Monday, December 29, 2008

A New Year's Resolution fof HR

Now more than ever companies need HR's expertise in the areas of efficiency and performance. The predictions for 2009 are not positive, so we know that we are facing many challenges in the upcoming year. Companies will have to make tough decisions about people and expenses. I believe this is a time where HR can shine. After all, in service related businesses the people costs can make up 60-70% of the overall costs in an organization.

So, forget about the table! Quit talking about the table. Don't worry about the table.

Just BE STRATEGIC...the times are demanding this from HR.

The next question is "what should I do?" I am re-reading one of my favorite books on the subject: Roadmap to Strategic HR: Tunring a Great Idea into a Business Reality by Ralph Christensen. This book is a great read, I highly recommend it.

The following items are my recommendations for HR professionals in 2009:

1) Are there processes that can be streamlined or that can leverage technology without negatively impacting the customer? (HR processes and company processes)
2) Are we getting the most bang for our salary buck? Is everyone performing at a "high-performing" level? If not, why and what is the game plan to get those not performing up to speed or out of the organization?
3) If a reduction in people expenses is necessary, HR should present every option to management with pros and cons and COST IMPACT of each option. (i.e. layoffs,. furloughs, shortened schedules, job shares, etc)
4) Is there training that can be delivered that will make the organization more competitive when the economy does pick up?
5) Can HR be restructured in a more cost effective, efficient way? (generalist vs. specialist, shared services vs. field personnel)
6) Are there tasks that can be outsourced both in HR and company wide to save money?
7) Review benefits philosophy and utilization to see where potential costs savings can be gained. Determine impacts of those decisions to the workforce. Make recommendations before management asks you to cut the benefits budget.
8) Make sure customers are put first in all decisions. Make sure customer service does not suffer from any of the above.

If HR can lead in these areas, you will truly be a business partner with a permanent seat at that table...

Monday, December 22, 2008

Here’s One Climate Change We Can Control!

Barbara Hughes, Co-Founder of ICC, authored this week's blog.
A company’s service climate is a function of its customer strategy and is strongly correlated with customer satisfaction. Measuring your employees’ perceptions of how strongly you execute service quality and service capability is predictive of customer behaviors. For example, when employees perceive they work in a positive service climate, customers report they experience a positive service quality and are more satisfied.

So, employee feedback is a critical resource to gauge what drives your customers’ satisfaction, intention to repurchase and refer you to someone else.

Managing the service climate is a tool that HR and other business units can use strategically for higher performance and financial results.

There are 8 core drivers of the service climate:

• Customer Orientation and Service Quality Emphasis

• Management Support

• Hiring

• Training

• Rewards & Recognition

• Teamwork

• Support Systems

• Customer Feedback

Not all of these drivers may apply to your organization. Soliciting feedback from your employees will determine which drivers have the strongest impact on your service climate.

In 2009, we will be discussing much more about service climate, linking employee and customer data for superior performance and the “how-to’s” of this critical organizational strategy.

Monday, December 15, 2008

It's a Good Time to get Your HR House in Order

I believe next year will bring even more challenges with our economy, layoffs and even new legislation that will impact our organizations.  With this in mind, it is a perfect time to make sure HR is aligned to the business.  Because I think once things do turn around and they will, BUSINESS WILL BE CONDUCTED VERY DIFFERENTLY.

I believe the new key words will be Performance and Accountability

So with that said, HR will be in a great place to make those two things happen by creating:
1) A true pay for performance system
2) Metrics that link to the organizational goals and objectives

Before you start on the two items above, I believe HR will need to make sure its house is in good order.  In other words, make sure that the basics are being done correctly like compliance, payroll, benefits, handbooks, and polices and then you can start on the strategic projects.

A good first step is to conduct a very thorough HR Audit to see where you stand.  The audit can certainly be handled internally but like any other audit, it is always good to get an outside, objective pair of eyes. 

View a sample Audit Form to see items that should be considered during an HR Audit.  After the audit is complete you can then prioritize the action items that resulted from the audit.  Action items should be results oriented and linked to the goals and objectives of the organization. 

Wednesday, December 10, 2008

Job Analysis: 5 Reasons to Start One


My colleagues and I have been working on an extensive job analysis project for the past few months. As we study over 200+ jobs I am reminded why this is such a great study for HR professionals to consider:

1) It is the best and fastest way for an HR person to understand the business.

2) It becomes crystal clear who the top performers are when you interview, observe and collect job data

3) Recruiting is much more effective because you know the knowledge, skills and abilities for each job

4) Inconsistencies within job titles and job families are uncovered

5) Job analysis data can then be used to CUSTOMIZE compensation redesign, performance management and training design

And let’s not forget that the major deliverable of a job analysis is up to date job descriptions. I believe that you should take a competency and skills based approach when performing this type of analysis. This approach works well with succession planning and career development.

The most important part of the job analysis process is the actual data collection. Our team has been scoring the jobs using the PAQ (Position Analysis Questionnaire) that has 195 scored items. You can imagine the detail for each job. In order to score each job we have been using several data points that give us rich information on each job;

1) Job questionnaires that are filled out by each incumbent

2) Job observation-certain jobs are observed to get a better understanding of that job

3) Current job descriptions

4) Manager interviews

By understanding the jobs and what makes individuals successful in those jobs is a good first step in making sure HR systems are aligned. If we don't understand the job then is makes it very hard to hire for that job, train for that job, appraise that job and set realistic expectations for the job.

Action Item: Start Job Analysis, January 2009

Tuesday, December 2, 2008

What to Include in a Cost Per Hire Calculation

I have been asked several times over the last few weeks about calculating cost per hire. In particular, what items to include in the calculation. I have seen many companies calculate this metric in many ways. My advice is to make sure you include everything that impacts the new hire and be consistent with your formula.

I think it is very hard to compare apples to apples when looking at this number. Many people include managers time for interviews, some do not. Some people include training costs, others do not. Here are the items I recommend:
  • Salaries including benefits (recruiters)
  • Salaries including benefits (managers)
  • Travel, lodging and related expenses
  • Contract recruiter or search firm fees
  • Advertisements
  • Job fairs
  • College recruitment
  • Employee referral award
  • Screening (background checks, pre-employment testing)
  • Training new employee
  • RAMP UP Costs (New hires time to get to efficiency)
I believe it is important to look at cost per hire by job category. Here are a few suggestions:
  1. Hourly
  2. Leadership
  3. College graduates
  4. Professionals
This metric is a great way to show efficiency in the recruiting area. It is easy to derive and you can definitely start measuring tomorrow!

If you would like an excel file that contains these fields with formulas please email me and I will send it to you.