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LoorrNc AUEAD
E MENTIoNEDEARLIERthat staffdepartrnents
have typically been ewed as expense centers.
99
tu companie,
:::: ortherwenry-nrsr
"oj"*:?T
century HR has to find a basic model for staying itr ulig"ment with its customers.In times of great flux and uncertainry the best approachis usually the simplest and closest
to bedrock management.Basicall the human resources
function has five responsibties:planning, staffing, payrng,
developing and retaining human capital. The HR Star
(seeFigure 11), revealshow the five functions are
interdependent.
WorffircePlanning
Workforce planrring is making a comeback.The
main human capital activity from the late 1980sthrough
the mid 1990swas staff reduction.By 1997,somepeople
Workforce
Planning
Retaining
Developing
Paying
Figure11. HR star
100
Looxtc AuEAD
Stffing
Hiring during periods of sustainedhigh growth
becomesan all-consumingtask. The only thing that will
make it easieris having good data on the results of your
current practices.Doesn't it make sensethat if you know
how much it costs,how long it takes,and the quality and
101
Poyi"g
Pay coverswages,salariesand benefits-the total cash
investmentin human assets.We can do a betterjob of
managing that investrnentif we look at it from a resource
ewpoint. First, we should determinewhat percentof
revenuethe businessconditions dictate to be e most
efficient level of pay. That is, how much of every dollar
we take in should we invest in human assets?This is
a,nalyzedthrough a pyramid model, shown in Figure 12.
Productivity
t02
Looxtyc ATTEAD
Deueloping
Employee developmentis no longer an option. There
simply aren't enough skills in the national labor pool
to support the growth curve into the next decade.The
make/buy decision has been preemptedby a lack of supply. The national investrnentin training has been increasing at a steady50/oper year, compounded since the early
years of the decade.The key businessissuenow is where
to spend development dollars. Basic skills, management
competenciesand executivedevelopment are all priorities.
Despite the obous basic skills shortage,we would suggestthat the biggestopportunity is in executiveleadership
development.A study of 600 companiesacrossmany
industries revealeda belief that leadershipin the twentyfirst century will require new skills and insights.* In the
final analysis,if we don't develop effectiveleaders,we
won't have to wony about basic skills becausewe will
be out of business.
103
Retaining
\Arhen the supply is limited, a wise strategy is to pay
attention to keeping what you have. Consider what it costs
to lose a sklled employee:the direct costsof termination,
hiring a replacement,vacancy costsand learning curve
loss.These add up to more than one year'spay and benefits for an exempt person. Add to that the external costsin
unhappy and lost customers,and the number goesout of
sight. One study claims that the costsof losing an effective
salespersoncan take up to three years to recover.tn
The most coflrmon causeof voluntary termination is
not pay or opportunity elsewhere.That only tips the scale
in favor of leaving. An ongoing study now covering over
20,000 casesof voluntary turnover has revealedthat 800/o
of the caseswere triggered by problems with a supervisor,
working conditions, and perceivedlack of careeropportunities. Work conditions related to flexibfiry and respectfor
the worker's personal needs.Acnrally, this is good news.
You might not be able to outbid someonefor your valued
employee,but you certainly can do something about
supervisory skills, working conditions, and career
oPportunity.
Working
C ross-Functionally
In our cornbined forty years of human resourcesexperience,we have seldom seenHR departmentsin which
all the sectionswork as one unit. The intention might be
there, but few HR directors have developedmanagement
systemsthat induce everyone to work for the gteater good
of HR.
t04
Loorttc ArnAD
Planning-Statrng-Paying-Developing-Retaining:
The human assetsof the organization need to be
reviewed holistically. Peoplecare as much about
personal growth as pay.Th.y are turned on and
off by policies in all five areasof the HR star.The
best solution is usually found in a fivepoint view.
Monitoring
the Effects
of a Collaborative Approach
When HR professionalswork with their managers,customers and their professionalcolleagues,e results are
105
Fastertime fillingjobs
Higher-quality hires
Lower developmentcosts
106
Loot<twcATIEAD
8.
r07
5.
4.
3.
For decadesthe
R.enmonhumnn*Pituf inuested.
has been
employee
question of the value of an
debated.Here is a simple solution: Take revenue and subtract operating expenselessthe
cost of pay and benefits.This "adjustedprofit"
figure dided by the cost of pay and benefits
showsthe rate of return on PeoPle.
2.
1.
108
LooxnvcArnAD
109
numan resourcesfunction is
on e ascendancy,claiminq
that becausehumar
ogruzedasrhe;',','#"*Unn:'lt*J:,T
humanresources
fri.roio., i, ,iri.i.
.ilr"t
is true.
\Alhat
is also ffue is the edence
tf."t
percentage
of human resources
"fy
are taking",*
aclvantage of this
opportunity. Wiress {orp.
the fact thut *y HRrri*"g*,
arenow comingfroalnance,
_urketig and op.ririo*,
not from wirhintheHR prof.rriorr.
ThJ_.rrug. should
beclear.The opportuniqg pf"/ir't.rJ*a
now.But in
order ro makethe team,HR prr.rrl""i,
havero become
businessprofessional,a, well.
r1 0
Rn rn RENCE s
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