Businesses which understand the importance of their ‘human resource’ have a better chance of surviving the rough weather, says Steve Kennedy. He explains how smart HR can drive better business.

Managing cash flow, retaining market share and positioning for growth are fundamental priorities for any business. Unfortunately, many otherwise astute business owners fail to understand that their people’s initiatives are the economic engine and brains behind business success. Those who grasp this concept now will have a better chance of surviving the rough weather ahead.

As the economic gloom worsens, HR specialists find themselves increasingly engaged in the restructuring and redundancy process. On the surface this seems to be a natural fit—the end result is, after all, obvious to all. However, getting the best out of your HR consultancy requires further thought into what your business requires in workforce planning now, and in the future. And, more importantly, why?

Let’s start with cash flow as just one example: Obviously in a recession, liquidity is an everyday concern, and with this comes the almost inevitable move to change the size and shape of organisational workforces; when revenues decline the reaction is to reduce fixed costs and, often, fixed cost reduction means staff reduction. But simply focusing on fixed costs will only get you so far.

There is of course no getting away from the imperative analysis of those direct costs which impact negatively on the bottom line. Countless management units have been putting their companies under the microscope, reviewing the revenue generating parts and identifying shifts in the market. This has resulted in previous revenue generators no longer being profitable.

So how can smarter, more dynamic HR solutions be aligned with the three key business priorities listed above?

Take revenue generation. Front of mind for any qualified HR specialist should be the need to discover which areas of the business are earning money. Only then can a logical HR strategy be developed. This in turn should tap deeper into the best revenue streams by identifying those employees who are critical to their flow. Once this process is complete, roles can be more clearly defined and skills appropriately matched.

The question good managers need to ask is ‘How aligned are my recruitment processes to my company’s needs?’ Smart HR must ensure the development of objective data against business priorities, which in turn allows informed decision making. The cost of getting it wrong is significant, both on your revenue streams and to the human element of your business.

Productivity is the one true and quantifiable measure of organisational efficiency. Therefore, smart HR will always develop tools to review and appraise staff at every link in the organisational chain. Empowering staff to engage in those tasks and responsibilities that maximise business income is a prerequisite for success, so why do so many businesses not have these processes in place? Especially now!

Only through regular measurement of staff against pre-developed revenue priorities can business returns ever be maximised. The alternative is diminished cash flow, constant reworking of recruitment strategy and a world of costly recruitment error.

Secure revenue generation and increased productivity are two key areas smart HR can help. Identifying and gaining competitive advantage is another.

What is your point of difference from your competition? Who in the organisation is adding to that point of difference? Is it the service you provide, the customer relationships that are formed by those working for you, or your employee’s commitment to the brand? The answers to these questions drive straight to the heart of the culture you have cultivated within your organisation.

A thorough HR consult will help you examine your key customers and who they connect with in your organisation. We all know that business opportunities often exist with current customers, so you need to have the right people undertaking the right tasks and trained appropriately to maximise those opportunities. In tough times, tough decisions about who is engaging with key customers need to be made. There is no room for complacency.

Competitive advantage can also be related to quality control. We’ve all heard the term ‘you’re only as good as your last job’. In an environment of great pressure on revenue, maximum strain on market retention and unforgiving tension on growth strategy, that cliché is absolutely relevant. Savvy management requires clear and unambiguous standard setting and smart HR must factor induction, orientation and ongoing training and development into any current strategy.

Induction could well be the most important process as this is the one time you get to set that all-important standard; the one time you get to impress on new staff how, and what, your business stands for and delivers upon. Investment of this time at the start of—and throughout—an employee’s tenure will help ensure more measurable and acceptable levels of productivity and quality.

Ultimately all of this can be condensed into two very important terms: flexibility and alignment.

Staff reduction may well be something your business simply can not avoid. However, by going deeper and truly understanding the powerhouse your human resource provides, you can work through a strategy that goes beyond the first dimension and integrates revenue generation, productivity, competitive advantage, quality control, and flexibility. It’s all achievable by simply aligning the right staff to the right responsibilities.

That sounds like smart HR.

Steve Kennedy is a director of HR consulting firm EQ Consultants. Contact him on 03 366-4034.

“People are our most valuable asset” is a cliché which no member of any management team would disagree with. Yet, the reality for many organisations is that their people remain

• under valued
• under trained
• under utilized
• poorly motivated, and consequently
• perform well below their true capability

The rate of change facing organizations has never been greater and organizations must absorb and manage change at a much faster rate than in the past. In order to implement a successful business strategy to face this challenge, organizations, large or small, must ensure that they have the right people capable of delivering the strategy.

The market place for talented, skilled people is competitive and expensive. Taking on new staff can be disruptive to existing employees. Also, it takes time to develop ‘cultural awareness’, product/ process/ organization knowledge and experience for new staff members.

It may seem that it shouldn’t matter how you treat your employees, or how much you pay them, they are there to work, and work they should – but it’s an undisputable fact that badly motivated staff do not produce the same high results as a company where staff motivation is high.

There are a number of ways you can increase staff motivation. One of these is to offer incentives that reward good reliable workers. The incentives could be financial in terms of a certain % bonus each month, or they could be in terms of paid vacation entitlement – x number of days per target surpassed.

A less expensive way of increasing staff motivation is to address the workforce’s basic needs. What are the employees’ facilities like? Do they have a designated rest area? Is this light and airy? Do they have a staff restaurant or place they can buy food or snacks? Are the restrooms clean and hygienic? Is each member of staff given their own workspace, or are they constantly moving around with no fixed “home” base? Are employees allowed a rest break? Are the health and safety in the workplace laws enforced? Are employee uniforms provided free of charge?

Another way to increase staff motivation is simply through communication. Employees, who are told to do a job but are not looked upon as part of a company team, often feel that this is just a job where they go and do the minimum and then go home again. They aren’t made to feel that they are an important part of the success of the company. If the employees are given information about how the company is functioning, what is being planned for the future, what targets the company is aiming for, how the company is trying to outsell its competitors, and then they start to think like one of the team. They want their team to win, and they will do whatever needs to be done to ensure that their piece of the puzzle is completed on or before time.

Finding the way to increase staff motivation in your workplace will undoubtedly result in a profit increase because a workforce that is motivated to work will always produce more than one which isn’t.

Personal grievance awards broke new records across New Zealand last year with Wellington being the city with the highest average payments. An analysis of last year’s decisions shows records were set for both highest and lowest payouts as reported by the Employers and Manufacturers Association.

The average claim amount for hurt and humiliation in Wellington was $6474, while for Auckland it was $4851, and in Christchurch $4896. A record 521 personal grievances were heard by the Employment Relations Authority (ERA) in 2008 and, in another record, 67 per cent of decisions favoured employees.

The increase in the number of cases was not in relation to restructuring and redundancy as you would think but rather the number of cases claiming disadvantage, or about dismissal for poor performance had doubled. Our analysis also showed 49 per cent of personal grievances were taken by employees in their first year of work.

While the law stated reinstatement to a job was the primary remedy, only 17 out of 521 employees were reported to have claimed it. It appears that some employees saw personal grievances as an alternative to buying a Lotto ticket had some foundation.

These new statistics emphasise the importance of getting your fundamental Staff Management practices in order otherwise your business might be next facing an expensive and time consuming PG. Talk to the team at EQ if you have any concerns or questions around your staff management practices and procedures.

The Swine Flu is a ‘hot topic’ at present, although there is lots of noise about this on the news it seems the majority New Zealanders are being reasonably complacent. The difference with this virus (as opposed to the bird flu for example) is that it is actually here in New Zealand and is a reality so here is a few points EQ thought would be helpful.

What are the symptoms?

Typically, flu-type diseases begin with sneezing and a sore throat. A fever then develops followed by a coughing stage, especially if secondary infections like bronchitis or pneumonia develop. Headache, muscular pains or aches, diarrhoea and vomiting are common too. Different strains or types of flu may have different combinations of these symptoms and people infected with the same flu may show some symptoms that others do not. A possible side effect of having the virus could be tiredness or depression for a period following the illness – it my take some people a month to get their energy levels back up to normal. Ring Healthline 0800 611 116 if you require further information.

How does this impact my workplace?

The obvious impact will be that an increased number of people that will be off sick for approximately 10 days over a period of 6-8 weeks and that this will be a significant impact on the ability for a business to be able to operate.

What leave do I pay them?

Check your employment agreement and payroll leave reports to confirm how much sick leave is available to employees. Remember, it is now legal for employees to apply to have annual leave converted to sick leave – so look at the annual leave entitlements as well. If they run out of both types of leave, then the leave will need to be unpaid.

What if my business is shut down by the Government? (eg events are cancelled or gathering places closed down)

Once again refer to your employment agreement. Unfortunately at this time no compensation is available through the Government so unless your insurance covers this situation you will need to honour your employment agreement with employees and pay them. You may be able to negotiate for them to use annual leave but this would need to be by agreement between the parties.

Ring us at EQ on 0800 021 223