HR Remedy News

HR Focus Efficiency and Effectiveness

January 12th, 2010

Author Jessica Nelson, Managing Partner, HR Remedy, LLC

Human resource functions have come a long way from the “personnel department” of decades past, whose primary role was, in many instances, to hire and fire employees, administer pay and benefits plans and in industrial environments, keep union issues at bay.

HR, as a function, has clearly evolved. In today’s environment, that evolution continues as companies are faced with business realities such as margin tightening, organizational restructuring, global expansion, a competitive talent market, and a more mobile workforce. Many organizations are re-examining the structure of their HR functions and how they deliver service to the organization. So, while HR is clearly viewed in a much more strategic context, we see an increasing focus by our clients on improving the effectiveness of how HR services are delivered. In today’s challenging business environment, it is important for HR to deliver strategic value while also delivering these services in a cost effective and efficient manner.

To add value to the organization and its employees, HR must focus less on what it “does” and more on what it “delivers.”

Focus on Effectiveness
In order to devote more hours to value-added planning and consulting activities, HR leaders are using a variety of tactics to reduce the time and effort spent on routine tasks and administrative services. This is being achieved in ways such as:

• New HR service delivery models
• New technology
• Process improvements
• A variety of outsourcing approaches
• New HR service metrics
• Developing HR talent with business insight

Many will agree that a value-generating HR function concentrates on outcomes and results that promote organizational effectiveness. By focusing on effectiveness, HR professionals measure how their work enhances:

• Strategy execution
• Business and HR efficiency
• Commitment and productivity of employees
• Organizational capacity for continuous learning and change

Focus on Efficiency
While the quest for effectiveness is critical, it is equally important that many organizations simultaneously need to focus on increased efficiency. This is based on the premise that an HR function will create business value via two primary drivers:

1. The allocation of scarce HR resources. How dollars and people are allocated to HR activities should reflect the business activities that create a competitive advantage. For example, many organizations devote too many resources (both in terms of dollars and employees) to developing training and development programs that do not create any type of distinct competitive advantage. If these programs are developed simply to comply with regulations or to offer the organization liability protection in the case of a lawsuit, then why not spend less on an outsourced solution and/or an off-the-shelf program?
If HR succeeds in smarter resource allocation, it follows that the group will operate more efficiently and will deliver far greater value. In fact, anecdotal evidence suggests that high-performing organizations may spend as much as 25% less on HR while delivering greater value.

2. Providing insights into how employees create value Employees contribute to company success in a variety of ways. The formula for success is efficient work processes and wise utilization of investments combined with the right kind of employees: skilled, productive, and cost effective. The specifics of this formula vary with the types of business activities and whether the focus of the activity is value creation, effectiveness, or efficiency. One size does not fit all. HR practitioners must have the business savvy and insight to develop a balance of standardized and customized services that deliver the most value.

Summary: Do Both

Our perspective is that both efficiency and effectiveness are required for an HR department or organization to provide value. Equally important, is understanding how to make this value “real” in your organization, as both sides of this coin will potentially require different actions. The end result is an HR organization in step with the times that the company executives turn to for advice, guidance and strategic decision-making.

Jessica Nelson is the Managing Partner at HR Remedy, LLC. HR Remedy is a human capital consulting firm that works with our clients to attract, retain and develop their talent. HR Remedy takes a pragmatic and practical approach to helping companies manage their human capital. For additional information regarding HR Remedy and their services please contact Jessica Nelson. You can reach Jessica by contacting her at jessica@yourhrremedy.com or 281-528-1266 or visit our website at www.yourhrremedy.com.

Internal HR Marketing – Winning Hearts and Minds Through Workforce Engagement

December 24th, 2009

In every organization HR is continuously working with the company’s most important assets while also trying to support the overall business. HR strives to be a strategic partner to the business.  This requires two things: 1) Running the HR group efficiently, and 2) Viewing the business leaders as your customers.  As with any service provider, HR’s role is often to provide a high level of service, to “market” their services to business leaders, and to add value to the company’s bottom line. Business leaders will struggle to realize the true value of its HR group unless it can add value and bring an ROI to the business. The question becomes, “How does HR continue to transform itself to provide a return and exceed their efficiency and effectiveness targets?” One clear way to market HR’s role within the organization and show a significant ROI is through employee engagement and retention programs.

Many organizations are chasing the wrong problem.

Instead of focusing more of their efforts on keeping the talent they have, they often spend too much time and money finding talent from the outside. Depending on which source you cite, employee turnover will cost your organization anywhere from 1 to 5 times the cost of their salary and benefits.  Given that we can agree it is always cheaper to keep your existing workforce than it is to replace it, what can be done to improve retention?

Employee engagement and retention depend on a number of factors; and, in some instances, a reasonable level of voluntary turnover is desirable. In fact, there may be a need to effectively and systematically assess whether your current workforce can take your strategy forward. But, if your current talent can implement the organization’s goals and strategies, then a well thought out program to address workforce engagement and retention (assuming it is also integrated with the rest of your talent management initiatives) is likely to pay for itself many times over.

Let’s not forget that there can often be knee-jerk reactions to retention problems.  They can be desperate and often involve throwing money at people when dollars are not the underlying driver of dissatisfaction. Many short-term reactions and quick fixes do not work.  In fact, such reactions may be very costly, cause greater discontent and still not result in true engagement.

What do we mean when we talk about workforce engagement?

Engagement comes when your workforce feels committed to your organization. Such engagement has to be more than just loyalty to the organization as demonstrated by showing up each day. It has to be a willingness to go above and beyond, and a feeling both that the organization is something special and that employee’s individual contributions are valued.

Getting that kind of engagement depends on the complex interplay of many factors that are ideally measured and analyzed through a specifically designed employee survey. If you can isolate those factors, you can better determine what pressure points matter to your people.

Those pressure points can be issues such as:

  • Career development opportunities
  • Trust in leadership
  • Rewards and recognition
  • Organization and staffing levels
  • Work/life balance

Identifying these pressure points will drive the direction of HR programs and processes you need to have in place to influence those issues.

As you compare the list of engagement issues to your HR policies and practices you should aim to answer the following questions:

  • What are we doing right that we need to continue to do well?
  • What are we not doing that is conspicuous by its absence to people?
  • What are we doing that has little effect on commitment? i.e. why are we spending time and money on this?

Simply coming up with a long list of action items to address these issues is not going to guarantee that your workforce will be any more engaged. For example, if—as part of a Pay-For-Performance initiative—a better annual pay review process is implemented, but the corresponding performance evaluation process does not measure the right things, engagement is likely to remain minimal.

What is needed is a comprehensive and integrated talent management plan that:

  • Defines the skills and behaviors required by the organization
  • Identifies where those skills currently reside and where the gaps are
  • Creates a continuous learning environment to fill the skills gaps through leadership development, stretch assignments and other development opportunities
  • Recruits those critical skills that cannot be provided internally from outside the organization
  • Supports a metrics driven culture that rewards people for developing and exhibiting the required skills and behaviors, and
  • Encourages communication and dialogue between leadership and the workforce

However, the single most important success factor is that leadership is firmly on-board both with the need for workforce engagement and the talent management plan that will deliver it.

In summary, the key conclusions about employee engagement are as follows:

  • It is easier and less expensive to re-recruit your existing workforce than it is to replace it.
  • By measuring employee engagement and understanding what drives it, you will uncover what HR programs should be implemented or re-worked.
  • Optimum engagement is most likely to be achieved when all your HR activities are integrated via a comprehensive talent management plan.

In the final analysis, the true benefit of workforce engagement and employee retention is not reduced recruiting costs. It is the increased productivity and morale brought about by a workforce that has faith in the organization’s future and its role in it.

Jessica Nelson is the Managing Partner at HR Remedy, LLC. HR Remedy is a human capital consulting firm that works with our clients to attract, retain and develop their talent. HR Remedy takes a pragmatic and practical approach to helping companies manage their human capital. You can reach Jessica by contacting her at jessica@yourhrremedy.com or 281-528-1266 or visit their website at www.yourhrremedy.com.

Getting Your Leadership Style on the Right Path to Successful Employee Engagement

December 24th, 2009

For every leader, at some point in their career, they will ask themselves the question, “What am I doing to properly engage my employees?” If you aren’t sure, the answer is probably “not enough”.  For many leaders, proper employee engagement gets lost in the day-to-day tensions of making vital decisions and putting out fires.  But should employee engagement be ignored?  Not if you value profitability, employee retention and productivity it shouldn’t.  We’ve all seen the stats on employee engagement…and if you haven’t, the numbers may be startling. According to a recent survey of U.S. workers conducted by the Gallup Management Journal, 76% of employees surveyed admit to being under-engaged and in times of economic stress, keeping your employees engaged becomes even more difficult and extremely important to a company’s success.  Here are some key indicators to determine if your employee engagement plan is on the right track:

Does my leadership style promote active feedback?

Is the leadership style of my organization relationship based?

Can my employees trust their Senior Leadership Team?

Does my organization breed a culture of development and innovation?

Do I take pride in my organization’s accomplishments and do I relay that pride to my employees?

Do my employees have an incentive to directly promote company success?

Are my employees emotionally connected to company success?

Are my employees rewarded for their innovative ideas and contributions?

If you answered “no” or if you are not sure how to answer any of these questions, then most likely, you aren’t doing enough to ensure your employees are fully engaged and that could be costing you valuable time and money.  So you may be asking yourself “how do I get my engagement plan on the right track?”  The first place to look is your organization’s leadership style.  If you are promoting a culture of company pride, development and recognition, chances are, you are on the right path.  The key is, to get your employees emotionally engaged in the success of your company and in turn, develop rewards and recognition for doing so.  Let’s face it, without incentives, your employees don’t have much motivation to get fired up about what they are doing.

The bottom line is, under-engaged employees are expensive and in some circumstances, may be directly undermining the success of your organization.  By understanding existing leadership style and the benefits of highly engaged employees, companies can achieve higher productivity and customer satisfaction, and in the world of business, that spells profitability.

Workforce Planning Insights Article

December 24th, 2009

Plan Now: Five Steps to Workforce Planning

Starting in 2011, the first wave of Baby Boomers will reach the conventional retirement age of 65, yet many companies still do not know the impact such turnover and retirement will have on the workforce or their businesses.

Workforce planning, by definition, is not new. Most companies have compiled labor data to determine what types of jobs and skills will be needed down the road and how workforce estimates compare to those needs. But in today’s highly competitive business environment where maintaining an agile, fully-staffed workforce is more difficult, workforce planning can be a valuable tool in finding the right people with the right skills now — and in the future — particularly in industries where shortages of skilled workers are common. It can also help organizations decide where to build or relocate, how to train current employees, and whether certain aspects of the business should be outsourced.

Start small, but start now

Despite the benefits workforce planning offers, many companies shy away from it because they feel it is too time-consuming, too costly, or too data-intensive. A recent study from the Society for Human Resource Management confirms this. Although aging employees and shortages of skilled workers are major concerns, only 33 percent of respondents charted their organization’s demographic make-up, and only 31 percent have determined future retirement rates. Companies that remain reactive and do not undertake any planning run the risk of incurring talent shortages that can significantly impair their ability to remain competitive.

Workforce planning does not have to be complicated or expensive, just focused and systematic. Actually, it can be more effective if done in small steps with a focus on a few critical areas of the business rather than as a massive project. Here are five steps companies can take to get started:

1. Start with your business needs. Map your people strategy against your business needs in a timeframe that makes sense, which for many businesses might be in increments of one, three and five years.

2. Inventory your workforce. Determine who will be eligible for retirement over the next five years and chart the void in skills and knowledge that will leave with them.

3. Survey your aging workforce. If you want to keep either most or some of the people of retirement age, seek to understand their wants and needs now.

4. Boost your retention efforts now. If you haven’t done so already, check the level of your employees’ “commitment quotient.” Many companies conduct an annual survey that asks employees to anonymously respond about their motivations for staying or leaving.

5. Hire for the future. Revisit your succession planning, career management and high potential programs for their ability to retain the next generation of workers.

A systemic approach to workforce planning will enable your organization to assess supply and demand, identify gaps and then develop action steps to fill those gaps. The end result is the ability to re-align talent for future growth so you get the right talent in the right place at the right time.