Why HR? Why now?

T. Vijayabaskar, Management Department Eastern University Sri Lanka

Generally in all organizations there are two types of resources being used. They are human resources and physical resources. Between these resources HR is vital for organizational sustainable competitive advantage.

Since among four Ms that is to say, Men, Material, Machine, and Money men has been most important factor. It is impossible to find a business process without men because HR has the skill to bring forth and coordinate other resources into business activity to achieve goal of an organization.

Why HR reckons as a power packed resource than other resources is because of its uncompensatable and inimitable knowledge. One of the prominent Economists ‘Lester thurow’ said that, the ‘Dominant competitive weapon of the 21st centaury will be the knowledge of the workforce.

The American Business Week recently released a survey of the Top 50 CEO’s. One of the questions they asked was, ‘What are the key components that produce success in a company?’ The number one response was “The best people and development strategies.”

The issue of recruiting, developing and retaining key employees is becoming a critical operating problem for all countries.

Moreover according to the manpower planning made by America in 2006 clearly revealed that the 40 percent of the nearly thirty-three thousand employers in twenty three countries are struggling to find qualified candidates.

Those costs will escalate over the next decade. Moreover from one another survey statistics of Smith in 2007, it came to know that “for every ten minutes a Baby boomer is retiring” and it will increase to more than 75 million in 2011.

Hence, with the average age of the working population increasing, with a higher percentage of the workforce retiring and the declining birth rates in many nations, including our own, the current state of the workplace is indecisive at best.

Most organizations are now at risk of having their valuable knowledge and skills sail off into the “retirement sunset” with little or no strategic plan, process or goals in place to “restock the lake.”

So now the organizations have to form some sound strategies to find out the right talent and to retain them for this purpose talent and human capital management increasingly is becoming a competitive differentiator.

To get ready for the future battles in the war for talent, leaders must think about human capital and talent management in a systematic way.

They will need to integrate this planning into their overall business strategy.

After a challenging period like 2009 in which year the whole world has been confronted by the global economic crisis, it is the imperative responsibility of all HR personnel to restore or bouncing back the declined businesses not only to former position but also to the position through which the business can face any global challenges.

Even during the recession while all other components of an organization are struggling with the recession only HR could stabilize the businesses somewhat by its tremendous knowledge and skills.

How your HR can response to economic crisis?

Whereas many people talk about this economic crisis, very rare people said about what managers and leaders in an organization want to do during this global economic crisis in which they said that HR will play a key role in changing the mind-set of all employees as to face any challenges during this critical time.

There is a human capital leadership council in ‘Hewitt Associates’(providing HR consulting and outsourcing services more than 65 years) in which there are numbers of HR leaders from various companies have proposed ten strategies that HR can use to respond this crisis.

1. Be ruthlessly focused

Redefine priorities based on today’s realities. Sharpen the organization’s strengths and core capabilities. Define the ‘Efficient Border’ decide what investments will yield the largest savings and future returns. Agree to stop activities that no longer make sense in the current environment.

2. Don’t lose sight of opportunities

History has shown that great wealth can be created in times of turbulence. Most executives intimately understand their current reality - and build comprehensive plans to manage the risks. Visionary leaders also seize the unexpected opportunities - whether acquiring undervalued assets or recruiting previously untouchable talent.

3. Maintain transparency, openness, authenticity, and consistency

These practices are especially important during tough times. Employees need to see their leaders out in the trenches; sharing plans, setting priorities and speaking the truth. HR can lead the charge by coaching the CEO and other leaders on the issues on their employees’ minds. They can also confront actions and behaviors that are inconsistent with the message.

4. Focus on a few key themes

Leaders sometimes overwhelm their audience’ too much information, too many themes. It is important to focus employees on the “critical few” things that matter right now and continually reinforce these messages often.

5. Align actions and share sacrifices

In times of crisis, leadership teams need to be more aligned than ever in both actions and messages. But often the added tensions create more fragmentation: splitting business units further apart, pitting higher performing units against others. In addition, and tied to alignment, if employees are being asked to sacrifice, then executives need to do the same.

6. Engage employees in solutions

Resist the temptation to move to a “Command and Control” mentality. Provide opportunities for input and for employees to own the solutions. Explain what is in it for everyone if the company can successfully navigate from the downturn back to growth and profitability.

7. Tighten timeframes for accountability

Business cycles and market cycles are shorter and faster. Leaders need to pick up the pace to keep up. This means reviewing alternatives and take decisive action quickly. Leaders also need a strong “early warning” system and solid measures to ensure actions are taking hold.

8. Pay attention to and upgrade your talent

It is all too common for organizations to fail to pay attention to their best people. The high-performers are the ones that will help weather the storm and drive recovery. Now is the time to make sure that top talent knows they are important and valued. At the same time, there is no better opportunity to assess your bench strength and selectively hire to upgrade talent.

9. Understand what employees value

Total employee cost is one of the biggest line items and needs to be aligned to revenues. Employee costs are too often managed with quick, but shorter-term, instruments such as layoffs and pay cuts. Consider other approaches that will reduce costs and position the company for recovery such as implementing alternative work and part-time arrangements or reallocating total rewards.

10. Strengthen the culture and the brand

How the organization responds to adversity defines who it is and what it stands for to employees, customers, and to the community at large. The decisions a company make and the way it implements them provide both an opportunity and a significant risk. As you are making critical decisions in response to the economic crisis, carefully consider the impact those actions will have on your culture and brand.

HR Managers need to be strategic leaders and change agent instead of traditional administrators:

HR managers’ focus less than one-third of their time on strategic HR activities. The majority of their time is spent on managing the day-to-day traditional activities. Latest research shows that when HR professionals transform their roles and act strategically, improvement is seen in overall organizational performance as profitability, net sales per employee, employee retention and attitude customer retention rates and the rate of return on assets improve.

For creating strategic leadership following HR strategies and activities are required.

* Introduce model learning and leadership development by cultivating and improving analytical and strategic business skills.

* Enhance and expand educational opportunities for the employee. -Create evaluating environment that rewards effort, initiative and talent.

* Provide clear job descriptions that support overall organizational goals and objectives.

* Transfer the role from administrator to an internal consultant for advising other corporate executives on leading and developing their subordinates.

* Train them with all types of jobs (job rotation) so; the organizations can manage some tight situation like this global crisis with these employees.

Therefore, all organizations who want to understand the weight of HR role and must have a sound talent management system to keep them with the organization.

If organization in the attitude of ‘don’t worry you have a job security here with all facilities forever” towards employees, the employees also will be in the attitude of “be happy I show up my best forever” towards the organization. Even other resources give competitive advantage, only HR gives sustainable competitive advantage to the organization. Therefore rather than retrench the HR, it is far better to invest on the right talents to manage and take advantages of this type of crisis.