It’s almost 2009 and so we’re starting to see the “Best of 2008″ and the “What’s Ahead for 2009″ articles. One of the ‘what’s ahead’ articles I noticed today is of value for any and every HR leader, business leader, and business owner.
What are the key aspects that you as a business leader look at?
- How can I increase my [tag]revenue[/tag]?
- How can I decrease my costs?
- How can I minimize my risks and maximize my opportunities?
Of course there is more to it in the details, but that’s where you start. From a [tag]workforce design[/tag] perspective, I created the workforce life cycle to focus on the area of getting more profitability from the investment you put into your workforce. Many organizations view the workforce life cycle as “sign-on” to “sign-off.” This leaves out so much planning needed to be profitable.
What is needed?
Design
Creating a structure that ties to the goals of the organization. This sounds obvious and simplistic, but many organizations will design by function (operations, sales, marketing, etc) and then not realize the importance – and need – of designing by culture, cost, competency, and other factors. Thanks to work by the Gallup organization, and other groups, the idea of a “[tag]great workplace[/tag]” is no longer a concept but a reality in many organizations because they focus on design. And the [tag]profitability[/tag] and [tag]shareholder returns[/tag] prove the value of it.
Benchmarks
For all the years I have been in my profession, I have worked to find the key to how you can know if a person will be a top performer (I have found one of the best tools for this). Many organization will focus on improving their interviewing process (I did in the companies I worked for), when what is missing is a benchmark for the position being filled (whether by hiring, promoting, transfer, etc.). Would you design your products and services without standards and [tag]benchmarks[/tag] that are quantified and validated? Why not do the same thing for your people?
People
This is all about putting people in the right roles so you get [tag]top performance[/tag] from them, and they enjoy their work more. Michael Phelps is a great example of top performance with eight gold medals in swimming. Have you ever stopped to think why he didn’t play on the Olympic Water Polo team? That also requires great stamina and swimming ability — but it isn’t where he would have given his best performance. How many employees do you have who are ‘Michael Phelps’ but on the water polo team?
In the spirit of year-end lists, BNET has an article today with “Five HR Tips for 2009.” One of their tips:
Focus on productivity
Focus on your goal as HR professionals — to raise productivity by providing advice and training to help people become effective at work.
Sullivan even proposes changing the departmental name from HR or personnel (does anyone use this anymore?) to “workforce productivity”.
Develop metrics that measure productivity — the ratio of employee-related costs to output.
Identify any barriers to productivity and make sure managers have the proper training and advice to improve quickly.
Metrics
One thing I learned, and part of my model, is that no matter how well you design, how well you plan, and how well you execute, without the [tag]metrics[/tag] to show the progress it’s difficult to get back to those three questions of revenue, costs, and risks/opportunities. You need to understand and manage not only the data of the metric, but also the impact. Again, BNET points it out well:
Associate metrics with money
Your boss will want to see evidence that costs have gone down while revenue’s risen. That means understanding how to translate your financial reporting into a form that most directly translates into relevant financial facts.
Sullivan’s example: instead of simply reporting your turnover rate is six per cent, also explain that the cost of that turnover was £12.2m in lost productivity or revenue.
Another silver lining: HR can demonstrate the “hidden” costs of cutting the training budget too drastically.
What can you do?
Any HR leader, business leader, or business owner can apply these principles. It’s a matter of understanding where your organization is today and moving it to where you want it to be. It’s a matter of putting the right standards in place so your people deliver more gold medals because their in the right pool. It’s a matter of being able to quantify the results.
The choice is yours; which are you choosing?:
- Continue to spend hiring, training, and compensation dollars to get your current results, or
- Invest in a few key areas to increase revenue, decrease costs, minimize risks, and maximize opportunities.
