Stimulus Package More Than $...HR Changes Too

There have already been countless laundry lists published of the HR tasks generated by the new economic stimulus package. HR departments everywhere are scrambling to make the nuts and bolts changes needed to comply. Rather than focusing solely on the new tasks generated by the stimulus package it may be the perfect time to step back and look at the bigger HR picture and how your HR professionals can make a more significant contribution to the management team. The economic stimulus package is ultimately about jobs and a more viable economy. With so much on the table and at stake this may be the perfect opportunity for an HR stimulus as well.

The urgency of the current economic situation means we must move the conversation forward and make our HR professionals much more than masters of the HR task list. Your Human Resource professionals need to assume a far more critical role, strategic management partner. When the economy is good and things are humming smoothly it is easy to for companies to let HR to fall into the role of compliance cops or worse, the equivalent of the shovel and the dustpan at the end of the parade. HR has much more to offer and they will never face greater tests or have a better opportunity to demonstrate their skills, resources and capacity to be key members of the management team.

Business owners, managers and employees are all stakeholders in the economic recovery and it is time for all hands on deck. The moment has come to strip away the endless TV commentary and politics surrounding the Stimulus Package to focus on the day to day work we all must engage in. HR has long held that they deserve a seat at the management table and in the current business climate HR professionals will have a golden opportunity take a seat and assume a meaningful leadership role. This means you should expect your HR professionals must to forth innovative ideas on effective human capital deployment and employee engagement which will bolster business survivability and success. In short, they must demonstrate the ability to be less transactional and more transformational. Only then will HR become your strategic management partner.

Jason Corsello recently wrote an interesting piece on the Human Capitalist Blog summarizing some key points made by Tod Loofbourrow, Chairman of Authoria, when he spoke recently at the Strategic e-HR Conference. He was talking about HR executives that "get it" and laid out the first three qualities summarized below. Jason added the fourth point. These thought provoking ideas put forth by Tom Loofbourrow's and Jason Corsello are the perfect jumping off point to begin an HR stimulus conversation.

1. Business acumen. They have a true understanding of their own company, its business, the products and the industry it operates. Too many HR executives don't even know the products their company sells and at what price or margin.

2. Analytical mindset. They think in numbers not emotions. They leverage data to make decisions and measure their business proactively.

3. Accountability. They are willing to make hard, critical decisions independently and will to put their proverbial “ass on the line”. Accountability also means they have a favorable reputation within the organization and can garner support throughout.

4. They know what they don't know. This really means they know the right questions to ask and surround themselves with smart people, experts and knowledge.

And I would like to suggest another point for inclusion on the list:

5. They see HR as a fully vested member of the management team. They have a thorough understanding where HR fits in big picture of the management puzzle and understand why HR is vital to the success of the company.

So how do management and HR make such a dramatic shift and change the dynamic of HR as usual? In the next few months we will examine each of the areas on this list and discuss what owners, managers and HR professionals can do to more fully integrate HR into the management team.

Workforce Dynamics

The one constant in human resources is constant change. Employers and their human resources managers are continually challenged to respond to changes in what we call workforce dynamics. Gone are the days when people made permanent career choices at an early age and stuck with them until they received their guaranteed pension at 65. Just as businesses have been carried into the technology revolution they will also be swept into the workforce revolution.

Your People Professionals is in a unique position to track and evaluate the emergence of workforce trends and challenges. Serving as the human resource partner for hundreds of businesses and their employees over more than 20 years has given us the opportunity to constantly monitor changes in workforce dynamics and the impact on employers and employees.

This is the first in a series of articles on some of the most significant trends we see affecting workforce dynamics. Over the next several months we will give you brief summaries of some of the most compelling issues being evaluated by YPP's team of HR professionals. These brief issue introductions will culminate in the spring 2008 when YPP will host a Workforce Dynamics Seminar. We will bring business owners, CEO's and top level managers together to explore Workforce Dynamics and provide practical tools to better understand and capitalize on these challenges and opportunities.

We will begin the series with two of the major trends confronting managers, workforce fluidity and Generation Y.

Fluidity

If you are an employer dealing with workforce fluidity it may feel more like a very bumpy ride than a manageable employment trend. There was a time when employees were cautioned employers would view too many jobs or too many career changes on a resume as a serious negative. Often employees stayed at jobs just because they were afraid of looking like a job hopper.

Faced with the power of the Internet, fast-paced changes in technology, overseas outsourcing and a shrinking workforce, employees found themselves in uncharted territory. Many employees began viewing their careers from a new perspective. Not as a static choice to ride out to retirement but rather as a fluid ebb and flow with the opportunity to make adjustments as needed to best suit an employee's personal needs at different phases of their careers. These employee choices can leave employers coping with employees who do not hesitate to move on at the slightest provocation or when presented with even a marginally "better" opportunity. The advent of the internet means there is instant information access and entrepreneurial opportunities abound. Want to know what your counterpart in another city makes, or what benefits the company across town offers? Log on and chances are the information can be easily obtained.

Gone is the fear that too many jobs on a resume will doom employees to failure. On the contrary, some recruiters may view loyal and stable employees as too risk averse or likely to have dated skills. Every internet job search site abounds with articles encouraging employees to take charge of their careers and move on to better opportunities. Employees can even quit their jobs electronically, just go to http://www.iquit.com/ and someone will handle your resignation for you.

Challenging workforce dynamic for employers? Of course, but with some management savvy, employers can get ahead of the curve.

First, the obvious: make sure you offer salary and benefits in line with your local area and industry. Nothing guarantees constant turnover like below market wages and sub par benefits. It can be hard for employers to measure the real cost of high employee turnover, but factor in training time, customer service challenges, and recruiting expense and you will start to see your "salary savings" evaporate.

Second, no matter what the size, every business has a corporate culture. Make sure that you utilize every available tool to ensure that the employees you hire are a good "fit" for both the job and your organization. YPP recently introduced our innovative SmartSource Recruiting System to respond to marketplace conditions and employer needs. If you want improve your workforce stability you need to make the pre-hire investment to make sure the "fit" is right.

Over the next several newsletters leading to the Workforce Dynamics Seminar we will also explore some of the more creative employee perks and management strategies that can help stabilize your workforce.

Generation Y

We have all read the headlines about Generation Y moving into the workforce and the changes they will bring. Who are Gen Y workers? Definitions vary but essentially they are the more than 70 million Americans born from 1977 to 2002 and according to a recent USA Today article they are the fastest growing segment of the American workforce at nearly 32 million workers.

Watch out employers, Gen Y is rocking the workplace. These employees are often tech savvy, high performance and high maintenance. Often the product of a child centered household, they have a strong sense of their own self-worth and little tolerance for the status quo of business as usual. High tech isn't something new or challenging; it has always been part of their lives.

Y-ers are the first generation raised with the positive reinforcement and self-esteem building that became popular in parenting during their formative years. "Generation Y may need help with accepting constructive criticism and managing conflict," says Linda Gravett, senior partner of Cincinnati, OH-based HR consulting firm Gravett & Associates and co-author of "Bridging the Generation Gap" (Career Press, 2007).

Bruce Tulgan, of RainmakerThinking, considered one of the leading experts on Gen Y summarizes Gen Y workers as follows:
High Expectations of self: They aim to work faster and better than other workers.
High Expectations of Employers: They want fair and direct managers who are highly engaged in their professional development.
Ongoing Learning: They seek out creative challenges and view colleagues as vast resources form whom to gain knowledge.
Immediate Responsibility: They want to make an important impact on Day 1.
Goal-Oriented: They want small goals with tight deadlines so they can build ownership of tasks.

A recent survey conducted by careerbuilder.com in June of 2007, titled "Gen Y at Work", identified real generational gaps in communication styles and job expectations when they gathered data from more than 2,500 hiring managers and HR professionals across all industries. A startling 87% of all hiring managers and HR professionals say some or most Gen Y workers feels more entitled in terms of compensation, benefits and career advancement than older generations.

Another critical issue employers need to address when managing Gen Y workers is the concept of work-life balance. There is a much higher value placed on self-fulfillment. Corporate success at the expense of health, relationships, and quality of life just isn't their idea of what matters most. Career may be important but it does not define them or their self-worth.

There are a number of excellent books on emerging generational management issues. Managing Generation Y by Bruck Tulgan and Carolyn Martin is a good place to start if you are interested in a more in-depth exploration of this workforce dynamic. Gen Y will be a feature topic of YPP's Worforce Dynamics seminar next spring.

Next month we will discuss creative employee perks, sometimes called Lollipops, that employers are utilizing to help keep the talent they need to compete. We will also examine the other end of the employee spectrum, Older Workers and the expanded role they will play in the American workforce.

Effective Human Resources Planning

As we approach the end of the calendar year, many businesses are taking stock of 2007 - their successes, their failures, their strengths, and where they need to grow - so that they can prepare for 2008. Just as many other businesses are engaged in the day-to-day details of running a business, and are just trying to stay on top of the issues from today. Whether you fall into the first category or the second, or are trying to do both, strategic planning is an essential piece of moving your business beyond survival mode and into thriving and growth mode.

The first step for any business owner is to assemble your team of advisors. Most people start businesses because they have an interest or skill in that particular field or see a need to be met, not because they really want to meet the many stringent laws and regulations that govern business in California. However, as a business owner, you do inevitably find yourself having to face those issues, and the competition for your time begins. Do you spend your time growing your business? Or do you spend your time making sure you're in compliance and trying to be all things to all people?

The successful business owners who have moved their businesses out of the status quo and into growth know that the key to success is assembling a strong team. Depending on the size of your business, this may be an internal team, with your C-suite, or it may be external, with your attorney, CPA, insurance broker, and HR team if you outsource. Find the people who understand your business, who specialize in their fields, and who come highly recommended. With this team in your corner, you're ready to go to work in the actual planning process for your next year.

HR planning often uses staffing as a starting point. The three essential questions you want to ask are:

Do I have the right people? (Do we have the people with the skills and knowledge to meet the firm's goals?)

Do I have the right people in the right places? (Are we using everyone as effectively and efficiently as possible?)

Do I have people doing the right things? (Are we meeting our sales goals? Are we meeting our benchmarks for customer satisfaction, quality, growth etc.?)

In a recent landmark survey conducted by Gevity Institute in association with Cornell University , it was found that all three of the above factors are necessary, and there is also "a clear correlation between employee management practices, alignment, and company success." Some HR practices are more effective than others, researchers found: The best retention practice is creating a family-like workplace where company information is shared with employees, social events bring people together, and new hires get a comprehensive orientation program. The study showed that firms should be future-oriented when recruiting, bringing in talent tailored to long-term contributions, and use formal HR processes and professional standards to manage people.

In the other phases of research on the impact of good employee management practices on profitability, Gevity and Cornell surveyed employees as well as owners and HR managers. Phase three showed that the most important employee "outcomes"--results of good HR practices--for revenue and profit growth are involvement and low intentions to leave a company:

Customer satisfaction is raised by employees who are committed to their supervisors, trust their management, and cooperate with their co-workers.

Trust in management is the biggest driver of product or server quality.

Successful development of new products or services depends on the same three factors as high customer satisfaction.

The research produced strong, measurable evidence. Rates of increase in revenue and profit and reductions in turnover were even greater for firms with high growth or fierce competition and also for larger firms. Here are three key strategies:

Select employees based on how they fit the organizational culture rather than for skills to fit a particular job.

Use a self-management strategy with employees rather than a controlling management style: Grant discretion and foster trust and empowerment.

Motivated and retain by implementing a family-like community.

The motivation/retention strategy was most effective in both growing profit and reducing turnover. The self-management strategy increased revenue most effectively. But using all three strategies had the best results: Revenue up by 22.1 percent, profit up by 23.3 percent, and turnover reduced by 66.8 percent in the companies studied.

Author: Reed Jorgensen, SPHR, HR Manager, Your People Professionals