People are the Greatest Asset

This short article from Business Week discusses how serious companies are about employees being their its best asset. Many of the readers of my blog have seen my presentations about the view that the only long term sustainable competitive advantage is your people. As part of this concept, the HR department needs to be elevated to status of a profitable business unit . . . it has been interesting to see that in several major organizations, a successful business unit person is being "promoted" to head of HR without any previous HR experience (look for this trend to continue). Remember, on average 40% of the expense line of a business is related to people and this is the organization's most important investment (yes, I said investment NOT costs). This article has several points on HR "upping their game" and thought it interesting to share. Where does the HR department rank within your organization?

http://www.businessweek.com/managing/content/jul2008/ca20080717_668877.htm?chan=rss_topStories_ssi_5

6 Signs You Don't Care about Workers
How to gauge whether your company's happy talk about employees being its best asset has any basis in reality
by Liz Ryan

It has become a sad cliché: "Our People are our Greatest Asset." That hackneyed phrase doesn't mean anything in particular, so it's an easy bit of boilerplate to stamp on hallway posters and marketing brochures. When certain employers do elevate their talent-retention and team-welfare initiatives to the level of strategic priority, it's obvious.

Google (BusinessWeek.com, 10/25/07) (GOOG) is a hot stock, but it's even hotter as a desirable workplace because of the attention paid to hiring and keeping the best folks on board. When companies talk about valuing talent but don't put that talk into action, it shows. As a business leader, there are easy ways to gauge whether the happy talk about employees has a basis in reality. Here are our Top Six not-walking-the-walk red flags:

1. The talent chief is a half-chief.

If the human resources leader in the organization isn't at the same level as the rest of the E-staff—whether that's executive vice-president, senior vice-president, or chief [whatever] officer—the "greatest asset" language is a lie. Why would a company that values talent demote its top people officer relative to the rest of its leadership staff? Talk is cheap. If your company values talent, it will bring on an HR exec with the experience and wherewithal to operate at the same level as the rest of the leadership roster.

2. HR is a finance function.

Years ago, when HR was called personnel, maybe it made sense to stick the function under accounting. After all, most of what happened in personnel had to do with payroll records, vacation days, and the like. Today, managing HR as a finance function says "We value people, all right. Those salaries and benefits suck cost right outta the bottom line." If your HR function is a sub-group of finance or of your general counsel's office, you've got some squaring up to do between your "greatest asset" talk and the way things actually run.

3. Recruitment is a black hole.

Twenty years ago, during the Quality Revolution, experts urged CEOs to "staple themselves to an order," the idea being that the CEOs would learn first-hand what a customer's order-placing and -receiving experience was like. Today, you'd be wise to "staple yourself to a résumé." If your recruiting group is (as is common) a pit where résumés go to die, you're hereby forbidden to talk about greatest human assets until the problem is fixed.

At least 90% of the organizations I hear from have enormous problems managing the recruiting function in a way that values talent—and that's during the we-love-you stage, where valuing talent should be at its peak! Fix the function so that job candidates are treated like valued contributors rather than livestock, and you'll have made a major stride.

4. HR is a cost-reduction unit.

When HR is primarily a cost-reduction unit, charged with taking nickels out of the dental-plan premiums, your talent-awareness score approaches zero.

This doesn't mean that life in HR—even in the most talent-minded organizations—is spent handing out bonuses and organizing trips to amusement parks. Cost reductions, including layoffs, are unavoidable when business realities change. Even companies that find it necessary to reduce their staff rosters from time to time can be human, fair and respectful in doing so (Sun Microsystems (JAVA) comes to mind as an example of a company that doesn't drop out the human element in such situations). If your HR team's goals for the year focus on cost reduction rather than talent management, the engine is broken.

5. You've outsourced the most critical people functions.

It's logical to outsource an HR function such as processing worker's-comp claims to a firm that specializes in it. With any luck, worker's comp claims aren't terribly common or essential core competencies for your company. But employee relations? Staffing? Companies that move these talent-critical functions out-of-house are signalling in neon: "We Say It, But We Don't Mean It." No one sitting 3,000 miles away and answering 40 calls a day can listen and understand your employee's issues in the same way as someone embedded in the team, even if that's a roving HR rep or a local office manager with a bit of employee-relations training and support. When we reach the point where you're calling a stranger three time zones away to talk about sensitive people issues on the job, talent goes out the window, and good people won't stay.

6. Org development and HR aren't one.

Ten years ago, major corporations realized with a start that their HR folks weren't all up to the challenge of creating a winning culture and building leadership strength for the company. At that point, many of them created a separate organizational development group to deal with these issues. Talk about sidestepping a critical issue! No self-respecting CFO would permit her boss to take away her most strategic functions, and no HR chief worth leading your talent charge will sit by while you carve off leadership development, mentoring, succession planning, and performance management into a separate OD function. They're all aspects of the same role: putting the winning team on the field. Get an HR leader who can run the whole show, and put these functions back together.

If your company's showing one or more of these warning signs, you've got some work to do. The good news is, resolving these six organizational and operational problems will put you in great position to begin building a talent-management culture in your shop. There isn't any time to waste—if you recognized your company on our To-Don't list above, talented candidates are doubtless avoiding working for you right now.