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The Hard Side of Human Resources

The soft side of people management will always be a major part of the human resource role, but many organizations are realizing that human resources have a major part to play in the financial side of business as well. This is a trend that began in the 80’s and 90’s as companies tried to deal with the dual challenges of managing growth and downsizing or reducing staff in some parts of their operations. Today, as companies and organizations plan for the future, they wouldn’t dream of moving forward until they have a human resource plan to accompany their marketing and communications initiatives.

Philip H. Gennis,
Vice President,
Recovery &
Grant Thornton
Human resource professionals have learned to become “profit centres” by developing systems, models and matrixes to measure and report on HR performance. They have been asked by senior management to help track workforce productivity and to improve the ratio between the dollars spent on employee costs (wages, benefits and overall HR expenses) and overall company revenue. At the same time they continually monitor employee satisfaction and engagement with employee productivity in order to ensure that managers don't abuse or burn out their employees.

The modern human resource professional has learned to balance people management skills with the hard data and analysis that organizations need to develop business plans and increase their profitability. They have also learned that it is much better to be at the decision-making table than to wait at their desk to hear about the latest budget cuts. And that it is a lot more effective to be there early in the process rather than later on.

So how does HR get to the corporate boardroom? The answer is simple. They get there because management cannot afford to make decisions without their input, and they get there because they have done their homework and made a business case for human resources. HR representatives who are sitting in on the senior planning exercises as full partners have earned their seat at the table by consistently developing strategies and solutions that focus on the bottom line. When they go to these senior level meetings they mean business and they bring their calculator to prove it.

As managers rely more and more on human resources as full partners in the management of the organization and as HR experts prove their value to the bottom line these trends will not only continue but grow in the future. The human resource community will have to keep up by developing new skills and continuing to add value to the enterprise. It’s time for human resource professionals to take their seats at the management table as full partners and key strategic leaders. This will mean changing the dialogue and direction of human resource discussions.

The new discussions should begin with a focus on results and the bottom line and provide evidence as to how better people management can lead to better overall results. It should also involve developing new alliances and partnerships between the sometimes disparate parts of organizations and using technology to promote innovation and success, and helping translate employee needs into language that managers can understand.

The modern human resource professional should be seen as part of the solution in any problem that arises and should be ready to provide suggestions and strategies that can lead to both short and long term success. This will be particularly important when it comes to developing recruitment strategies for hard-to-recruit areas, and to bringing more young people into the organisation. HR leaders will also be asked to help ensure that the management cadre has the on-going leadership support and mentoring they need in order to deliver the organization’s mandate. Unless HR takes ownership of this important developmental role on behalf of senior management the organization may grow for a while but the leaders will become stagnant over time.

Today and into the future human resource professionals will need an arsenal of skills in their personal toolbox to ensure their individual and corporate success. These will, of course, include a solid steeping in modern human resource management but they will also need a set of tools that the personnel office never even dreamed of.

MQ approached one of our leading financial experts for comment. Philip Gennis, Vice President, Grant Thornton Ltd., confirms that “HR leaders need to be able to read and understand a balance sheet and financial statements, budgets and projections. They need to be able to analyse and report on quantitative and qualitative data regarding the people side of the business and be able to comprehend similar reports from areas like production, marketing and communications. Finally, as they report at the senior management table about their areas of responsibility they also need to be able to provide risk management advice to the business leaders about the potential downside of hiring, firing, and retention strategies.”

The challenges for the HR manager of the future are both immense and exciting, but the rewards in professional development and increased profile will be well worth the effort.

MQ Staff Writer

NOTE: Philip Gennis will be presenting on “The Hard Side of HR: A Financial Management Toolbox” at the IPM National One Day Conference in Toronto on May 14, 2008. For more information, please click here.

Making Diversity Work

There is growing recognition that workplace inequities have the potential to impose significant economic costs on employers and society in terms of untapped talent, reduced/lost competitiveness, productivity and profitability. In today’s globalized world, where competition for scarce human resources is and will continue to be intense, employers need to harness the talent of all workers in order to gain a competitive advantage. According to McKinsey & Co., North America can expect to experience a war on talent based on an estimated 33% rise in the demand for talented employees over the next 15 years and a corresponding 15% drop in supply. The pressure is therefore on for employers to be more strategic in how they hire, develop, promote, and retain employees.

Jennifer Smith
JLS Management
Consulting Inc.
Diversity refers to everyone – it is based on the premise of inclusivity that values differences based on attributes including personality, age, family status, sexual orientation, culture, religion, ethnicity, and rural/northern/urban origins. As a leader, it is essential to create a diverse workplace; not only is it the right thing to do but also it makes good business sense. Unfortunately, barriers to diversity are often hidden both within society and organizations. Not only is it masked in the organization’s policies and practices but also in the culture and attitudes. For example, managers and leaders often hire in their own likeness. Identifying and removing these barriers takes time but the rewards they bring to your organization and employees by introducing greater workplace diversity are worth the effort.

Here are some key questions to ask in assessing how diverse your organization is:

Is your workforce truly diverse? Is it representative of the broader workforce?
  • If no or if you are unsure, conduct an informal or formal assessment of your workforce to better understand the gaps in terms of representation and the challenges faced by employees from different groups. With access to new online survey programs this process can be quite simple and efficient. At the same time, sample labour force surveys and supporting tools are available.

    Do your corporate policies support the needs of a diverse workforce?
  • Are there polices in place that might restrict equal opportunities in employment, such as height and weight restrictions, ability requirements, unnecessary knowledge/experience requirements for the job? Do corporate policies accommodate the different needs of your staff? This might include religion and persons with disabilities, flexible work arrangements for those balancing work and family demands or pursuing professional development/continuing education. Investigate ways to provide the greatest range of flexibility in terms of work arrangements (job sharing, telework.) and benefits to meet varying individual needs such as child/elder care, vacation time, insurance needs.

    Do those responsible for hiring have a high cultural competence/understanding?
  • Do they understand the strategic and practical importance of a diverse workforce? What kind of training have they received to understand how their own background/value systems influence their personal judgments and decisions?

    Are supports and networks in place to help people integrate into the organization – particularly those who are different from the majority?

  • These would include welcome committees, diversity advisory committees and mentoring programs.

    Critical Success Factors

    What follows is an overview of factors that have been found to be critical in supporting diversity in the workplace:

  • Leadership: Senior management needs to provide strong strategic direction and commitment to workplace diversity on an ongoing basis. Leadership from the top is essential in influencing employees and their acceptance of diversity in the workplace and achieving the required cultural change. Be sure to engage management – ensure they demonstrate a commitment both in terms of what they say and in terms of their actions.

  • Accountability: Hold managers to account for supporting diversity objectives. The importance of the role of managers in creating inclusive workplaces has been well documented. Accountability can be assured by linking pay to equity/diversity goals and/or providing the necessary diversity training to ensure managers have the required attitude, skills and knowledge to achieve these goals.

  • Integrated Planning: It is essential that HR and equity or diversity planning are integrated into your business planning process. Not only is it essential from a business perspective but it will also ensure that critical workforce requirements are assessed at the planning stage, particularly in relation to the achievement of business priorities.

  • Communications: Ongoing internal and external communications are key to raising awareness, creating buy-in, and ensuring proper implementation. Providing information has been repeatedly demonstrated to be critical to employee understanding, support and acceptance of diversity.

    Organizations that approach diversity as a fundamental human right and as a positive principle of management will benefit from fully utilizing the diverse skills of all members of the workplace. As competition for employees intensifies, organizations which create inclusive, supportive and diverse work environments will have the upper hand in winning the war on talent.

    Jennifer Smith is President of JLS Management Consulting Inc.

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