Not Your Dad's HR – Strategy for the New School

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An effective Human Resources Strategy can transform an organization's direction. Blending solid business sense with an understanding of organizational structure, performance management and recruiting and retention methods will outclass and outpace the competition every time. Recent studies bear witness to what HR professionals have always understood: businesses that align their HR plans with their organizational goals lead with an edge. Your company's ability to attract, manage and retain a productive workforce will require sustained effort and intelligent design. We're in a new age. Do you have a plan in place? Welcome to the new school. We've saved you a seat.

Let's look at the landscape. Here are the most significant factors that will impact how organizations manage the human element of their business plan.

• The Long Goodbye: For the first time in U.S. history, the largest demographic of the population will begin to exit the workforce and move into retirement. By 2008, the available employee to job opening ratio will reflect a significant deficit. This is not a trend. This is a market reality that will continue on into the next decade.
• Embracing Tech: Advances in technology have changed the work environment from a 9 to 5 work day to a 24/7 marathon. As standard turnaround times for deliverables continue to accelerate, organizations that want to compete will need to adopt new technology and hire tech savvy employees to run it.
• Learn or Lose: North America has shifted from a manufacturing giant to a service industry leader. Increasingly, we find ourselves in a knowledge economy. In order to compete in a knowledge economy, businesses must truly be able to "work smarter, not harder." Say hello to organizational learning and training as standard operating procedure.
• Emotional I.Q. Muscle: The cost of replacing a current employee is averaging between one and three times that person's annual salary. The number one reason employees leave organizations is their relationship (or lack thereof) with their immediate supervisor. Companies that invest in management skills training have better bottom line figures. You do the math.
• It IS the Money: Make no mistake about it: money talks. As competition for talent increases, organizations will need to take a close look at market compensation data and make sure they are playing ball in the real world.
• They Want Choices: Benefit costs are rising at a phenomenal rate. The ability to provide competitive benefits that attract workers, reflect current lifestyles and still contain overhead costs requires a balancing act the previous generation never imagined. Creativity and flexibility are two tools that will be needed as you craft your employee benefits structure.

Sounds overwhelming, but it doesn't have to be. While there are significant factors that will impact how businesses manage human capital in the coming years, a Human Resources Strategy can be broken down into manageable components. Let's start at the beginning.

1. Analyze your organization's structure. Study your company's organizational chart with a critical eye. Make sure the positions displayed on the chart are still relevant to your business. Do some positions/skill sets need to be updated? Will anyone be retiring in the next five years? Is every position currently filled by a competent employee that does that job well? If they work for you, and they aren't performing well, is there a position better suited for that employee?

2. Develop a succession plan. Your Company should have a main succession plan in place that addresses how key positions will be filled if individuals terminate, retire or become disabled. Not attending to this important strategy is like driving without insurance. (Sooner or later an incident will occur and you will be left without resources.) Take a hard look at the employees who represent possible replacements for the key positions in your organization. What kind of training do they need? Are they familiar with the duties that they may inherit? If you do not have employees who can be career tracked into your company's key areas, all the more reason to begin crafting a plan today.

3. Make each hire a strategic fit for your business. Employees should be hired and promoted into roles that match their talents. Ignore this fact and you lose on many levels. Before you go to market to fill a vacant position, take the time to evaluate the position and develop a list of competencies that are necessary to succeed in that particular job. Take a long view approach. Invest the time and effort required to find and hire the person "best suited" for the job. Don't rush to fill the position and gamble on the outcome.

4. Reward learning. Create a culture that rewards learning new skills. Employees that keep up-to-date in their respective fields must read journals, attend seminars and determine what training they need to hone their skills. Make this as painless as possible for them and offer incentives. Your organization will gain the reputation of being committed to organizational learning while benefiting from the increased intellectual capital.

5. School your managers. Line managers are now expected to coach, motivate, counsel and develop employees. All too often, managers are allowed to "evolve into" rather than actively train for this important role. How many of your managers would you describe as gifted in interpersonal relationships? Develop a policy for management training. You cannot afford to retain managers who do not have the skills necessary to effectively manage your workforce.

6. Adopt a performance management system. An employee performance management system is an investment in the future of your company. Assessing performance on a regular basis will clearly determine which employees are capable of greater contributions. All employees should be aware of the expectations that define and measure their performance. Managing the individual accountability around those expectations will provide you with employees that can play a role in your company's success.

7. Influence high achievers with merit/performance based pay. If you are fortunate enough to have some superstars working for you, keep their loyalty and enthusiasm fresh with a merit or performance based pay system. (Remember, your competition is as interested in the best and brightest as you are.) An employee who continuously delivers more value should be paid in a way that acknowledges that extra effort and/or talent. If you want the high achievers to continue to contribute to your organization, you will need to pay them more than an average performer.

8. Build a work environment that supports employees. Your competition may already have put some of these initiatives in place. Companies that offer real-world solutions to the everyday challenges that employees now face are ahead of the game. Some of the choices that companies are now offering today's workforce: flexible work start/end times, compressed work weeks, telecommuting, personal days to attend to child or elder care responsibilities, and cafeteria style benefits that match individual needs. Flexible options of this type are becoming a common feature in an employee retention culture.

Develop the strategies now that will align your current HR needs with your long-term organizational goals. The new school is here. Do your homework. Businesses that embrace the new curriculum will stay at the head of the class.

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Tandem Partners is an organizational consulting firm specializing in people strategies that drive business results. Businesses of all types seek our assistance with human resources strategies and organizational solutions. For more information on how to link your HR strategy with your long term business goals, please contact Melissa McDaniel at 301-662-2400 or via email at melissa@tandem-partners.com .

Copyright 2007 Tandem Partners

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