Developing HR strategy: Planning for success

In the fifth part of our report on the backbone of HR strategy, Keith
Rodgers investigates organisational development and finds workforce planning is
critical to business success

It is always disconcerting when practitioners at high-performing, employee-centric
organisations confirm your worst fears about HR strategy. But the recent
experiences of one large, multinational pharmaceutical supplier do just that,
demonstrating that one of the key components of strategic resourcing –
understanding what skills and experience levels exist within your company – can
be a major challenge. It took the company two years simply to finish a pilot
programme defining 10 core competencies within its employee base – and that was
only a one-country project.

Yet while competency definition can be a daunting task, there’s no doubting
the benefits strategic resourcing can bring. Encompassing a range of activities
from workforce planning to recruitment and the creation of employer ‘brands’,
it is one element of HR strategy that has an immediate impact on organisational
ability. If human capital management is fundamentally about leveraging employee
talent, then the starting point is identifying, acquiring or transferring the
right people to the right positions.

The following are the four key issues that need to be considered:

1. Resourcing and business strategy

In most organisations, recruitment is usually an automatic or reactive
process – someone quits and their job is filled, someone screams loud enough for
help and they get extra resources. While companies may be more strategic in
planning new initiatives – like entering a different regional market or
launching into new product areas – they rarely have time to assess their entire
workforce and establish how effectively it underpins their business strategy.

Workforce planning, however, is equally as critical to business success as
financial budgeting – in fact, it is part of the same overall process.
Corporate objectives should drive resourcing decisions, dictating where new
skills need to be developed or acquired. At the same time, workforce capability
should inform the strategic planning process – not just because it imposes
limits on what a company can achieve, but also because it may shed light on talent
that is being under-utilised.

Strategic resourcing should, therefore, be carried out in the context of
three core factors:

An understanding of corporate ethos and values

These provide the broader framework for the kind of organisation that exists
(or more often, is evolving)

Overall business objectives, set at corporate and departmental level

By cascading goals down throughout the organisation, companies can ensure
the resource decisions they make at a local level are in line with overall need

The capability of the existing workforce

This sets the parameters for corporate development and provides the core
information for strategic recruitment

2. Defining resource requirements

Before they can plan and predict their future resource needs, organisations
require a comprehensive understanding of the talent they already have on board.
HR functions frequently find this part of the resourcing process daunting,
primarily because they are often working from scratch. While they might have
introduced job descriptions for each role and carried out formal individual
appraisals, it is highly unlikely the data will have been collated centrally to
provide the aggregate data required for effective planning.

Competency profiling is one approach to tackling this problem, although
critics argue that in many instances it adds to the difficulties. While it
takes different forms, in essence, the process is straightforward.
Organisations typically define a set of broad competencies for each job
category: these may be refined by departmental managers to suit specific roles,
and are then used as a platform to measure individuals. In this way, attributes
such as integrity are judged alongside skills, working experience, training
undertaken, projects completed and so forth.

While this kind of programme can be used for individual performance
management, data is also collated centrally to provide managers with aggregate
information about where their workforce capability really lies and a common
framework to compare different departments.

As the pharmaceutical company mentioned earlier demonstrated, however,
gathering this information can be an exhausting process. Because it brings a
degree of standardisation to ‘softer’ measures, it can also lead to ‘religious
wars’ as managers debate relative values. The key is in the execution. As
Cheryl Fields Tyler, vice-president of consulting at the Concours Group, points
out, profiles can be a useful lens for understanding skillsets – the problems
come when they are used as enforcement mechanisms.

As an alternative, Fields Tyler suggests organisations can get effective
results by analysing data they already hold. For example, many companies grade
employees during regular performance reviews on a simple 1 to 5 scale, data
that can be relatively easily collated and assessed to root out high and
low-performing teams. Another option is to bring managers of different groups
together for talent review sessions, where team member performance and
potential can be mapped on a simple grid basis.

Where relevant, the resourcing process should also take account of turnover
and absenteeism. While turnover data can be useful at an aggregate level – for
example, as a predictive yardstick in high-volume, high attrition sectors such
as call centres – individual attrition through factors such as retirement can
be critical in succession planning for specialist roles. Absenteeism rates are
often only examined for disciplinary reasons – in high-volume operations,
however, they will have a significant impact on resource requirements.

Software applications do exist to support this kind of analytical activity,
and most recently the leading HR vendors have released strategic tools for
workforce planning and modelling. While take-up of these applications is
relatively low today, they do provide the kind of functionality for workforce
analysis that is taken for granted in traditional financial and business
planning applications.

3. Brand development

The concept of building an employer ‘brand’ isn’t new, but it is becoming
increasingly important in the resourcing process. Just as consumer brands are
designed to attract particular customers, provide quality reassurance and
influence loyalty, so employee brand is a key element in recruitment and
retention.

While most senior management teams will believe they have created an
internal and external brand, there’s often a mismatch between their view and
the perceptions of employees and applicants. Organisations would do well to
poll both potential recruits and existing staff to understand what those
perceptions and aspirations are, and this should form the platform for a
committed brand creation programme, launched with the same dedication as a
consumer marketing exercise. It is critical that this is not just an HR
exercise – it has to be embraced by every manager from the CEO down.

It is worth bearing in mind that brand image can backfire. One large
financial services firm, for example, discovered that employee satisfaction was
surprisingly low at one call centre. Research showed that many employees joined
that operation because it serviced a well-known, sought-after brand they were
proud to be associated with. When they realised their roles were no different
from any other service centre, morale slumped.

4. Internal and external recruitment

HR has traditionally measured its recruitment prowess in metrics such as
time-to-hire, but the changing nature of the market means that new priorities
are emerging. In particular, online recruitment is empowering line managers to
take more control.

While there have been ominous murmurings about HR being excluded from much
of the recruitment process as a result, the reality is that relative roles will
evolve according to need.

What is most important is that roles and responsibilities are clearly laid
out. In addition, it rarely makes sense for the internal recruitment process to
be fundamentally different from the external – that is only likely to confuse
the managers involved.

More generally, the recruitment process can have a direct impact on
organisational flexibility.

As managers assume more responsibility for recruitment, they need to be
aware that there is an enormous difference between recruiting an individual to
a specific role, and recruiting them to the overall organisation. The former
tends to reinforce departmental hierarchies, implying that this is the starting
point for career progression within that unit. The latter brings people into
the organisation as a whole and should encourage freer movement within it.

Taking a corporate perspective also brings economies of scale – rather than
three departments running individual adverts, one large corporate advert is
cheaper, more impressive, and more likely to enhance the overall brand image.

Tearing down the departmental silos

The way an organisation describes its
jobs and roles wouldn’t normally be that significant, but at Hampshire County
Council (HCC), it is indicative of a number of strategic changes taking place
in its people management practices.

While traditional job descriptions tend to list a series of
tasks, HCC is employing statements of responsibility that define more broadly
what individuals are accountable for. The reasons are both tactical and
strategic. At an administrative level, it means role descriptions don’t need to
be changed if, for example, an employee takes charge of more people – the
difference between making someone "accountable for the management of their
team", and listing direct reports.

More fundamentally, however, this approach also allows it to
create job ‘families’ that span different departments, built on common
competencies and accountabilities. As Rita Sammons, county personnel and
training officer, points out, this commonality opens up opportunities for
employees to move laterally to roles within their comfort zones, rather than
merely focus on career paths in their own department. In effect, these role
profiles not only provide the basis for initial recruitment decisions – they
also help tear down departmental silos.

This move towards ‘role profiling’ at HCC is one of several
resourcing initiatives under way, including a formal workforce planning
programme. Carried out on an annual basis, this takes the shape of a structured
review of workforce need, using a range of data including turnover analysis and
absentee levels to build a detailed one-year plan and a broader two-year
programme. Supported by the implementation of an IT system from SAP, the
council’s aim is to strengthen people management across the organisation by
giving managers easy-to-use analytical information.

Having built a balanced scorecard that identifies its key
values and behaviours, the council has now begun to define the competencies
that it needs to achieve its business outcomes. They are broken down into three
categories:

– Leadership. The council is about to launch a programme to
assess leadership within the top four tiers of the organisation, using
customised versions of standard leadership definitions. The process includes
360-degree assessments

– Core competencies. HCC is defining broad competencies
covering key factors such as people management and best practices, which
provide a framework for individual targets to be set. As Sammons acknowledges,
picking half a dozen targets from the vast number of metrics that can be
deployed within local government isn’t easy, and identifying strategic targets
that really make a difference is just as tough. For the first group of
corporate managers, the process is expected to take around three months

– Building a series of technical and professional competencies

In the meantime, HCC has begun talking with recruitment
specialists to work out how to position itself externally, using the values and
behaviours in its balanced scorecard as a key element in defining its brand. It
is also looking at its recruitment processes, which are currently carried out
on a departmental basis – as it attempts to meet the demands for joined up
government, so it hopes to consolidate common recruitment campaigns on an
enterprise level.

Ultimately, Sammons is keen to bring more flexibility to the
whole recruitment process. Currently, the council can only hire if there is a
suitable vacancy – she would like to have a looser structure that allows the
authority to create room to bring in talented individuals where appropriate.
"Everyone understands this in theory," she says, "the tricky
thing is how to do it in practice."

Take-home points…

1 Corporate objectives should drive resourcing decisions

2 Before planning and predicting future resource needs,
organisations need a comprehensive understanding of the talent they already
have on board

3 It is essential that any brand creation programme is embraced
by every manager from the CEO down

4 Roles and responsibilities must be clearly laid out

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