New research shows that many firms don’t ‘know’ their staff. Andrew Binns CEO of workforce consultancy
Netengines, highlights the risks of overlooking your skills base
Ask yourself a couple of questions – how much do you actually know about
‘What’s his name’ who works in finance? And that woman who recently joined to
work on business development?
If your firm’s answer is not much, you are not alone. Up to 2.4 million
workers are technically ‘missing’ at the moment. That’s the equivalent of the
combined population of Birmingham, Glasgow and Leeds. They are missing because
one in five employers cannot say exactly how many people work for their
organisation; half do not know what skills or qualifications their staff hold;
and three in five cannot tell you accurately how hard employees are working or
if they have capacity to take on more. And two in three businesses admit this
is hurting business – but, remarkably, they don’t plan to do anything about it.
A poor picture. And one that only leads to ineffective use of any business’
main assets – people. Bad people management adversely affects costs, staff
morale and motivation, and jeopardises future staff resource planning.
Each employee is an individual. But without knowing what their skills are, a
business cannot hope to get the most out of employees.
This leads to employees feeling devalued and unchallenged. If they feel
their skills are not being used, they will start to feel demotivated. If you do
not make the most of them, they will not make the most of themselves.
Similarly, within large organisations there are always vacancies waiting to
be filled. HR managers report great difficulties in filling these vacancies
with permanent staff – over half say they often cannot find the right people to
fill the gaps. This often results in key positions remaining unfilled for
lengthy periods of time, or being temporarily filled using expensive
contractors or freelancers.
These recruitment problems take place against a backdrop of increasing
pressure from the finance department to keep costs down. Over half (57 per
cent) of HR managers in the UK report that one of the objectives they have been
set by their board is to reduce spending on recruitment.
But can HR people look in the most obvious place for recruits – internally?
No, not if they don’t know what skills their staff have. They cannot
effectively identify people within the organisation with the necessary
experience and ability to carry out a role which needs filling. Two in three
companies report this difficulty affects their ability to re-deploy staff – despite
needing to in the current climate.
Perhaps the most dangerous knock-on effect of this lack of knowledge on
staff and their skills is the difficulties it causes for resource planning.
Particularly in these difficult trading times, when more redundancies are
announced every week, businesses need to be able to make informed decisions
about who to let go and who to keep. Without knowledge on what skills staff
have or what contribution they are making, employers risk laying-off staff who
actually perform essential roles. So the irony of redundancy rounds, instigated
to cut costs, is that they can end up costing an organisation more money in the
long-term, as essential staff have to be re-employed again once the importance
of their role is recognised.
What businesses need to do is to manage their main assets as they would any
other resource – by knowing what they have got and where it is. There are HR
planning tools capable of matching existing employees with vacancies, or
holding real-time and easily accessible records of skills and qualifications so
that employees can be assigned tasks which use their abilities to the full.
Only with better understanding and management of human capital can
businesses make the most of their best and most important assets.