The New Definition of Human Resources

It’s been a busy year in Human Resources (HR), needless to say. There has just been a major change in the presidential office, as well as a substantial economic downturn not related to, but dependant on, those changes in the office to provide ongoing guidance and assistance to the small and medium-size business community.

Help is on the way but not without a lot of hard work. 

Economic changes have been very strong in driving how businesses are dealing with human capital. Companies are now hoping to engage employees in their work moving forward. This is part of what employers need to do if they’re going to be successful in the future. 

The New Focus
I believe going forward the new focus of human resources is going to be on human retention. Due to the current economic conditions, companies are no longer able to focus their capital on better benefits or deeper financial incentives or emerging growth within business sectors, not to mention investing in cutting-edge research and development (R&D) opportunities. 

So what we’re seeing is the strategies of human retention will continue to drive businesses through these tough times by offering services to employees, such as career-pathing, ongoing internal training and employee-level counseling as well as leadership development and ancillary benefits. Even over the last year I’ve already seen a number of companies add benefits such as wellness programs, monthly newsletters, pet insurance (yes, I said pet insurance) and other things like that to help retain employees. 

I think that the focal point of human resources will remain on people retention until the country starts to see some brighter days. 

Common Mistakes Employers Make
One common mistake I see is, many times, employers don’t think very much about human resources when they’re planning their business. What they’ll usually do is focus on writing a business plan and figuring out how they want to run the business. Then they’ll think about what product/service they’re going to sell and how much revenue they think they can make. Next comes deciding what kind of funding they need. 

At the end of the day, however, there isn’t any thought put toward human resources until that first payroll the employer runs on their own. And when times get tough, the first place cuts are made after marketing and corporate parties seems to be in human resources because that department is not viewed as a revenue generator; it’s viewed as a cost rather than a profit center. 

But those employers couldn’t be more wrong. 

Employee Retention is Key to Weathering the Storm
I spend a lot of my time helping companies with organizational growth stabilization since they are seeing a pretty dramatic slow-down in organic growth. Companies are having a hard time holding onto good, solid talent, and investors are looking to push a stable revenue stream and are, therefore, asking companies to look for financial cutbacks to drive the bottom line when they aren’t able to achieve the revenue goals they set for themselves. 

The days of unlimited talent pools and Fortune 100-benefit plans, company cars and open-expense budgets for the short term—and maybe even the longer term—seem to be over. So companies are apt to reinvest with ways to retain their employees. 

Just keeping the talent you’ve already acquired, trained, and developed your company culture around is really going to be the difference of being able to fight these tough times and bring on a lot of new revenue multipliers because the new revenue market has really slowed down dramatically. 

Five Tips for Weathering the Storm
Here are five tips for employers who want to weather the economic storm: 

• Review Your Documentation—Policies and procedures in handbooks you may have developed years back may not align well with your size or the current business environment. Update your documentation to fit with your company now and as it grows into the future.
• Review Your Termination and Downsizing Procedures—Extensive liabilities exist in dealing with the need to tighten budgets and reduce headcount. Make sure you have a solid plan to make the changes less stressful on your employees and your business.
• Make Headcount Reductions the Last Decision after Analyzing All Cost-Reduction Opportunities—Many companies in tough times let employees go before renegotiating other extensive costs in their business. With talent getting tougher and tougher to find, however, the last thing you can afford is to let go of good people.
• Focus HR efforts on the essentials. There is no way to create perks like career-pathing and leadership development if you don’t have the basics in place like job descriptions, salary statistics, incentive models and supervisory training programs. If you haven’t taken care of the essentials yet, refocus you HR efforts until the essentials are taken care of. This will make it easier to then transition into creating additional employee perks.
• Never take your eye off the ball—Tough times happen; they are inevitable. So do not forget your long-term goals and the steps required to meet them. Yes, they may take longer to achieve than initially planned, but staying on track while running a leaner and meaner organization will only make the upward turn more successful. 

Economic changes have been very strong in driving how businesses are dealing with human capital.