PEOPLE FOCUS - CIPD

More documents

Recommendations

Info

HR MANAGEMENT PEOPLE FOCUS Getting the Measure of People In A Downturn by Mark Carter and Sean MacHale “There is now a great deal of evidence that the contribution of people is the largest driver of organisational performance. Systematically collecting, analysing and communicating information on the value of this contribution is vital…” Evaluating Human Capital - CIPD Nov 2008 CEOs across all organisations need to make rapid and effective decisions in today’s extreme operating conditions. But many feel that they are trying to conduct surgery by candlelight. They do not have a complete picture of the workforce, the money invested in employees and the skills needed for the business. It is therefore difficult to predict the full impact of cost cutting. Research shows that spending on payroll workers typically accounts for 40-70% of the total, with the remainder split between contingent workers and outsourced services. Such costs vary widely, however, even within the same industry, and in many cases, employers can reduce them by as much as 5-10% without reducing headcount (1) . Of course in the current environment many employers feel they have no option but to lay off employees to cut costs even if they don’t have an exact handle on those costs. However, the question should be asked if in the long term redundancies cost more than they save. Taking into account potentially substantial redundancy payment costs, the potential loss of productivity given the loss of workforce numbers, and the long term cost of hiring replacements when the economy improves, the overall cost can be more than actually retaining staff and examining other ways to reduce costs while maintaining workforce productivity. Additionally, in a redundancy programme organisations run the risk that the most talented people – those that can more easily secure alternative employment – may be the first to leave. Those remaining can be psychologically damaged by seeing their colleagues leave, often leading to poor morale and a consequent loss of productivity effecting the bottom line. Enhancing productivity during testing times Research suggests that employers with more highly engaged employees report higher productivity per employee (1) so organisations should consider ways in which they can best measure engagement even during a downturn. Prudent employers realise that cash isn’t the key to motivating many employees, particularly amongst the younger generation who constitute a large part of the Irish workforce. A new study (2) finds that the most valued benefits favoured by younger Irish professionals from a list of 15, including cash bonuses are: • Flexible working hours • Greater holiday allowances • Training and development opportunities Employers should think about the consequences for each segment of their workforce before indiscriminately cutting training spend in a downturn. Balancing cost reduction and talent retention In the short term, many CEOs are understandably less worried about a skills shortage because their attention has turned to survival. Globally, the percentage of CEOs concerned about the availability of key skills fell from 61% in 2008 to 46% in 2009 (3) . But even while laying off part of the workforce, ambitious employers will continue to focus on talent attraction and retention, and may even treat this period an opportunity to attract people who would have been harder to recruit during the Tiger years. The Challenge for HR In the current climate there is even more onus on HR to demonstrate, through a range of quantitative and qualitative metrics, the cost effectiveness, efficiency and productivity of the workforce. To present a viable case to the CEO they need evidenced based solutions on a range of people issues, including HR effectiveness, pay and productivity, leadership, talent, engagement, innovation and HR transformation. If business is to maximise its return on its ‘most important asset’, and to retain the key talent needed to ensure short term survival and long term prosperity, then the insights provided by appropriate human capital measurement will be a crucial business resource in these most testing of times ■ Mark Carter & Sean MacHale are with PricewaterhouseCoopers’ HR Services group (www.pwc.com/ie/hrs) PricewaterhouseCoopers will host and present a CIPD members evening meeting on Wednesday 11th March @ 6:30pm. Full details are available from www.cipd.ie (1) Managing People In A Changing World - Key Trends in Human Capital: A Global Perspective 2008 (PwC Saratoga) (2) Millennials at Work – Perspectives of a New Generation’ (PwC) (3) PricewaterhouseCoopers 12th Annual Global CEO Survey 28
PEOPLE FOCUS HR MANAGEMENT Hearts, Minds & the Psychological Contract In this article, Garry Goldsmith makes the case that employers ignore the psychological contract at their peril. Garry is the practice lead of Hudson’s Talent Management Consultancy in Ireland. “The psychological contract has been defined as the perceptions of the two parties, employee and employer, of what their mutual obligations are towards each other. These obligations will often be informal and imprecise: they may be inferred from actions or what has happened in the past, as well as from statements made by the employer during the recruitment process or in performance appraisals” (CIPD, 2008). Drawing on the concept of the Psychological Contract provides new insight and supports a more symbiotic and sustainable relationship between employer and employee based on mutual trust and benefits. It is our firm belief, backed up by initial studies, that using the psychological contract as a diagnostic tool supports increased employee engagement and positively impacts business performance. This approach contrasts with traditional employee surveys, which focus exclusively on either the satisfaction or engagement of the employee, with no reference to the needs of the employer. Those who believe the current downturn in the economic cycle means a relief from talent related issues may be in for a rude awakening. Current trends suggest that the overhang in demand for talent from several years of strong growth may weaken the traditional link between labour availability and economic activity. If true, this new reality would reinforce a growing belief that demographic factors, combined with long-term economic growth, are fuelling permanent talent supply shortages across most professional roles, and most acutely in mid-level managerial positions. Much like global oil reserves are thought to be at or near their likely peak, the supply of professional talent in most western countries is also stabilising before an impending retraction. The obvious outcome of increased demand combined with limited capacity to increase supply is higher prices, which has clearly occurred over the least decade with the labour market re-pricing talent. And when prices of any resource rise, users need to do more to conserve and protect what they’ve already got. Increasing commitment among employees has been shown to increase productivity (Meyer & Allen, 2001). Engaged and motivated employees demonstrate higher commitment to their employers and are higher performing in their roles. In addition, recent research (CIPD, 2008) found that over 70% of employers believe voluntary employee turnover has a negative effect on business performance. The same research by Meyer & Allen also shows committed employees are more likely to remain with the organisation for a considerable period of time. This is especially important given the sizeable costs associated with employee turnover and the opportunity cost of line managers spending a disproportionate amount of time with new hires. Lets highlight this with an interesting example at the IT department of a large fixed-line phone company, who were experiencing high turnover and low performance among their programmers. To stem the significant costs associated with replacing these specialists, management made several significant investments in basic salary on the back of information from both their employee survey and exit interview process. To their surprise, attrition remained stubbornly high. Following our analysis, we identified that for this particular employee group, employability and using the latest technology were more important than salary increases over a certain threshold level. By rolling back some of the salary increases and replacing them with a personal training budget and 5 days paid training leave per annum, turnover fell and performance improved. Furthermore, the organisation was able to leverage new cutting-edge web development skills, which would never have been a development priority for IT managers focused on maintaining legacy mainframe systems Of critical importance when formulating people policies and deciding on the right course of action, is an understanding that the factors which trigger the decision to leave an organisation are not the inverse of those factors that drive engagement. Herzberg (2003) brought much attention to this fact in his seminal research on motivation, while a recent study in Australia & New Zealand by Hudson (2008) suggests that while people ultimately leave for money, their relationship with their manager and the company culture are far more important than pay in determining job satisfaction and therefore high performance. So while there is no magic wand or silver bullet, we have seen several recurring themes behind the most successful initiatives, regardless of the organisation or industry. Talent is a scarce resource, and is only going to become more so. A new workforce of highly educated and mobile people bring with them increased and vastly different expectations of what personal needs their job should satisfy. Rather than seeing this as a negative, the leading organisations of tomorrow will be fully in tune with this new paradigm, and are already taking strenuous and innovative steps to harness the incredible potential of a fully engaged workforce ■ This article is based on a full research article by Paul Dinan, Hudson Europe. A copy can be obtained from garry. goldsmith@hudson. com. A web cast is also available on this topic at www.hudson.com/engage. 29
Page 1 and 2: PEOPLE FOCUS Chartered Institute of
Page 3 and 4: WORKPLACE PEOPLE FOCUS Building and
Page 5 and 6: ANALYSIS PEOPLE FOCUS Imaginative a
Page 7 and 8: PUBLIC SERVICE PEOPLE FOCUS TRYING
Page 9 and 10: PUBLIC SERVICE PEOPLE FOCUS In a cl
Page 11 and 12: PEOPLE FOCUS LEGISLATION NERA was s
Page 13 and 14: PEOPLE FOCUS RESEARCH whose well-be
Page 15 and 16: PEOPLE FOCUS RESEARCH AND POLICY Ne
Page 17 and 18: PEOPLE FOCUS LEGAL 2. The person ag
Page 19 and 20: EMPLOYMENT PEOPLE FOCUS Directors r
Page 21 and 22: PEOPLE FOCUS RECESSION 6 Look for c
Page 23: PEOPLE FOCUS HR MANAGEMENT training
Page 27 and 28: PEOPLE FOCUS COMMUNICATION Communic
Page 29 and 30: PEOPLE FOCUS DEVELOPMENT Education
Page 31 and 32: PEOPLE FOCUS LEARNING A time to ref
Page 33 and 34: PEOPLE FOCUS HR MANAGEMENT Helping
Page 35 and 36: PEOPLE FOCUS COACHING Figure 1 - Cr
Page 37 and 38: REGIONS: COLLEGES: GRADUATION PEOPL
Page 39 and 40: REGIONS: COLLEGES: GRADUATION PEOPL
Page 41 and 42: PEOPLE FOCUS UPGRADES Cork Bon Seco
Page 43 and 44: PEOPLE FOCUS REGIONS: MIDLANDS Offi
Page 45 and 46: PEOPLE FOCUS REGIONS: EASTERN CIPD
Page 47 and 48: PEOPLE FOCUS REGIONS: WESTERN Dr. T
Page 49 and 50: PEOPLE FOCUS REGIONS: REGIONS: WEST
Page 51 and 52: PEOPLE FOCUS REGIONS: WESTERN Minis
Page 53 and 54: REGIONS: SOUTHERN PEOPLE FOCUS “W
Page 55: REGIONS: SOUTHERN PEOPLE FOCUS Nove

PEOPLE FOCUS - CIPD

Create successful ePaper yourself

Delete template?

Save as template?