Strategic views of staffing, retention and human capital (HR Manager's Bookshelf)

Play to your Strengths • Managing Employee Retention: A Strategic Accountability Approach • Talent Management Systems • A Manager’s Guide to Recruitment & Selection

Recruitment and staffing lie at the heart of the bigger picture of HR strategy and practices. The books reviewed provide solid research, theory and analytical approaches to some of HR’s biggest issues including:

•What is the meaning and importance of human capital and how can an organization go about building a competitive edge through its human capital strategy?

•How can retention issues receive the attention they deserve, and how can they best be tackled, given the extremely high costs and potential gains involved?

•Where does HR technology fit in the effort to strengthen recruitment, retention, workforce planning and overall talent management?

•How can managers be sensitized to the practices, risks and benefits entailed in the recruitment and selection process?

Play to your Strengths
By Haig Nalbantian, Richard Guzzo, Dave Kieffer and Jay Doherty
274 pages, McGraw Hill (2004)
ISBN 0-07-142253-6
Available from McGraw-Hill,
1-800-565-5758, www.mcgrawhill.ca


Here’s a stark question for business leaders and HR strategists: “Is the return you’re getting on your various human capital investments exceptional, marginal or negative? Unfortunately, that question seldom is asked and virtually never is answered. That’s why for many companies human capital is the biggest investment about which they know the least.”

This book, subtitled, “Managing your internal labor markets for lasting competitive advantage.” It deals with human capital strategy: management tactics, policies and practices that form a system — a differentiator among firms in an era when technology, financial and physical assets no longer offer a sure competitive edge.

A simple six-factor framework describes the human capital strategy (HCS) factors that affect business results:

•people;

•work processes;

•managerial structure;

•information and knowledge;

•decision-making; and

•rewards.

Emphasis is on specific organizational context. One company’s approach to human capital management cannot realistically be copied by others. This insight points to the limits of the value of benchmarking and best practices activity. What can be learned from random practices of other firms, without situating all the practices in the business environment, culture and realities of the particular organization?

The starting point for HCS analysis lies in three key questions:

•What is actually spent on human capital and what is it buying?

•Is it certain that the human capital strategy is aligned with the business design?

•What can be changed in the way people are managed to generate greater returns by cutting, reallocating or increasing investments?

The “tools” section of the book outlines internal labour market analysis, mapping and modelling, with a focus on three interrelated labour flows: attraction, development and retention. Who gets hired? Who stays? Who advances? Who performs well? What actually gets rewarded? How are rewards distributed? How is talent developed? Actual practices and their consequences, based on factual analysis, are under the spotlight.

A subsequent chapter lays out general steps for building an organization’s human capital strategy:

•know where the organization stands;

•project the future;

•find the value;

•close the gaps;

•design the interventions; and

•implement with accountability.

The applications section of the book is not a pragmatic guide to actions. Rather, it deals with high-level strategic considerations including the integral importance of people and human capital strategy issues in making corporate strategic shifts or acquisitions, the link between workforce management and customer behaviour or responses, and the allocation of risk between investors (in the form of lower returns) and employees (in the form of layoffs or reduced rewards) during times of economic difficulty.

Chapters on implications probe further the investor perspective: “Investors’ interest in human capital is increasing. Only a few companies have distinguished themselves in the disclosure of information about their human capital, how it is managed and the impact on business performance.” Existing attempts to measure and link human capital with shareholder return, such as indices developed by major consulting firms and the balanced scorecard approach, are shown to have limited efficacy.

No one really owns the human capital issue and the book explores the trend toward a greater role for the chief executive officer and finance. Of course, human resources has a special role to play as well, and the authors discuss the growing strategic understanding that HR has developed in some organizations. “Simply put, human capital strategy will become a shared responsibility of organizational leaders as attention to it expands.”

Near the end of the book, there’s a chapter devoted to managing personal human capital, moving toward self-reliance, a self-managed career and matching goals with an employer’s track record of delivering opportunities, development, progression and risk and rewards balance.

The authors are principals at Mercer Human Resource Consulting, and they provide a strategic, big picture discussion rather than a specific how-to guide. They address fundamental issues, problems and challenges and describe the new science of human capital management at a high level. Target readers include CEOs, senior strategists, chief financial officers and senior HR leaders. Most readers, however, would need to find expert help to take action on the book’s ideas.

Managing Employee Retention: A Strategic Accountability Approach
By Jack Phillips and Adele Connell 355 pages, Elsevier/Butterworth Heinemann (2003)
ISBN 0-7506-7484-9
www.bh.com


Jack Phillips is a prolific researcher and author of several books on measurement, accountability and return on investment (ROI) in human resources, training, development and performance improvement. Here Phillips and co-author Adele Connell take a systematic, analytical and strategic look at retention and turnover — huge, growing concerns in employment circles, yet, “one of the most unappreciated and undervalued issues facing business leaders.”

They begin with these observations:

•all stakeholders involved in the issue, including human resource managers, underestimate the true cost of employee turnover;

•the causes of turnover are not adequately identified in most organizations;

•the solutions to reduce turnover are sometimes mismatched with the cause of turnover and do not generate the desired results;

•many of the preventive measures for turnover are either overkill or they often miss the mark altogether; and

•a process to measure the success of retention solutions and place a monetary value on managing retention does not exist in most organizations.

The substantial negative impact of turnover, to both the organization and the individual, is explored along with common myths including: turnover is just a cost of doing business, turnover is an HR problem, the manager’s role is minimal, turnover is out of the organization’s control (it’s an industry problem), and throwing money at the problem will solve it.

The bulk of the book is built on a strategic accountability approach to managing retention with the following eight steps:

•measure and monitor turnover and retention data;

•develop fully loaded costs of turnover;

•diagnose causes of turnover;

•develop solutions related to recruiting new employees;

•establish an appropriate work environment;

•create equitable pay and performance processes;

•build motivation and commitment; and

•match solutions to needs.

These steps involve a lot of analysis, research, planning and decision-making to find policies, practices and approaches that stand a good chance of working. The book also outlines methods of forecasting the value of retention solutions and calculating the ROI through an evaluation framework. It’s a never-ending challenge, and a separate chapter is devoted to making adjustments and continuing to track results to maintain a low turnover rate.

Readers will find models, tools, checklists and trend charts for use in addressing the retention issue. The book presents a challenging and optimistic framework for reducing turnover and its associated costs in monetary, performance, productivity, quality, morale, satisfaction, reputation, health and stress terms. It is realistic, however, in laying out the hard work needed to find meaningful improvements.

The final chapter presents a case study featuring a bank facing merger and integration problems, and experiencing annual turnover of 57 per cent compared to a 26-per-cent industry average. A related title, Retaining your Best Employees, presents action case studies (author Patricia Pulliam Phillips, ASTD Press, ISBN 1-56286-320-7).

Talent Management Systems
By Allan Schweyer
253 pages, Wiley (2004)
ISBN 0-470-83386-6
Available from Wiley Canada,
1-800-567-4797, www.wiley.com


HR technology to support staffing, skill development, assessment and other needs is rapidly expanding and evolving. This book explains “the transformation web-based technologies have brought to workforce acquisition and management. It examines proven and leading-edge best practices that can improve your organization’s ability to expertly attract, recruit, motivate, develop and retain staff.”

Introductory chapters look at the “new primacy of talent” and its impact on organizations. Can talent be managed as a resource? How are trends playing out in demographics, competition for foreign skilled workers, retention and deployment? There’s also an overview of best practices in technology-enabled talent management, as well as key steps in selecting a vendor. The final chapter of the book examines usability, implementation, data security and reporting.

Specific chapters address the bases the HR function must cover in building an integrated approach:

•corporate career sites;

•talent management systems solutions and vendors;

•screening, sorting and ranking job applicants;

•searching and candidate sourcing;

•workforce planning;

•legal, ethical and fairness concerns in e-recruiting;

•contingent, contract, temporary and hourly workers; and

•outsourcing.

Schweyer developed e-recruitment solutions for Human Resources Development Canada (now Human Resources and Skills Development Canada) before moving on to new roles including co-founding the On-line Recruiters’ Association of Canada and the position of executive director of the Human Capital Institute in Washington, D.C.

A Manager’s Guide to Recruitment & Selection
By Margaret Dale
325 pages, Kogan Page (2nd ed., 2003)
ISBN 0-7494-3896-7
www.kogan-page.co.uk


This United Kingdom publication gives a thorough, systematic tour of the subject “for all busy managers who are responsible for recruitment at any level. The book clearly shows that successful recruitment is a two-way process involving both employer and employee. Emphasis is placed on the fact that many of the actions involved do not require the highly developed skills of an experienced practitioner. They do, however, require thought, planning and preparation.”

Topics include:

•job descriptions, expectations and work design;

•marketing and recruitment to attract the right person;

•methods used in the application and screening process;

•selection methods, errors, bias and decision-making;

•employment offers and negotiations;

•induction, inclusion, probation and training; and

•evaluation techniques and outcome measures.

Rather than a quick reference guide or source of ready action steps or tips, the book provides thoughtful background on each aspect of staffing. It could serve as a useful primer in sensitizing managers to the objectives and implications of recruitment, or as a kind of textbook for those beginning a career in HR. There are occasional references to U.K.-specific practices and public policy.

Ray Brillinger is a certified management consultant who works with clients on organizational change, HR strategy and performance improvement. He can be reached at (905) 547-8193 or [email protected].

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