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What keeps human resources managers such as Martin awake night after night? In a nutshell, the increasingly difficult job of assuring their employers have enough skilled staff to deliver products and services on time and in a manner that assures excellent customer satisfaction. These days that's a tough job, and it gets more and more difficult as time goes by.
The source of the difficulty lay in forces beyond Martin's, or any other HR professional's, control. The 2004-2005 Workplace Forecast: A Strategic Outlook compiled by the Society of Human Resources Management, identifies the top 10 trends most likely to impact on the workplace. To ignore them means harsh implications for managing a workforce. The trends include rising health care costs, domestic safety and security, use of technology, growing complexity of legal compliance, focus on global security, an aging workforce with too few skilled replacements, e-learning, outsourcing manufacturing jobs, and the changing definition of family.
Iowa Senator Tom Harkin, reiterates this concern. Citing the Aspen Institute report, Grow Faster Together. Or Grow Slowly Apart. How Will America Work in the 21st Century?, he wrote "the United States is given a dramatic wake-up call about a major crisis of the American workforce. This crisis arises from a worker gap, a skills gap, and a wage gap that, if not properly addressed, will threaten U.S. competitiveness and indeed our very way of life."
All this dramatically affects the human resources function. To learn more about how local human resources managers felt about these challenges, I contacted several of them and asked them "what human resources issues keep you awake at night?" (We excluded health care benefits and insurance from our discussions because nearly everyone agreed it is a major problem.) Here's what I learned.
Human resources ain't what it used to be
Current economic and business trends push the human resources function into a constant state of flux. Long gone are the days when an administrative assistant or office manager "ran" the personnel department along with dozens of other office management responsibilities. Today, many large businesses have human capital management departments with "Chief People Officers" managing budgets in the tens of millions.
As the nature of the human resources changes, so do the people running the show. What formerly was handled, quite capably, by a high school graduate now requires staff members with masters' degrees in business administration. A survey of Fortune 1000 businesses indicates that approximately 25 percent of top-level staff holds graduate-level degrees in business and finance, a departure from the typical HR professional trained in organizational development and psychology.
A trend toward restructuring human resources staff from generalists to executive managers indicates that some companies view each employee as a valuable and limited resource rather than a disposable commodity. However, it's critical that change occurs at the top with corresponding cultural shifts throughout the organization. Hiring and treating employees as important assets must be fundamental to the business plan and not just a tagline in a recruitment campaign. You might be able to attract competent staff with hype, but you can't retain them.
Despite sleepless nights and long days, the job is fun
Ed Krow started his human resources consulting company in 2000, following a decade of experience in corporate America. Ed didn't even hesitate to answer this question: "What keeps you and your clients awake at night?"
"Many business owners and senior-level managers still consider human resources as a cost center and a line item on their budgets," he says. "As a result, many departments are short-staffed and under-funded. They lack the manpower to do everything that is expected of them and budgets are tight. It's a fight between the human resources and sales and marketing departments. "Frankly," Ed continues, "sales and marketing is a lot more attractive investment for most employers than human resources."
Matching resources with workload is also problematic. Work generated by government regulations, payroll and benefits, safety issues, and turnover keeps multiplying. One mistake can mean penalties, fines and lawsuits totaling the thousands of dollars. Add the cost of non-productive man-hours spent rifling through mounds of paperwork in response to accidents, discrimination, and harassment complaints. Now you are talking about real money.
That takes us back to the business model and the emerging face of human resources. Beard Miller and Co., a central PA accounting firm approached Krow with an invitation to merge his company, HR Essentials, with them. Beard Miller represents one of thousands of accounting firms that understands human resources is a strategic partner in growing a business. By expanding the accounting firm's role into the business of human resources consulting, Beard Miller help their clients address some of the critical trends listed earlier: skyrocketing health care and pension costs, untangling the web of compliance issues, and retaining skilled workers. Succinctly, accountants with business savvy recognize that equipment tax credits and depreciation alone won't keep a business profitable. Hiring and retaining the best employees is pivotal to business bottom lines.
Oh, for a good night's sleep.
When Dave Anderson, Director of Human Resources at Clipper Magazine, sleeps well it's because of a singular luxury and one not shared by many of his colleagues - a large pool of qualified job applicants. Anderson tells me, "Good news travels fast and people just want to get in our door."
Anderson was the fortieth employee when he joined Coupon Clipper in 1994. Today, Anderson oversees human resources for more then 1,000 employees. And the workforce is growing. "I promise you what keeps me awake is balance, being an advocate for my employees while keeping the company on track by having the right people in place," Anderson says. "When you have 40 employees in a fast-growing company, everyone is excited about new opportunities", he goes on. "Our employees have only seen success. I worry what will happen if new opportunities slow down. Will 1,000 employees have what it takes and continue to be motivated? That keeps me awake at times."
As president of the Lancaster County Association of Human Resources Management (LACHRM), Anderson strives to gain respect for human resources staff from upper management. "The lack of respect we get from upper management is our fault," says Anderson. "It's only a recent trend for human resource professionals to track the cost of hiring, turnover and effectiveness of training on the bottom line. Unfortunately, many HR folks find it difficult to discuss money and people in the same breath, and that has kept them in the backseat, while other managers drive the bus."
Michael Mohn, vice president of human resources (and Anderson's predecessor as LCAHRM's president) wants to maintain the reputation Union National Community Bank has for doing some pretty remarkable things. He echoes Anderson's answer to my question. "When I lose sleep it's because I'm thinking about finding the right people."
Mohn isn't talking about just finding enough bodies to fill jobs either. He seeks "a new type of employee - one with a customer service mindset and the skills to deliver it. That is a special person and one not always easy to find."
"Performance management weighs heavy on me too" Mohn continues. "We have a good system but we need to tie performance metrics to objectives. Competition pushes us to be more productive so we constantly look for ways to do more with less through continuous improvement, but without burning through people."
Mohn recently terminated a few employees. "Many times these are good people, nice people. Unfortunately the jobs changed and the people didn't. We offered training and counseling but finally we recognized we made the wrong hiring decisions." After these terminations, he lost sleep. "It weighs on me. What could I have done differently to help them do better jobs? Could I have intervened earlier so their performance flaws didn't fall between the cracks?"
Christine Wheelen joined Electron Energy Corporation as Human Resources Manager just about a year ago. One of her biggest challenges was moving from a Fortune 500 company to a small family owned business. She went from being one manager in a department to being the one and only manager.
Like her colleagues, she shoulders responsibility for hiring the right people. Recently, more than 70 candidates applied for an open position. "Imagine coming in on a Monday morning and having seventy resumes to review for a highly specialized and technical position. Reducing the applicant pool to 30 was easy. After that, it was overwhelming," Christine reports. "By using an online applicant processing system we were able to qualify candidates with a minimum of our manager's time and narrow the pool to four. Thanks to technology and personality testing, we hired a great guy."
Now she's recruiting an engineer, and she is beginning to believe the warning of a skilled worker shortage. So far very few candidates are qualified for the position. She is working with at least seven or eight recruiters and still wonders "where am I going next to find qualified employees?" Between recruiting and interviewing, Wheelen deals with interpersonal conflicts, benefit questions, salary reviews, employee evaluations, plus the unscheduled OSHA team which showed up on the same day as the management team's leadership development training. "After a while, you just take these things in stride," she says.
Thou shalt not leave any employee behind
A few years ago I heard a speaker say that we live in a diverse community "because we allow Democrats to vote here." He was being facetious, of course, but he made his point. This type of narrow-mindedness is what keeps Michelle Caine up at night..and that didn't surprise me one bit about her. Treating all people with fairness and consistency is her passion. To make sure everyone gets the message, Caine just chaired the First Annual Diversity Resource Day in Lancaster County to which nearly 300 business and community leaders responded to her call.
"Once a company realizes what they get in return for treating people with respect," Caine says, "employees will do nearly anything for you. One of my biggest challenges is making sure all my supervisors and managers make every worker feel welcome."
Like Mohn, she also agrees that the "firefighting" image of human resources is partly HR's own doing. "We've got to stop just putting out fires and act as strategic partners with management," she continues. "We need to become leaders in managing our human resources."
While working for companies that do take HR seriously is rewarding, all these managers struggled with balancing their day-to-day activities with larger project. Mohn, Anderson, Wheelen, and Caine say they attend more and more management meetings and that diverts time away from the necessary people-to-people component of human resources. They enjoy and appreciate this high-level engagement and the changes they are leading, but often wonder how they will keep finding the time and resources to continue the balancing act.
Until they get some answers, it looks like more sleepless nights for these HR professionals.
Sidebar 1: Why Worker Shortages Will Not Go Away
- Sixty-five percent of all American employment now requires specific skills.
- By 2006, 20 percent of the workforce will hold the skills for 60 percent of the jobs.
- A serious lack of skilled workers will begin in 2005 and grow to 5.3 million by 2010, and to 14 million by 2015.
- More than 75 percent of the workforce must be retrained to keep the jobs they have; 80 percent of jobs will require some sort of postsecondary education; 61 percent will require more than a high school education but less than a bachelor's degree.
- While manufacturers have lost two million jobs since 2000, 80 percent of the National Association of Manufacturers' members report a moderate to serious shortage of qualified applicants.
- Although 41 million people are expected to enter the American workforce by 2010, 46 million college-educated baby boomers will retire in the next 20 years.
- The shortages will be most acute among managers and skilled workers in high- tech jobs.
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