Managing Human Capital is Part of the New Definition of Human Resources

In my last Insight, I gave what I believe is the new definition of human resources: human retention. Retaining your top-performing employees, especially during an economic hardship, should be one of your most important goals.

Back to Basics
One of the more interesting trends in a recent study of our client case studies is that companies really need to start to take a little time to look at the HR101 going on in their company—tightening up employee handbook policies, finishing work on new and or updating of the old job descriptions, start to realign those job descriptions, review salary surveys, improve reporting content, conduct benefit surveys, etc.

For example, just because an employee or job description was worth considerably more a few years back when there may have been more financial security around your marketplace, that may not be the case anymore. The marketplace has tightened enough that a successful company can’t really afford to have someone who is being overpaid for not pulling their own weight, nor can you afford to recruit their replacement with the same skills profile going forward.

So between the job descriptions and understanding salary surveys in regards to where a person fits structurally within your business—some of the HR101 I’ve been talking about—you should be able to determine some areas where you could possibly tighten things up.

After the 101 tactics are strong, one of the key ways that my customers run their business tighter and generate revenue growth at the rate that we’ve seen in most recent years is by re-focusing their employee training programs around career-pathing. Once you have alignment of your job descriptions, salary surveys and incentive plans, you can build an intuitive training plan for each job within the organization, allowing employees to see a future with your company.

The ability to take a line worker to supervisory, to management, to executive management —in the small to middle-market space—is a career path that hasn’t been identified as clearly as possible, and you can bet you have turnover statistics to prove it.

My experience shows that it has to do with the way a company grows—when going from being 1 employee to a 10-employee company, to a 20-employee company to a 50- to a 250- or 1000-employee organization. Most of your time as leadership is spent during the growth period just getting your hands around the growth, and not so much on how the folks that you brought on when you were only 50 people will fit into the organization once you reach 500 people.

I have yet to have an executive team be able to answer accurately as to how many job roles are in their business, besides how many with job descriptions, current salary data, a performance management plan and career path-based training plan in place. So again there is always room for improvement with what you have already invested in.

Back to Employment Counseling Development
We’ve seen a lot of work recently around, “How do we teach our management and supervisory resources to better counsel their employees in hard times?” The fact is, while you may have executive management or leadership management who are still able to pay their mortgages and other bills, you may also have a lot of line and production employees who are having a considerably harder time doing the same thing.

This is why employers have to get better at counseling all types of employees. Employers need to make sure employees at all levels—not just the executive and management levels—are coming to work feeling positive and like they are able to express some of the issues that they are working with.

This is when things like employee assistance, 1-800-dial-out programs come into play. With these types of programs, employees can get assistance outside of your company for any personal difficulties they may be dealing with. Counseling them on how to get to that data should be part of the standard process.

I have also been seeing a lot of companies who are creating employee newsletters. The ability to communicate through tough times as to what your employees need to hear from you in the leadership role is very important. Talking to people annually/bi-annually/quarterly is not often enough when times are tough.

In a previous role I worked with organizations that were going through Chapter 11 bankruptcy, most were publicly traded so communications were exhausting procedures. What I witnessed in these difficult times is when you have to get your employees to continue to do their job when they have no guaranteed future is a work of constant communication from the top down to every employee as much as possible.  

For example, if you have a 401(k) program, I guarantee your 401(k) administrator has been getting called everyday for the last 60 days. Now if you were actually creating a weekly newsletter that provided updates around your 401(k) program, you may be able to reduce the amount of phone calls that are coming into your administrator. This could be similar for benefit plans, employee recognition and all company announcements. Newsletters are about making your employees feel comfortable about where things stand in your company and the business world in general right now.

The business world seems to be dealing with an emotional business environment that holds a lot of unknowns and a lot of fears of what the future has in store. Those of us that have been in business for awhile know that these trials and tribulations come and go, and it always takes time to go from a dip to a peak. We will get better times, but in the short-term, you have to manage the human capital you have to its fullest potential because replacing that skilled and trained human capital is neither as easy nor as inexpensive as you would think.

Retaining your top-performing employees, especially during an economic hardship, should be one of your most important goals.