Why read this? There is nothing – nothing – more critical to the success of a company than the quality and abilities of the personnel that own and operate it. The planning, acquisition and retention of staff is the most vital strategy to be formed and carried out. Whether you are part of an aggressive start-up company or supervising an old-school firm, it is never too late to inject a new workforce strategy. This management white paper acknowledges and defines the strategic choices open to today’s progressive organizations.

 

EMPLOYING STRATEGY

Planning The Great Workforce

 

Success is not solely a matter of hard work and good fortune. It is STRATEGY which makes success repeatable and sustainable. We hear the word “strategy” so often that it can lose its meaning and eventually become just another buzzword. It is such a critical concept and so integral to the art and science of business planning that we can’t afford to let it become any more diluted. Let’s take “strategy” back from the brink of the buzzword bin and reclaim it as our own.

 

What is strategy, really? Simply put, it’s a systematic plan of action to reach your pre-defined goals. Go a little deeper with your understanding of strategy and it becomes much easier to visualize. In other words, STRATEGY is an agreed-upon course of action that helps manage the relationship between an organization and its environment. Clearly, you are best equipped to define your own organization. What is it like? What are its strengths? What kind of environment does it operate within? Is it changeable? Highly competitive? Once again, you know best.

 

SELF-IMPOSED LIMITS

 

Have you ever been in a train station running to the incorrect platform? What could be worse than rushing the wrong way when you’re out of time? If you are not putting enough effort into developing unique and well-defined strategies, you could be speeding recklessly down the wrong tracks! Your strategies, when well developed, illuminate your organization and its opportunities – maximizing both the direction and the future possibility of success.

 

Too often, we limit our thinking when it comes to developing strategies. By believing strategies only have a place when it comes to hard numbers, we eliminate all kinds of planning opportunities. It’s certain that you can develop really meaningful strategies to enhance your gross profit margin or lower your office overhead. It’s also just as real and plausible that you can plan, measure and improve the quality of your workforce. When you hear the word “people” you might think it’s too “soft” a subject for hard planning but you would be missing a tremendous opportunity.

 

DOWN ON PEOPLE PROBLEMS

 

It’s probably clear to you that people management represents your biggest investment in both time and money. In fact, you must know just how rare it is to have all of your “people issues” in order at one time. The reality of Human Resources, where problems and complaints seem to rule the day, can be very disappointing to an owner who has worked his or her best to create a profitable company. But you can improve your workforce and limit the frequency, severity and duration of productivity problems and morale issues. The first step is the most difficult. You must view all elements of Human Resources as a “process”; one which responds well to strategic initiatives and performance objectives.

 

YOUR PEOPLE PLAN

 

Once you’re convinced that the world of people can be a process, you can begin to set your goals and objectives. Pretend you are just beginning (except now you know more than when you first started). Begin by mapping out the personnel you need (by title, skill and team) to run an efficient, high-quality, service-oriented business. That’s your minimum target. Anything less cannot succeed today.

 

Determine what compensation level (including benefits) you can afford to share. Aim as high as you possibly can. If money is tight, get creative with other forms of reward (performance bonuses, paid time off programs, service and recognition awards, training and education, etc.). Start to strategize. Define the organization you are creating (or re-creating) and the course of action you must take to succeed. Where will you look to recruit these workplace superstars? Do you have a systematic and legal process in place to document all of your employment candidates? It is critical you make certain you have a competitive employment offering so that you can attract the talent to win your fair share of the market. Today, many companies seek to be known as an Employer of Choice.

 

What Is An Employer of Choice?

 

An Employer of Choice (EOC) is a company recognized for treating their employees exceptionally well-- creating opportunities and instituting work/life policies on a company-wide basis which create an enjoyable and fulfilling workplace experience. They are thought of as a “great place to work,” offering careers (not just “jobs”) where employees can make a difference. Through their actions, an EOC naturally attracts a more interested, motivated and talented employment candidate creating a distinct and hard-to-match competitive advantage. Would you want your toughest competitor to have a personnel team like that? Businesses with productive, rewarded workforces regularly create significantly bigger profits, greater growth, lower turnover and recruitment costs, an enhanced image and, ultimately, a greater return on investment (ROI) for the owner.

 

If those aren’t reasons enough to institute such a visionary approach to employment, consider this; a successfully implemented EOC Program will maximize the time spent on positive, profit-contributing issues (morale builders) and minimize your time putting out employee “fires” and mitigating/litigating grievances (morale killers). Don’t get me wrong … EOC strategies are NOT all about providing high-paying, low-demand cushy positions to pampered employees. To the contrary and almost without exception, EOC’s have sky-high expectations of their workforces. They enjoy greater success in the realization of those expectations in exchange for the rewarding and respectful environment they offer.

 

HIGH-PERFORMANCE ORGANIZATIONS

 

There’s a growing consensus that managing employees well is a key to success – but few organizations have put into place the mechanisms to determine if they are achieving that goal. Do you track your people strategies on at least a quarterly basis?

 

The Government Accounting Office (GAO) recently issued a report that strategic people management is one of four key factors necessary to create a high performing organization. The report further defines strategic management as identifying the skills and competencies needed, as well as developing effective recruiting, a supervised orientation program, on-going comprehensive training and development, retention of high-performing employees and a streamlined hiring and review process. In other words, a small classified ad or a help-wanted sign in the lobby just won’t cut it.

 

MEASURE THIS!

 

There are some basic measurements and assessments you can make to determine where you are from a people/talent standpoint versus where you need to be in order to deliver the level of quality and service necessary to become recognized as a premier organization within your industry.

 

Some important questions, which have a real and measurable answer include, … are you recruiting well? How long does it take you to find the right people (and are they really the right people)? Measure the days to hire from job advertisement to the actual hire date. More importantly, what’s your employee turnover look like? That’s a number you can have in just a few minutes. Determine your average total employment for each calendar year. Divide that number into the total number of terminations/separations which occurred during that same period only. For instance, if you had an average of 22 employees during 2005 and there were 2 resignations and 2 terminations during that same period, your Employee Turnover was 18.1% (4 divided by 22). Measure it for each year to determine your turnover trends. Use the Bureau of Labor Statistic’s website (WWW.BLS.GOV) to determine the turnover rates for similar industries and compare. Are you above average or is there a problem which requires strategic action?

 

PLANNING FOR PRODUCTIVITY

 

First, take a good look at your entire team to assess your productivity trends. Use your payroll records to determine the average number of employees on staff over the last 5 years. If possible, use the average number that were employed during the course of the year, not just the number as of December 31^st. Use your financial statements to uncover your sales per employee (total sales divided by average # of employees). Post this to a spreadsheet and create a bar graph. This thumbnail picture will offer you some down and dirty glimpses into productivity. If sales per employee are increasing, it is usually safe to assume that employee productivity is also increasing.

 

Those average employee numbers can be used in so many ways. They are a great starting point for a number of important performance studies. Now you can use the same formula to determine Gross Profit Per Employee or Benefit Costs Per Employee. If you split the employee census by department, you can also review Average Annual Compensation. With some additional research, you can study similar firms or industries to benchmark your performance.

 

 

GETTING HELP

 

Is it possible to supply world-class quality as well as premier customer services without a great workforce? Unlikely. You will find almost all key competencies begin and end with talented and well-vested people. Your role as “strategist” is to constantly recruit and build a team by your action and deed. It is a job that is never finished but, when performed well, it will bring great rewards and opportunities to you, your entire staff and your customers.

 

Skillful management of such “intangible resources” as Human Resources is now synonymous with outstanding corporate performance – but it’s not easy. In fact, you may need some professional assistance. I have found The Society for Human Resource Management (WWW.SHRM.ORG) to be an incredible trade organization that oversees an educational and fully-interactive web site. On that site, you will find the latest in HR news, trends, regulations, chat rooms and the most relevant insights from both large and small companies on how best to set policy and strategies for effective 21^st Century people management. EMPLOYEE STRATEGY! Use their knowledge and expertise to assist you if necessary or that of a local SHRM Chapter or an affiliated HR Consultant, to help you define the strategic concepts and design the sustainable winning team you deserve and need!

 

Traci Totino, PhD