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The importance of resource management – featured article


QikkerIn this featured article written by Dave Inman, Business Development Director, Qikker Solutions Ltd, the author looks at why using systems to manage the resource you have is the key to retaining your key employees in these difficult times.

We all know that a caring employer is the Holy Grail – but how many employers match up to that ideal? A recent report from employment lobby group The Work Foundation shows that it’s not just poor pay, long hours or being passed over for promotion that makes employees leave – now they also want to work for employers that are ethical. The research claims that companies that fail to act responsibly will have a difficult time holding onto talented staff.

At a time when most companies are struggling to stay in profit, resource management might seem like a luxury, but you could argue that it’s even more important in the bad time than in the good times. This is precisely the time when you want to hold onto your best staff and you don’t just need to know what will make them stay with you but also which people you want to stay. According to the Chartered Institute of Personnel and Development (CIPD) Labour Turnover Survey 2002, almost half of organisations surveyed (47%) made redundancies in 2001, the same as for 2000. However, the proportion of respondents that operated a recruitment freeze climbed from a quarter in 2000 to almost a third (32%) in 2001. The average cost of labour turnover in 2001 was £3,462 per leaver and among managers at £5,699 per leaver – and many companies might find the process costing far more.

With the competition to attract and retain the best talent rising, and the employment pool shrinking, what is required is a new ‘proactive’ approach, where HR and line management are freed up to focus on people rather than paper and where qualitative information is available to provide resourcing decision support, ensuring that the right people are in place to deliver optimum results.

Most respondents (67%) reported that labour turnover had a negative effect on the performance of their organisation and 69% that they had experienced recruitment difficulties – even more reason to ensure that existing staff are measured and valued appropriately. It is essential to do this to help manage, motivate and retain valuable staff cost effectively. Building a picture of current staff capabilities and aspirations that is contained within a corporate ‘talent pool’ – a measurable and manageable source of available talent to the business whether staff, contract resource as well as potential ‘prospects’ – is invaluable.

For example, it might seem odd that a company whose share price is at rock bottom and has made redundancies would give employees bonuses. However, when times are tough it’s even more important to hang on to good staff(your ‘talent’). “Compensation experts argue that paying for performance is more important in a down economy than in the boom times,” says Steve Bates in American publication HR Magazine . “Companies need a compensation system that catches a top performer’s attention and sends a signal to a poor performing employee. To do this the system must differentiate between the two.”

And therein lies the challenge: how to manage your resource effectively enough to let you know who’s performing and meeting their goals – and who isn’t. Traditional recruitment and resource management processes require too much low value administrative work; do not support co-operation between HR and line managers; and do not facilitate easy communications with resources. The result is that there is not enough focus on people. However, it’s important to remember that HR departments are “essentially managing the biggest cost centre that most organisations have,” says Jay Schuster of US consulting firm Schuster-Zingheim and Associates. “This is without a doubt the most incredible opportunity in a decade for the profession to demonstrate its value and create a whole new generation of HR Professionals.”

The CIPD agrees. Its Evaluating Human Capital report published at the end of last year explores one of the most intangible assets in today’s economy – the knowledge, skills and initiative possessed by employees and emphasises the importance of measuring the benefits that people bring. As Duncan Brown, the CIPD’s Assistant Director General says, “We know that city analysts place a premium on good management – and good people management must be fundamental to this.”

The CIPD says that organisations need to better understand and put in place key measures of the value which people add to the organisation, such as skills and qualifications, labour turnover rates, rates of innovation, the extent of teamworking and key employee statistics in areas such as employee attitudes and demographic composition. The research shows that organisations still do not fully understand how to adequately value human resources.

As Brown comments, “If organisations were as poor at identifying and reporting on any of the major resources at their command, their stakeholders would express immediate concern.”

This is why it’s important to proactively develop and retain your best people to ensure that the right skills, competency and experience are available at the right time. Companies are starting to recognise the need to be more proactive in the management of its people, and the need for speed. Traditional approaches require too much administrative and communication overhead such as shuffling paper or juggling e-mails. The good news is that systems are now available which capture staff skills, competency, experience and accomplishment information as well as further qualitative staff information such as surveys and appraisals.

Traditionally it has been difficult to measure skills and competencies. Both paper based and more recent ‘first generation’ web based systems require too much data entry overhead in just capturing basic details to allow the capture of additional information. This is typically the important information that enables the right resourcing decisions to be made. A system with easy data capture, using self service wherever possible, combined with a customisable library of skills and competencies enables far richer staff information to be built – supporting far more efficient resource management processes.

Improved resource management processes benefit organisations by:

  • Improving resourcing decisions – for example whether to employ permanent or contract staff
  • Enabling continuous proactive recruitment, ensuring access to a targeted pool of appropriate, pre-screened, talent
  • Allowing skills gap analysis that supports training and personnel development
  • Improving relationships with contract resources leading to greater effectiveness
  • So why aren’t more organisations putting in place effective resource management systems? After all, you can’t control what you can’t measure!

    Dave Inman can be contacted at [email protected]

    More information on Qikker can be found here.

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