It's 2006 - Do You Have a Human Resource Strategy

By Dr. Rick Johnson


This new century demands that management have adaptive skills working across the generation diversity that exists in today's workplace. No doubt people are an organization's most precious asset. Today, unlike any other time in history, that asset is filled with generational diversity.

This diversity sits side-by-side, shoulder-to-shoulder, cubicle-to-cubicle and warehouseman to warehouseman. This generational diversity can create tension, mistrust and conflict and negate loyalty to the company in general.

How is This Generational Diversity Defined?

The most publicized and visible generation grouping of today are the Baby Boomers, born between 1943 and 1965, then we have the Generation Xers, born between 1965 and 1980 and finally we have the Generation Veterans, nearing retirement, born between 1935 and 1942. Generalities tell us that the Boomers think the Xers are greedy, lazy and have a poor work ethics. The Xers think the Boomers are obsessive, dictatorial and lack understanding and empathy. They 'live to work' and the Xers 'work to live.' The generation veterans are considered a pain in the backside by the action oriented Boomers and the technology crazed Xers.

To add even more challenge to your objectives in Human Resources, consider the workforce born between 1981 and 2000. These are the youngsters just now entering the work force. Let's call them The Nexters. Many in this group, early on , primarily hangs out in the service industries like fast food. You may run into a few out on your warehouse floor. As they age and gain more education you find them entrenched in technology, E-Business and many become web-head evangelists. They are eager to learn, willing to work, but lack the loyalty the Boomers expect from their employees. The Generation Xers consider the Nexters self-absorbed, spoiled brats.

You might find it helpful to create a portrait of each generation. Study it, understand it, try to learn what they value most. Listen to them. Try to understand the historical events that shaped their lives (Viet Nam, Woodstock, Gulf War, civil rights, birth control, Kent State University, safe water, safe environments). Try to profit from their perspectives and insight. Take advantage of the youthful energetic innocence and the wisdom of the experienced.

Things to Be Aware Of

Since we are experiencing the most value-diverse workforce this country has every known, traditional thoughts in the area of Human Resources must be challenged. The Xters and Nexters have a completely different mind set and value system than most of the executives in the distribution industry who happen to be Boomers. We can no longer think that this generation should be grateful for the opportunity to work for us. In fact, we may have to consider a hiring bonus. We must temper our expectations of long term loyalty. As one Generation Xer put it, 'If you want loyalty, buy a dog.' The Xers and Nexters are much more technically savvy. They carry laptops, are much more mobile and have a different value system.

A Human Resource Strategy is Key to Becoming Employer of Choice

A human resources strategy must be included in your corporate strategic plan. Make sure you have a Human Resources professional on your staff to deal with the sweeping changes in the workplace. This person must be a skilled, knowledgeable business partner. They must play a vital role in helping your organization become or remain competitive in the labor marketplace. Becoming the Employer of Choice begins and ends with your Human Resource staff. However, it is not their task alone. Every manager in the company, from the President to the warehouse supervisor, shares in that responsibility.

Where are you now?

Determine where you are today in relationship to becoming an Employer of Choice. What strengths do you have to build on? What are the competencies that you need to develop?

As an example, consider your company's current performance in the following areas. You may want to assign a score of 1-10 to each item and include a list of its strengths and weaknesses:
• Human relations leadership skills
• Commitment to treating employees as your most valuable asset
• Training
• Credibility of your management team and company vision
• Communication skills
• Decision-making skills
• Benefits
• Other employee related support systems

Create a Human Resource Vision

Once you've determined the current state of your human resource function you should create a vision of what your human resource competency should be. You must be committed to becoming Employer of Choice. Your vision must evolve around that commitment. It must be developed with intelligence, sound judgment, a willingness to step outside the box and, most importantly, a focus on your most precious asset - your employees.

The Human Resource professional must move from the 'back room' to the 'boardroom' if you expect to become Employer of Choice. Emphasis and focus must be placed on the importance of continuous progress and managing change through goal setting. Goals must be realistic, reasonable, challenging and attainable:
• Long term
• Intermediate
• Short term

Developing Your Human Resource Strategy

Once you have established your vision, the next step is to develop your human resource strategy. This strategy is the process by which you will achieve your vision of becoming an Employer of Choice. You must be committed to becoming Employer of Choice. Your strategy must evolve around that commitment, intelligence, judgment and one more time, it must focus on your most precious asset - your employees.

Do not let ego get in the way of judgment. Managers need to challenge old ways. You must be determined to create a culture where worth is determined by a willingness to learn new skills and adapt to change. You must create an environment that makes it fun to go to work. Do not measure how well you are doing, measure how much you have changed.

'In the years ahead, workforce stability will be a company's competitive sales edge. In these turbulent times, exacerbated by a tight labor market, employers will be continually challenged to locate, attract, optimize and retain the talent they need to serve their customers. The most successful employers will be those who legitimately inspire highly talented workers to join them and stay with them.'

Roger E. Herman and Joyce L. Gioia

How to Become An Employer of Choice

Adam Fein of Pembroke Consulting reports in Facing the Forces of Change that nearly 20% of the U.S. workforce will be 55 years old or over by 2010, up 13%. He states that baby boomers are aging and the situation will get worse. The 25-44 year old segment will decrease by another 6% to 26% by 2010. All these facts mixed together only heighten the importance of your Human Resource strategy.

The Human Resource Planning Process
• Clearly define Human Resources role in the strategic business plan. Set specific objectives, assign accountability and develop time lines for becoming employer of choice.

• Follow the planning process map:
- Develop performance drivers
- Develop recruitment and retention strategies
- Create a scorecard
- Define policies and practices
- Career counseling
- Coaching and mentoring
- Internship program
- Education and training
- Creative employee support (day care- job sharing etc.)

Make It Fun to Come To Work

The key to employee retention is not necessarily compensation based. It has been proven time and time again that money is not high on the motivational factor list. However, money can rise to the top of the list of complaints if an employee does not enjoy coming to work every day. When an employee really likes their job, environment and peers and feels they are well treated and respected, money becomes a non-issue in most cases.

There is a book called 1001 Ways to Reward Employees (Author, Bob Nelson, Workman publishing). I encourage you to order this book.

Human Resource is an Investment in Your Employees

Unleash yourself from the self imposed trap many of us have placed ourselves in by considering Human Resources a cost center. If you develop a definitive Human Resource strategy geared to make your company the Employer of Choice in your markets, Human Resource will become a profit center. Recruitment & Retention alone will create a tremendous return on investment to your company

Research shows that it costs between 50 - 150% of an employee's annual salary to replace them. This does not include their actual salary. For example, the cost to replace an inside sales person that just resigned could exceed $75,000. The cost to replace an employee includes costs for both recruiting and training the new employee plus the loss of productivity while the position is empty and even during the "learning curve". The exact cost depends on the level of the position and the current market demand for that position. However, consider having to replace 10 employees over the course of a year. Suppose the average salary is $40,000. The replacement cost of those employees would be as follows:

10 employees@ $40,000 = $400,000 X 150% = $600,000 and that doesn't include their pay. This is a phenomenal hidden expense.

Even if you use the more conservative statistic of 100% of salary, the cost savings would be four thousand dollars.

'This does not include the lost opportunity costs in the market place.'

Don't underestimate the power of your employees. Treat them with respect, gain their trust, invest in becoming Employer of Choice and you will release more discretionary energy, creativity and innovation than you can imagine.

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