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Liz Ryan on April 25, 2012

If you ask a CEO “What does your HR leader do?” he or she is likely to say: “You got me. I just know I need to have one.” We expect our HR execs to look after employee records, hire and train people, administer performance reviews, and see that comp and benefits practices chug along. Beyond that, the mission can get fuzzy, fast. Most CEOs I know don’t have a ready answer to the question “How does your HR leader help your organization compete?” nor do they have a handy list of must-do activities for an HR exec charged with boosting the organization’s competitive mojo.

It’s every HR chief’s highest calling to make sure his or her employer has the most excited, switched-on, and capable people on the market. Here’s a list of the things your HR head should be doing right now:

1. Collaborating with you and other leaders to design and communicate a vision for the company, using every communication vehicle you have.

2. Selling your company to the “talent population,” in person, online, and via print and broadcast media. An HR leader should articulate the organization’s culture and story, not only for recruiting purposes but to fuel all of your activities with clients, vendors, media, and the business community.

3. Teaching all employees to tell the truth at work, especially when sticky interpersonal or political wrangles crop up. (Note to CEO: This includes telling you when you sound like a crazy person.)

4. Reinforcing a culture that emphasizes ingenuity over irrelevant, one-size-fits-all metrics.

5. Building a pipeline of qualified, energized people to fuel the company’s growth—scrapping the requisition-by-requisition, transactional recruitment model.

6. Shifting the HR function away from a break/fix model (“Benefits question? Second door on the left.”) to an embedded function in your business units.

7. Installing just enough HR process to meet your company’s regulatory compliance needs but not so much that people are stymied or treated like children.

8. Building a culture of collaboration that fuels every important program at your company. If your HR chief isn’t the advocate for people and evangelist for your culture, that’s a bad sign.

9. Asking your team members every day for their input on your business, their own careers, and life in general—not via a sterile, once-a-year “employee engagement survey.”

10. Replacing fear with trust at every opportunity, in policies, training sessions, management practices, and via every conversation in the place.

It’s a new day in HR. Is your company on the cutting edge, or bringing up the rear?

Liz Ryan is an expert on the new-millennium workplace and a former Fortune 500 HR executive.

20 March 2009 8:22am

Employers that enforce hiring freezes during a downturn run the risk of anarchic recruitment systems and their costs spiralling out of control, says HR expert Steven Dahl.

Dahl, the founder and managing director of HR solutions provider Onetest, says it’s a “myth” that recruitment freezes protect an organisation from escalating recruitment costs.

“We have to remember and be realistic that even in a recession, people get sick, they have to leave work, they move interstate… Even during a freeze, organisations will be recruiting. The volume of the recruitment might not be as high as it has been in past years, but the critical roles will still need to be re-hired.

“Turnover will still occur even in a recession. When recruitment processes are put on ice, recruitment becomes ad hoc and inconsistent, [leading to] ‘recruitment anarchy’.”

In a webinar this week, he explained how during a time when HR teams might be downsizing or “busy trying to do more with less”, normal recruitment processes are put on ice. When a line manager needs to fill a business-critical role – quickly – they will bypass HR and send the job to an external agency rather than be “inundated” with applications, resulting in a cost between $10,000 and $15,000 (depending on the salary).

“Before too long other managers are following suit and… even though they were in the midst of a recruitment freeze designed to save money and cut costs, have ended up spending several hundred thousand dollars, just in replacement recruitment.”

Now is not the time to let recruitment systems and processes slip, Dahl says. “We know that ad hoc rec ultimately leads to higher costs and greater variability of people that we bring into the organisation.

“We also know from life experience that processes that are more consistent deliver results… And when processes aren’t clearly defined, and we have people who are busy, stressed or time-poor, they tend to do their own thing, and when they do their own thing they tend not to do it particularly well.”

An employer can “end up with as many different selection processes as they have line mangers recruiting, and this isn’t a good thing. If an organisation has right-sized or downsized or retrenched workers over the last six months, as we come out of this recession it has an enormous opportunity to actually recruit or refill its stocks of employees with more of the right people.”

Applications influx an opportunity, not a challenge
Dahl says that while some employers are now shutting down the recruitment pages of their websites due to overwhelming numbers of job applications, this is not the right strategy.

Instead, they should set up online systems to capture all the applications and create a “talent pool” for future recruitment needs.

“What we should be looking at doing is opening it up and getting as many applicants in as we possibly can, registering their interest for future job opportunities, and building that talent pool of five-, ten-, fifteen-thousand candidates which can be accessed for future recruitment needs.

“I can only stress too much to organisations that they don’t turn their back on collecting applications during what I know is a very tough time for business. Whilst you might not be recruiting as feverishly as you were in the last 12 months, you will need to recruit replacement roles; we will come out of the recession and when we do, and you need to recruit more people, this is a great low-cost way to tap in and get access to your very own ready-made talent pool.

“Building your talent pool is going to give you a huge commercial advantage over your competitors. It’s going to help you to fill roles faster, and significantly bring down your recruitment cost per hire.”

Keep the pool “warm”
Dahl warns that “talent pools do ‘go off'” so employers must ensure they stay in touch with the database on a regular basis.

“Send notifications about what’s happening in the organisation about new roles and opportunities that are coming up. You still need to communicate and engage with your talent pool to keep them interested, live and active. A good opportunity will always tempt or entice a jobseeker to take another look, so keep them warm and keep them engaged.”

Workforce Planning Is Hot; Are You Lagging Behind?

by Dr. John SullivanFeb 23, 2009, 4:15 am ET

What’s hot in talent management changes quite often. Right now, there’s no hotter topic within the talent management community than workforce planning.

The reasons are simple: with the current economy driving revenues down dramatically, many senior executives are examining how to plan ahead in order to increase their firms’ capabilities, reduce costs, and survive the economic chaos likely to continue for some time.

Organizations need an effective talent management plan that will allow them to “explode out of the box” at the first sight of economic recovery, yet one that doesn’t threaten economic sustainability in the short term.

While most in talent management are continuing to react with stale cost containment approaches developed decades ago, strategic talent managers are stepping forward with robust workforce planning solutions and new work models that account for the significant changes in both how people work and live that have occurred in the last 20 years.

If you are interested in doing more than talking about being strategic, here are some recommended action steps to help improve your organization’s workforce planning.

What the Heck is Workforce Planning?
It might seem like a simple question, but there is little to no agreement among HR and talent management professionals as to what constitutes workforce planning. To some, it’s mostly an administrative activity that reports on historical changes to headcount and forecasts likely changes based on historical trends (i.e., headcount planning).

To others, it is a more strategic effort designed to forecast talent needs, talent supply, and the ability of existing HR programs and activities to align the two.

The more strategic variant looks at both internal and external trends and predicts what will be needed to recruit, develop and redeploy “just the right amount” of talent to meet specified business needs. The definition of workforce planning I prefer is:

“Workforce planning is an integrated and forward looking process that is designed to predict (what, when, how much) will likely happen in talent management and then to provide action plans that will cause managers to act in the prescribed way. As a result of the planning process, managers will be able to avoid or mitigate people problems, take advantage of talent opportunities and to improve the “talent pipeline,” so that your organization will have the needed “people capabilities” required to meet your business goals and to build a competitive advantage over other firms.”

Goals of Workforce Planning
Once again, not everyone agrees on what workforce planning is, but generally speaking, there are eight major goals for workforce planning that everyone should agree make sense. These goals relate to an organizational capability to:

Reduce labor costs rapidly without negatively impacting productivity.
Identify and prepare leaders and managers for future openings.
Fill “sudden vacancies” in key roles immediately with capable talent.
Maintain a flexible contingent workforce.
Proactively move talent internally to maximize the return on talent.
Target retention activities on key talent.
Identify mechanisms to rapidly hire needed talent.
Increase the overall productivity of the workforce.
Key Programs within Workforce Planning
There is no standard array of programs that define every organizations’ workforce planning effort. No matter what you end up doing, your programs will largely fall into one of two areas.

The first area focuses on increasing organizational capability through talent, and common programs in each area include:

Forecasting the future needs, talent availability, and potential talent problems.
Succession planning and leadership development.
Forecasted recruiting plans.
Workforce innovation management.
Retention planning.
Immediate “backfill” planning (To fill sudden openings in key positions).
Internal re-deployment and “right job” placement planning.
Merger and acquisition integration plans.
The second area focuses on decreasing labor costs, and common programs in each area include:

Contingency/contract labor workforce planning.
Workforce outsource planning.
Reduction in force planning.
Benchmark Firms
In my experience, these are the firms to study:

KLA Tencor
U.S. Marines
Eli Lilly
Booz Allen
Workforce Actions That ‘Fit’ the Current Environment
The most effective workforce plans are not developed over a long period and then implemented all at once. Instead, while some plans are being developed, talent management leaders simultaneously take action to resolve immediate needs.

If your company is struggling in the current economic environment, five of the key action steps that you should consider immediately are listed below.

Action Step I – Labor cost containment/headcount reduction
I am not alone in forecasting the fact that the decrease in revenues that businesses are facing will continue for at least another year. Whether that actually happens or not, it’s always a good idea to prepare for the “worst-case scenario” and hope that your plan is not needed.

Start with position prioritization, a process that identifies which key positions, key individuals, and key skill sets will have the most business impact during the next two years. Once you prioritize, you can then focus on retention, redeployment, and development efforts on the most impactful positions.

A related step is to develop a process to effectively identify and “control” all forms of labor costs throughout the organization (that includes full-time employees, part-timers, contractors, consultants, strategic partner labor, and outsourced labor).

The next step involves developing the capability of reducing “labor costs” and headcount in the lower priority positions. That might include “mock layoffs” and designating lower priority positions as “contingent labor” positions. Other options to consider include labor wage arbitrage (moving labor to lower-cost areas) or outsourcing with contracts that allow you to rapidly reduce outsourcing costs as your needs decrease.

Action Step II – Increase the internal movement of key employees
As business needs change, it’s important to develop processes that don’t leave the internal movement of talent into the “right job” to chance (as most internal job posting system’s do). I recommend that you develop a proactive redeployment process and plan to move your top performers and highly skilled individuals out of less essential business units and into units and jobs where they can have a greater impact.

The goal is to make sure that you don’t have a “Michael Jordan” playing “baseball” within your organization, when his impact would be significantly greater if he was proactively moved into “basketball.”

The right job can be defined as having your top performers and highly skilled individuals:

Doing what they do best;
With the right skill set for the job and business unit;
With the right tools, resources, and motivators;
With the right manager; and
With the right teammates.
Action Step III – Increase the retention of key employees
Most organizations literally “forget” about retention during tough economic times because they assume that their employees will put security over external opportunity.

Unfortunately, that would be a mistake because the seeds for foundation of top performer turnover begin long before they decide to leave the firm. “How you treat your current employees now,” will directly impact their willingness to stay later on when the economy turns around. If your firm has been using hiring freezes, pay cuts, furloughs and layoffs recently, your key employees are likely to be frustrated and overworked. It’s also true that some firms have learned to continue hiring while simultaneously releasing employees.

This “churn” means that recruiters in some industries, firms and regions are still targeting your very best.

The best retention plans first identify the things that excite and frustrate your key workers and then provide a plan for increasing their level of excitement, challenge, learning, and opportunity within the firm.

The last but most important action step is to develop a “bad manager identification program” because bad managers are the number one cause of employee turnover. [For more information on setting up a Bad Manager Identification Program, click here.]

Action Step IV – Reinvigorate your succession plan
If your firm has undergone layoffs, hiring freezes, and reductions in college hiring, you are likely setting up your organization for a future “talent pool gap.” What this means is that by failing to hire and develop talent over a period of even a few years, there simply won’t be enough available talent to fill future management leadership positions when growth begins. This will slow promotions because there just isn’t anyone internally to replace them. This will make the predicted “leadership gap” even worse.

The best course of action is adopt your own “churn” approach to maintain some minimal level of hiring and development to minimize the possibility of any future internal talent pool gap. A related option is to implement a talent SWAP approach, where you continually “troll” for top talent and then replace bottom and average performers only when you find an exceptional replacement.

Action Step V – Prepare to “explode out of the box”
The final action step is to develop a plan that enables your firm to have sufficient talent to enable it to “explode out of the box” the minute that your firm’s revenues begin to turn around. That means retaining your very best recruiters on staff and having them focus on developing Web 2.0 recruiting tools. It’s equally important to maintain the two most-impactful recruiting programs, employee referrals, and employment branding.

Develop a “boomerang” program that tracks and maintains a relationship with the very best employees you must release. The goal is to be able to almost immediately rehire some of the proven talent that you lost.

Final Thoughts
The basic premise of workforce planning is that it’s better to be prepared than surprised. It might seem counter-intuitive to try to plan during times where uncertainty is so high, but that would be a mistake.

During times of turmoil, almost any forecasting and planning will produce higher business impacts than reacting to unforeseen events without a plan. Fortunately, if you’re personally interested in workforce planning, you’re likely to find that no one actually has the formal authority to “own it” at the present time, so you can seize the opportunity and become known as the person who can see around corners. During turbulent times, you will find that no one will be considered more valuable than someone who is not “surprised” by the future!

February 11, 2009

By Matt Barcus
President, Precision Executive Search
Managing Partner, A/E/P Central, LLC, home of

When people ask me what I do, I like to tell them that I am an “Executive Search Consultant,” but I always then clarify that with, “you know, a headhunter.” I am not a Human Resources professional, but I interact with them on a regular basis, and based upon those interactions I thought I could offer up some different suggestions that Human Resources professionals could be doing during these slow times. Now, I do have a couple of good ideas, but I have decided to hold off on those ideas for now as a friend of a friend set me straight about what many Human Resources professionals within the civil engineering industry are going through right now, and it is a topic that is worth mentioning.

The economy has slowed down, but you have not…many of you are still working 50-60 hours week, but now you are experiencing the dark side of human resources where the best skill sets you have are guts and compassion. Downsizing, layoffs, RIF, whatever you want to call it, it is not a pleasurable experience, no matter which side of the desk you may be on. I speak here not through experience, but through the account of this process from a Human Resources professional in our industry.

Preparing for layoffs is grueling:

Compiling staff review documentation from managers;
Working with managers in identifying who will be laid off ;
Coaching those managers as to how to best approach the looming conversation while knowing that no coaching can really ever fully prepare someone for what it’s like to let a colleague go;
Organizing and implementing severance programs;
Administering COBRA;
Conducting outplacement assistance;
Fending off lawsuits;
Taking on the tasks of those in your department who were recently let go;
Much more that I am surely missing.
Maybe the most difficult duty you have right now though, is having to sit down across the desk from a mom or a dad, from a single parent, from an employee whose spouse just lost their job a week ago, from a parent with a sick child or a child who is just getting ready to go off to college, from a young woman who just put a down payment on her first home, or from a friend, and telling them that they are being laid off. ..and then dealing with roller coaster of emotions that are felt from that employee, their family, from yourself, from their supervisor and from their friends who still work there.

This is not what you signed up for, but there is no better trained or more qualified person in your organization to deal with the current situation than you:

You have the guts to stick to the orders that you were given as opposed to packing up your desk and bailing;
You have the compassion to empathize with these folks;
You have the ability to absorb the verbal abuse that is unleashed on you;
And you have the know-how and the desire to do EVERYTHING in your power to make sure that these folks are granted their severance, that they are provided everything they need to know about applying for COBRA, that they know who to call to roll over their 401K into what you hope to be a new 401K in the very near future, and to coach and to help these individuals find new employment.

Especially during these tumultuous times, the Human Resources professionals are clearly the unsung heroes whose compassion, resiliency, hard work and dedication are the rock…wait…the mountain…that everyone leans upon.

The great thing about being in America is that we are resilient. We have the ability to dig down DEEP and to be strong, to stand tall, to fight tooth and nail, and to land on two feet. It is not an easy thing to be a part of, on either side of that desk, but the smoke will eventually clear and most people will be a better person for it.

by Dr. John Sullivan
Mar 9, 2009, 6:00 am ET

Let me apologize upfront for this “rant” on HR’s failure regarding workforce planning, but I can’t think of another time where human resources as a profession appeared to be floundering to the point where it’s embarrassing itself.

All you have to do is read the paper on a regular basis to see that many firms and their respective HR departments are struggling to find ways to reduce labor costs. Rather than implementing sound and well-established workforce-reduction plans, HR and talent managers appear to be making it up as they go, all in an attempt to avoid layoffs.

More often than not, they are utilizing ineffective and often damaging approaches like furloughs, pay cuts, and voluntary buyouts. After years of clamoring to get a seat at the table, many HR departments are demonstrating why they shouldn’t have a seat; they struggle to deal with a predictable and reoccurring problem, economic downturns, and the related need to dramatically cut labor costs.

At least to me, the lack of a long-established plan of action at most firms is an unnecessary embarrassment when it should be a significant opportunity to stand and deliver.

Déjà vu All Over Again
The lame reaction by HR departments around the world wouldn’t be nearly as embarrassing if it weren’t for the cyclical nature of the economy and the fact that organizations have faced downturns every few years since the emergence of civilization, most recently in 2001 and 1994.

Organizations are challenged to grow quickly during upswings and reduce labor costs during downswings, yet most in HR seem utterly “shocked” at the challenge before them. This time around, unfortunately, organizations are proving that despite lots of practice, they are no better equipped to handle the problem than they were the last time it occurred.

It’s almost like those in HR feel exempt from learning from history. Shame on those in HR who are so busy with day-to-day activities they can’t learn lessons from their mistakes. Even a struggling sophomore in economics knows that the economy is cyclical and that ignoring or pretending that it simply isn’t so is a prescription for disaster.

When business is good, senior executives expect HR professionals to be ready with a plan to hire and develop more people so that the organization is capable of meeting its growing obligations. When revenues decline, executives expect HR to have a plan to painlessly cut labor costs, again to right-size the organization to its obligations.

Executives expect all business functions to be able to adjust their expenditures with the changing business cycle. Can you imagine a store manager at Macy’s not realizing that there is an established retail holiday cycle where employees are added for the busy season but then “released” when consumer demand subsides? Ignorance of this business cycle would get any retail manager fired on the spot.

Similar cycles occur at ski resorts, amusement parks, and ice cream parlors. In fact, this “hire and then release” cycle occurs in every industry, the only difference is that instead of the down cycle occurring at the same time each year, it instead occurs in five-, seven-, or 10-year intervals. Just because they don’t occur at the exact same time every year is not an acceptable excuse for being unprepared.

Don’t You Dare Use the ‘L’ Word (Layoffs)
It seems to me that only Pollyannas or naïve individuals should be “caught with their pants down” without a plan for how to lower labor costs as business revenues decline, but isn’t that exactly the problem with many HR functions? They are so focused on day-to-day operations and are so “positively oriented” that frequently they don’t even want to think about the periodic need to conduct layoffs.

Other managers throughout the business routinely face up to the fact that they must periodically reduce costs. Managers of product inventory know it, production managers know it, even call center and shipping managers know it.

Because the total cost of employees is often 60% of all variable costs within an organization, it should never come as a surprise that the firm’s largest single expense item would be first on the chopping block when revenues decrease.

It seems like some HR departments try things almost at random (like hiring freezes, voluntary buyouts, and employee furloughs), even though these “stopgap” methods almost always fail to prevent the ultimate HR failure: large-scale public layoffs that dramatically damage the firm’s employer brand image.

When HR is pushed by the CFO’s office to reduce labor costs, more times than not, they react emotionally rather than logically, which is a poor substitution for collecting data and figuring out the best ways to cut labor costs without negatively impacting productivity.

HR needs to stop developing an “ad hoc” cost-reduction program every seven years, only to immediately abandon it after its first use; instead, a permanent process that provides for the real-time adjustment of labor costs and overall staffing levels is needed.

There are only three effective solutions that enable rapid labor cost containment:

A fixed contingent workforce percentage program. Where workforce headcount growth and labor cost reductions are both handled through the use of a fixed percentage of labor cost being allocated to contingent labor. This approach uses a combination of variable cost outsourcing contracts and the hiring or releasing of temporary or contract workers to meet the required change in labor costs (Google and Microsoft are benchmark firms).
A continuous reduction plan. Under this approach, surplus labor (usually bottom performers and those with obsolete skills) are proactively released each quarter (Cisco is a benchmark firm).
A SWAP process. This approach is designed to continually improve your talent pool without changing headcount. Using the SWAP approach, bottom performers and those with skills that are no longer needed, are replaced whenever a high potential recruit is found. The net result is an overall increase in productivity and skills with no net increase in headcount (Slide is a benchmark firm here).

All of these approaches provide an organization with the capability to adjust the capability of the organization while containing labor costs.

The Four-Petal Shamrock Workforce Management Strategy

The most effective workforce management strategy is known as the shamrock approach where a portion or group of the workforce is represented by one of four petals:

The first petal (permanent employees with good performance and current skills) reflects jobs and individuals who would not usually be reduced in a normal downturn.

A second petal represents a group of contingent workers who could be easily released when labor costs need to be cut.

The third petal represents work that would be outsourced under flexible cost contracts.
The last petal would reflect the SWAP program and individuals who would be replaced whenever a high-potential recruit came along.

HR Should Identify Warning Signs
There is a relatively simple, two-part process that allows HR to identify precursors or warning signs that would alert HR leaders before they need to reduce labor costs:

Identify first-action firms. In every industry, there are repeatable historical patterns where certain firms act first to either reduce labor costs or to increase hiring. Here is an example to illustrate the approach. If you look back to 2001 and 1994, you might find that computer-chip equipment manufacturer that we will call Firm X was a “first action” firm. Meaning that they began to reduce labor costs months before their competitor, Firm Y. Several months later, you, their customer (Firm Z), followed suit by cutting labor costs. If Firm X acted immediately after their orders decreased by 20%, your company, Firm Z, can now use that pattern of first- and second-acting firms as well as the precursor (20% cut in orders) as early warning signs about when your firm might need to act to reduce labor costs. Changes in key economic indicators like unemployment rates, interest rates, or consumer spending rates might also serve as precursors or warning signs.

Identify the ideal labor cost to revenue ratio. If, for every $60,000 in labor costs, there should be $100,000 in revenue (a 6-to-10 ratio), you know that when the ratio reaches 8 to 10, it’s time to reduce your labor costs. In the opposite direction, when the ratio reaches 4 to 10, you know it’s time to consider new hiring. Alternative ratios include your average revenue per employee and the percentage of all variable costs that are spent on all of the various types of labor.
Other Action Steps
Pre-identify jobs that are likely to be protected, even during slow growth periods. By working with managers, you can identify jobs that should not be reduced, even when revenues drop. These “protected” jobs might include product development and sales. Individuals in these jobs should be informed of their relative job security in order to avoid unnecessary anxiety.

Conversely, there are jobs that are almost always reduced or declared “surplus” whenever revenues and workloads decrease. Typical jobs that are likely to have surplus employees might include customer service, supply chain, and production employees. There should be an absolute requirement that a fixed percentage of these jobs that have a high potential for becoming “surplus jobs” will be filled by contingent workers that are more easily released.

Make the internal redeployment and transfer process more proactive. Not only should the process be sped up, but individuals with key skills should be proactively “moved” from low priority and low-impact jobs to roles where these employees will have a higher ROI.

One last but very important action step is to make labor cost-reduction decisions more “fact-based” and metric-driven. Whenever any labor cost-reduction program like furloughs or voluntary buyouts are administered, use metrics to assess how effective they really were in cutting overall labor costs, while documenting their impact on morale and productivity. By collecting data, you can avoid implementing expensive stopgap measures that end up causing more harm than good.

Final Thoughts
If you are an HR leader and take umbrage to this article and its characterization of HR as a group that fails to learn from history, we will just have to agree to disagree.

Any organization that tries short-term “stopgap” measures only to be forced months later to conduct large-scale public layoffs has to be classified as a workforce planning failure. A superior and more strategic approach is a permanent workforce strategy that allows you to continually “vent” or seamlessly reduce workforce costs. Contingent workforce, continuous reduction, and SWAP plans all produce less workforce disruption, gossip, bad publicity, and surprises.

It’s time to face reality. In a volatile world, the ability to expand the workforce and then later to contract it is fast becoming a required capability for all firms. In the near future, it will likely be necessary for HR to have the capability of hiring new skills and talent in some areas, while simultaneously releasing workers in low-priority areas. The ability to handle this “continuous churn” will become a key competitive advantage for firms and a primary differentiator between good and great HR departments.…once-again/

02 March 2009 8:19am


HR must make the shift from transactional to transformational – driving change within a business instead of just aligning with it – if it wants “a seat at the table”, says the head of global HR consulting at Kelly Services.

Presenting a webinar last week on the challenges facing HR during the current downturn, Lance J Richards urged HR practitioners to embrace some “absolute imperatives” that will help them position their companies for success – now and when the market turns back up.

Even in a time of large-scale job cuts and “disappearing companies”, he says, “the issue of human resources and the issue of talent management is still with us, very much… So for the first time since HR came into existence in the 1940s, we are top of mind”.

All part of a cycle

Richards says the first imperative for HR is to remember that the current market is “just part of a cycle”.

“Economies run in cycles – that has not changed. We have to remember there is a longer-term view. Yes, we have some issues here today, but on a long-term view we still have the issues coming ahead of us.”

The war for talent, he says “has already ended. Talent has won. We are all on the back foot and we will continue to be.”

HR can’t affect the “flatlining” birth rates that are the underlying cause of the global talent shortage, but it has an obligation to understand that the “oops point” – when “the economy is back, business is growing, but the availability of talent is going to drop” – is coming. “We have to understand longer term exactly what this is going to do to us.”

Migrate from transactional to transformational

“We’ve got to look at what we do within our businesses. We have to continue making the migration from HR being transactional to being transformational.”

HR has been focused on trying to be aligned with the business, he says, but “alignment is no longer sufficient. We have an obligation to be not just aligned but interwoven – truly a part of the business”.

“This requires us to look at HR as a completely new platform.”

HR often complains that it doesn’t have “a seat at the table”, he says, but “asking for a seat at the table isn’t going to work. We have got to be involved in designing the table, building the table, and only when we’ve done that will we be welcome at this brand new table and accepted there”.

HR practitioners must understand business and business strategy – what drives the business – as well as they know HR, he says. But for most practitioners, “all we know is HR”.

Ride the dragon

“Change is like a dragon. You can ignore it, which is futile; you can fight it, but you will lose; or you can ride it.”

HR has an obligation “to understand what that means and come in and ‘ride the dragon'”.

For example, he says, HR must understand the changes that Millennials – or Generation Y – are bringing into the workforce.

“They are bringing into the workplace a significant shift. They’re not focused on being with your company for ever and ever, and not necessarily interested in climbing the corporate ladder. These folks are very focused on what they consider to be an engaging workplace. Their demands are not about wanting to be CEO… they are focused on their life. And the challenge we’ve got here… is to provide them with work/life balance. They enter our workforce expecting it.”

Too many companies are still focused on maintaining a nine-to-five culture, “and that becomes a problem with Millennials as they’re coming in. They are not going to tolerate those kind of requirements”.

As well, he says, HR must embrace the “amazing things going on [with technology]”. It has an obligation to “have and build enablers that allow employees to get work done more efficiently”. iPods, for example, can be used for training, and Skype for video calls.

“If we allow workplaces to fall behind, then the talent we need are going to find somewhere else to go.”

Remember Darwin

Darwin’s theory of survival of the fittest – “those that fail to adapt, fail” – applies to HR, Richards says.

“Being good at HR is absolutely necessary, but no longer sufficient.”

Research shows that CEOs believe HR lacks business acumen, and line managers think HR lacks the capacity to develop talent strategies aligned with business objectives, he says. Management also believes that HR isn’t held accountable for the failure of talent initiatives. “That’s a problem. That is a frightening indictment when line managers are telling us these things.”

HR must move away from traditional measures of success – such as cost per hire, mean time to fill etc – and focus on “world class quality”.

“I rarely get clients tell me that their number one concern is ‘how cheap can I do something’ or ‘how fast can I do something’. What our clients are telling us today is they’re essentially focused on quality. They will put up with higher costs, they will understand longer time periods to deliver results, but they will not sacrifice for quality because that is what makes the difference now. And that’s the piece that a lot of HR professionals have not gotten their arms around.”

Take care of employees, including the ones who are leaving

Although employers might currently be releasing employees, says Richards, they must remember that “we’re coming rapidly to the ‘oops point’. The economy will turn up, we know that’s going to happen, and we need to keep that forefront of our minds. We will need our employees – we will need them badly.”

He urges HR to remember “who your former employee may be”, because they might be a vendor to the company; a customer; a competitor; a blogger; an ambassador; or a critic.

The person you’re trying to hire tomorrow, he says, might ask them what they thought about working for you. “What is the answer going to be when your former employee gets that phone call?”


 18 February 2009 8:28am

Successfully linking an HR strategy to the company’s bottom line hinges on managers “getting the basics right”, and understanding that much of what makes a business run well “is a lot more mundane than grand theories”, according to Barclays PLC’s HR director, Cathy Turner.

“There’s a great deal of science underpinning HR practice, but sometimes that science becomes an end in its own right rather than a means to an end,” says Turner in the recent strategy + business reader, Capturing the People Advantage. Much of the “science”, she says, seems to be rich in content. However, there is often a disconnect between the theories within the science and viable strategies that will benefit the company.

The theories, she says, are usually “platitudinous aspirations with no solid foundation”. “If you [operate] at the theoretical level only, you often build a bureaucracy, usually owned by HR, that is quite divorced from what internal clients are telling HR they need if they are to serve customers brilliantly,” Turner says. “A major risk in HR is that we become seduced by the theory alone and forget that the primary reason the company employs us is to enable business leaders to run their businesses better.”

HR managers must adhere to the “fundamental law of business”, she says. That is, providing a “service of demonstrable value to customers if you expect them to continue to do business with you”. To do this, she says, HR departments must assemble teams with: intellect – “There is a wide misconception that HR is just common sense and anybody can do it,” Turner says. “But HR is very technical, so you need good mental acuity to excel in this field.”

Barclays PLC recruits HR staff with measurable skills in employment law, talent management or recruitment. “The technically minded can contribute something real to the business and can communicate effectively with our senior managers,” she says. “If they are going to be truly credible, our HR people need to develop a commanding knowledge of the overall business, the customer base, and the products”; relationship management capability – much of what HR does involves serving others within the business, and “great service means instinctively and constantly asking, ‘How can I help you?’ and following up with strong service delivery”. “You need to interpret the human dynamics within the organisation and be sensitive to what is affecting people, always thinking what you could do to help and protect them”; high standards – HR must always be looking to improve and develop talent with the same alacrity as other segments within the business. “This means not accepting second best and always seeking to raise the standard of our work.”

Executives in the senior leadership group should also be held to account. “[Barclays PLC is] committed to realising a performance culture, which means that continuous superior performance is required year after year,” Turner says. “Individuals are under constant assessment. This is not a cosy club, and there is zero tolerance for anything other than meeting our standard”; a talent-capture policy – “HR needs to be ready to move quickly to capture talent when it becomes available from market dislocations or competitor underperformance”; and risk management skills – “When I consider the diverse aspects of the HR arena… and the extent to which our core activities of hiring and motivating employees are impacted by external regulations and internal controls, it becomes clear very quickly that managing risk and being in control is at the heart of HR,” Turner says.

“There is always money to get”: HR expert 

Print Article13 February 2009 8:47am 

HR credibility is at “rock bottom”, and it’s up to HR managers to stand up and fight for recognition and funding, and to prove to executives that human resources is more than “hiring, firing and keeping us safe”, according to Upper Edge Learning’s head of strategic design, Milo-Arne Peady.

“HR managers have to drive the change,” Peady says.

Speaking at a breakfast forum in Sydney yesterday – with fellow panellists James Adonis of Team Leaders, and Yvette Gent of love* Recruitment – Peady said that HR leaders have to be “ready for battle”, and approach every boardroom meeting with a sales pitch.

“There’s always money to get,” she says, even in an economic crisis.

The crucial thing is to take the “fluffiness” out of HR.

HR managers, she says, need to change the “fluffy” culture through communication. They have to develop strategies and competency frameworks and communicate them to executives in the financial language they understand.

They must prove to executives that training programs, for instance, are more than just spending money. They’re about “the return on spending money”. The credibility of HR hinges on demonstrating return on investment, she says.

Cash-strapped creativity

Gent agrees with Peady, saying: “Stand up and fight and get your team close and rocking.”

She notes, however, that a current shortage of cash is a reality for many employers, and that HR managers need to be inventive in their efforts to improve staff morale and performance.

“You don’t have to have money to communicate and be creative,” she says.

At love* Recruitment, Gent says, managers regularly conduct “walk and talk” sessions in informal settings such as the Botanical Gardens, in which employees are encouraged to express their concerns. People are more willing to talk outside of the work environment, she says.

Employee feedback from the sessions is collated with the results of more formal and thorough questionnaires and communicated back to the company.

Employees feel that they are part of the decision-making process, she says, and employers, as a result, can expect to see a lift in morale and performance and the retention of “Grade A” workers.

Retention key

Retaining high performers is key to surviving the economic downturn and maintaining a company’s reputation and brand status, according to Adonis.

Firing workers when times are tough should always be the last resort, he says.

“How we treat employees now is how remaining employees will treat us a year from now.”

HR managers should explore all avenues and attempt to fix problems through training and development before letting high performers go, he says.

Peady agrees: “The world you’re in right now is not the world you’ll be in tomorrow.”

Reducing staff numbers is the obvious response to an economic downturn, she says, but there are often more prudent options.

The panellists suggest:

  • reducing weekly hours in consultation with employees. Managers could, for example, request certain employees to work four days a week instead of five;
  • offering employees the opportunity to take unpaid leave for study or travel, or to cut back workers’ hours to allow them to undertake part-time study;
  • reducing graduate recruit numbers instead of hastily slashing graduate programs altogether;
  • offering trainer training courses to cut back on long-term outsourced-education costs; and
  • communicating with and looking to staff and colleagues for solutions.”Solutions don’t have to come from leaders,” Peady says.