees from baby boomer population (Koster,2013). This is what satisfies the youngsters, as

their soft skills make them stand out (Koster,2013).

Likewise, another retention strategy called skill based pay, is particularly useful at the

executive level. It is a compensation system rewarding employees with additional pay for formal

certifications demonstrating their skills. Whereas, the type of skills, knowledge and competency

are measured on one hand, the depth and breadth of the skills are also taken, on the other.

Towers Perrin study of more than 600 managers in 21 countries showed that in 27% of cases,

salary increase was contingent on competencies demonstrated by the executives (Ledford and

Henema,2011). Companies, in fact, provide bonuses to the range of $10,000 up to $ 40,000 in

exceptional cases, to employees, just for enlistment and re-enlistment on the list of people

qualifying for skill based pay (US Military, as in, SHRM, Ledford and Henema,2011). To

encourage the idea of this strategy, however, it is important to introduce employees to methods

like job rotation and cross training, as resources for gaining understanding of the required

processes. The key is to incite employees for development of skills by reminding them of job

security, promotion opportunities and most importantly, to communicate to the employees that

the intent of training is not to replace them (Mayhew,2012).

By the same token, HR workers can manage talent at the worker level, to a great extent

by recognition of employees, for instance, by having a Hall of Fame put up, pronouncing

employee of the month and arranging time for a team presentation of their accomplishments to a

senior manager. This can have an encouraging, enabling and empowering effect on people to

excel (John Hopkins University,2010).

Over the years , the importance of on-job training and development of employees, has

emerged as a significant food for thought for the human resources professionals. As retention

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strategies are different for different people, so are the training and development needs. While

common training methods like classroom training, web based methods and using job aids like

pictures, graphs, charts and algorithms are popular and inexpensive; structured training and

interactive discussions encourage instantaneous feedbacks from employees (Pulakos,2004). In

bigger corporations with thousands of employees, hotlines for new employees answer questions

immediately, making them feel valued and involved (Pulakos,2004). The advantage of web

based training is that the learners learn at their own pace and so, it is convenient (Pulakos,2004).

Next, the job specific training and development programs should focus on potential

growth opportunities and should attract employees, by rationalizing that their skill development

will be facilitated. For instance, University of Texas offers reimbursement and time off for job-

related training and education (UTHealth, 2013). However, most employers ask for a

commitment from the employees to work for at least a stipulated time for the same company,

before they are given this benefit (UTHealth, 2013). Their human resources department

encourages eligible employees to apply under the program unraveling the potential benefits that

they might miss by losing the opportunity (UTHealth, 2013). Other organizations may facilitate

employee education by contributing towards tuition fees from the beginning.

In addition, inviting professional organizations to conduct workshops on time

management, leadership skill development, conflict management, writing minutes of meetings

and so on; are also extremely useful as they provide hands on training and employees can

immediately make use of it (UBC,2013). People Smart Tools is a professional organization, with

25 years of experience of working with human resources departments of organizations to

develop different skills among employees. They particularly train managers to get the jobs done

through effective communication and without seemingly bossing around.

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Keeping in line with the above, some training and development programs, companies

use to accelerate growth of their employees, are, communication skills development like

assertiveness training for businessmen, salesmen, managers and women employees (American

Management Association,2013). Business writing skills like, business and technical writing for

usual and multilingual professionals, administrative and business grammar workshops (American

Management Association,2013). Training is also encouraged for developing interpersonal skills,

to be able to get work done with diplomacy, tact and credibility. Negotiation skills, managing

emotions and technique of using emotions positively is also taught (American Management

Association,2013). For executives, public speaking, presentation skills, technique of making an

impact and getting things done without use of authority is encouraged (American Management

Association,2013). Institutions like Alliance, American Management Association and The

Sergay Group Ltd. provide onsite seminars and workshops and when organized, HR managers

encourage employees to attend them. For instance, the testimonials of people from Pepsi

America and Edward Jones justify their company's association with The Sergay Group for

employee development and training (The Sergay Group Ltd,2011).

In contrast to the above example of external training, there is an example of internal

training at Coca Cola Company. The 70 20 10 philosophy of The Coca Cola Company, which

means 10% of the employee development comes from formal learning, 20% comes through

feedback and coaching and 70% comes from on-job or internal training ; explains this (Coca

Cola Enterprises, 2013). Many organizations take advantage of educational institutions' services

for training like American Planning Association, that organizes conferences about application of

Geographic Information Systems. The Watershed Academy has been developed by United States

Environmental Protection Agency for imparting training. American Society of Training and

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Development that oversees training aspects of organizations is also popular among the corporate

world and so is, The International City and County Management Association that focuses on

management related training for the local government (ASTD, 2007). Lead Academy, founded

by the East Bay Municipal Utility District is another educational institution run by a government

organization, frequently approached for training (Sykes,2008). The British Columbia Institute of

Technology offers many customized and common programs to upgrade the existing skills of

employees. These include one-day workshops on MS Word, Excel and Access; and two-week

courses on web designing and MS Office and so on.

Also, besides the above stated methods, training can be conducted by having in house

seminars, presentations, transfers, lateral moves and webinars (Heathfield, 2013). The essential

point to consider, for HR person, is that employees need motivation even for getting trained

which points towards importance of brown bag lunches or lunch and learn strategy (Heathfield,

2013). Educating employees about work-life balance, taking care of their health benefits and

providing concierge services for routine work like bill payments, installment deposition and so

on, can also be thoughtful, efficient and inexpensive ways of employee retention.

In the same way, workers' confidence can also be gained by training them on their safety

while on the job, for example, usage of fire extinguishers to industrial workers, training on

material safety data sheet, emergency procedures, training one in a group about cardio

pulmonary resuscitation maneuver and following guidelines by Workplace Hazardous Materials

Information System and Occupational Health and Safety standards (Worksafe,2012). Supervisors

should be given a checklist and be informed about accountability (Worksafe,2012).

However, evaluating the training outcome as well as the efficiency of the retention

strategies. Honest and effective feedback after evaluation minimizes defensiveness on the

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employee's part. According to Louise Goeser, vice president of quality department, at Ford, there

are four major variables to determine the effects of training are reaction, learning, application

and eventually retention (Smith, 2003). For example, if a manager is given training for

leadership skills, initially, the human resources worker would evaluate the attitude, willingness

and openness of the employee during the training. Whether enough was learnt or not can be

evaluated by a feedback from team members and subordinates; and their ability to put learnt

skills into action can be judged in delegation of future assignments and their results. Hence, in

this way the lack of skill which used to be a stumbling block for the manager, leading into being

a turnover drive, can be evaluated. If now the manager is generally, seemingly happy and

satisfied with the team's work, the goal is accomplished and the training was useful. Giving

examples from Ford, he stated that with inception of 6-sigma training approach, the company has

saved $One billion annually, across the globe, with regard to waste elimination (Smith, 2003).

More than satisfied with its progress, Ford now has 200 master black belts, 2,200 black belts and

40,000 green belts in different areas of expertise (Smith, 2003). The company is now looking at

getting at least a green belt for the process, for all its employees (Smith, 2003).

The best evaluation process to measure the effectiveness of the retention programs is,

probably the employee turnover rate and job satisfaction surveys. This means, answering the

question from where the problem was defined initially, as employees, if satisfied would not leave

and continue to perform well and be an asset to the organization. If the human resources have

solved all the major seven issues listed in the beginning, and counseled the employees well, there

should not be a rationale for employees to leave. For example, at Ford Motors, they take a Pulse

survey, every year to measure employee satisfaction. The survey measures 53 items, 8 of which

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contribute towards employee satisfaction index. In 2011, the favorable response rate was 69%, a

point above from that of 2010 (Ford Sustainability, 2012).

To make this point more clear, a practical life illustration of the effects of retention

programs can be seen at Ford Motor Company (Hickman,2013). According to John Roberts,

director of HR department, Ford Retail group dealership, UK; staff retention rates at Ford Motors

are at 85% and employee satisfaction has grown from 45% to 61% from 2007 to 2013

(Hickman,2013). The success mantra was, defining awards in a detailed way by grading them

(Hickman,2013). Earlier, rewards were given arbitrarily; but during his leadership, a project was

launched to review pay structures and then they were graded into 9 types , now reduced to 8

(Hickman,2013). Earlier the pay drift was nearly 5% which was brought down to 1% by these

endeavors (Hickman,2013). Roberts also made sure that the salaries and rewards were

comparative to existing market practices which was also a loophole earlier (Hickman,2013).

Benefits were increased from mere pension and insurance to healthcare which is expensive in

Britain (Hickman,2013). Next, employees were brought to agree to part with a part of their salary

for certain benefits which were otherwise expensive, saving them GBP 750,000 a year. The

added benefits, were, amusement park discounts, giving choice to employees to purchase their

own computers by sacrificing a part of salary, and allowing each one to have a unique website

through auto-enrollment, where every employee could manage their benefits and pensions

(Hickman,2013). The online system used by Ford Retails, is designed to monitor age-related

behaviors, if any, as generation Z joins the working class (Hickman,2013). Overall, Roberts has

been able to add GBP 2.5 million a year into working capital and has nailed savings upto GBP

1.25 million per year; in addition to making employees happier, more satisfied and retained by

working around 'compensation and benefits' (Hickman,2013).

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In conclusion, a human resources professional must have a clear understanding of the

precedence of attaining and retaining valuable human capital and apply valid, result oriented

retention strategies, effectively, to preserve the organizations investment-their employees. If

these habits become consuetude, for the human resources professionals, a great contribution can

be made by the department, towards building a stronger and an empowered workforce and thus,

an organization's strategic goals can be attained.

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Employee Retention- Grading Rubric - Final Assignment

Skills Possible points

1. HR skills and competencies 5/52. HR programs for staff to develop

competencies 5/2

3. Programs and partnerships between HR and educational vendors and/or institutions

2/2

4. What evaluation process best measures effectiveness of programs

2/2

5. Demonstrate the evaluation process within your presentation

2/2

6. Use an example to illustrate the evaluation process

2/2

7. Use five APA peer reviewed articles 5/5

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8. Essay/Lecture or Power Point 5/5Copy received by professor

Hello Manus,You are writing at a level that is rare for any individual for whom English is a second language. Generally speaking, you write as a level that could be on par with the native English speaker. This is a huge testament to your persistence for excellence. You have a good discussion developed more than ample resources to support your argument and you approach the concept of retention from various theories. You should be very proud of your work. I wish you all the best in the future.

Total 25/25