HR Demystified

Great link from the folks at Fast Company magazine with several other blogs that cover a broad HR spectrum. Worth a look.

http://www.fastcompany.com/magazine/106/next-best-blogs.html?partner=rss

Attract & Retain Top Talent

That is, or should be, the mantra for HR in any company. Sure, all the harassment training and legal compliance "stuff" (and expertise) needs to be there - you shouldn't run your company without it. However, I believe the core value of any enterprise is the quality of it's talent. Attracting and retaining top talent - all of the time, continuously, is the top strategic objective for HR. That's what gets HR noticed at the management table, and that's what gets HR taken seriously. You can have the greatest systems in place, but without talent, you have little to work with to maintain a competitive advantage.

There are three basic ways to attract & retain top talent, I believe:

1. High Quality, High Value Benefits. Offer a comprehensive and flexible benefits package, comparable to a Fortune 500 company to help your organization level the playing field. Every organization is a little different in deciding what's appealing to current and future talent. Beyond health, dental, vision & disability insurance, consider an Employee Assistance Program (EAP), and some specialized benefits, like Pre paid legal assitance, 529 College Savings Plans, a Credit Union, and flex spending to name just a few.

2. Training - not just on your industry or profession-specific skills, but also offer a wide range for personal & professional development (soft skills, business skills, leadership, computer skills, etc.). More well-developed, multi-dimensional talent creates a significant competitive advantage for your organization.

3. Have a Growth Path + Performance Management in place - if your company is truly "Built to Last", and retaining top talent is a priority (why wouldn't it be?), then employees need to see a future for themselves in the company, beyond the next project or paycheck. Ensure that they have a growth path, and that it's well understood. Beyond that, make sure all associates are measured according to a Performance Management program, so both the company & individual have clearly defined objectives that can be measured, calibrated, and "tweaked" as needed. If you're truly hiring high achievers, then they should look at Performance Management goals as "minimum requirements", and blow those goals away - benefiting everyone in the process.

The quest for talent and keeping good "bench strength" is, or should be, an ongoing mission.

Eliminate Employee Leasing!

I'm sitting here at a lawyers convention in Sunset Beach, NC and booth traffic is pretty slow, so I had a chance to peruse a business magazine left in the booth, "Priority", put out by the Pitney Bowes corporation. There's an article in there about PEOs - Professional Employer Organizations. The article is called "Juggle No More" by Nate Hardcastle, and describes how beneficial PEOs are to small & medium sized businesses that are growing quickly. True enough, as these organizations relieve many employer burdens & liabilities, especially in the areas of compliance with federal & state HR laws, training, employment tax administration and filing, getting affordable, high quality benefits, and handling payroll to name just a few.

Then the author gets a little confused in explaining how this happens, by saying a PEO "effectively leases those employees back to the client." That is dead wrong.

Some background: Many PEOs use a business structure called co-employment to handle the areas above. In a co-employment model, a PEO comes becomes the legal employer of the client's staffers. That change is only technical, however, as the business operates as they normally do and maintain direction and control over their employees, just like before. The PEO is there as an expert in Human Resources, much like a CPA or lawyer works with a business. Additionally, the PEO becomes legally liable for adhering to laws governing payroll, insurance, and other human resources functions. Clearly, co-employment is a "Win-Win" for both parties involved.

Many people, including the author of this article, have confused "employee leasing" & co-employment. Co-employment, which is how most every PEO operates, is not employee leasing! Employee leasing was used by doctors and other professionals years ago, in order to get favorable tax considerations, and to maximize the contributions into their retirement plans. They did basically fire all their (non-doctor) employees, an employee leasing company hired them and leased them back to the doctor. The employee leasing company maintained ultimate direction and control of the employees, not the doctor. Those tax laws eventually changed, and employee leasing died off as a result.

In co-employment, there are still two employers and - make no mistake - the client company still maintains direction and control of their employees, just like before. A client service agreement (CSA) is created that delineates the responsibilities for the PEO and the client, under a co-employment arrangement. The PEO is there for expert advice and counsel, and to relieve the employer of the typical employer burdens mentioned above. There's little, if any, downside to the client company.

Co-employment through a PEO is a valuable business strategy, just as long as it's understood fully. PEOs have a mission to educate the business public about their business model and seek to eliminate terminology like employee leasing from the marketplace.

Six Ways to Encourage Employee Development

Great article on the value of training, especially for growing businesses.

http://www.allbusiness.com/articles/1240-0-0.html

Most growing business know that training & development are key to achieve and maintain a competitive advantage. But, finding time to attend formal training sessions can be impossible. Fear not, E-Learing empowers employees to continuously hone their skills - and continuously add value to their organizations. The best E-Learning systems utilize a "dashboard" called a Learning Management System (LMS) which enables organizations to administer and assign company- and industry- specific training series, including design, delivery, tracking, reporting and implementation. A good LMS can even be customized to each particular job function, increasing staff potential, and be an effective resource for Performance Management and productivity improvement. If you believe the value of your organization is directly related to the talent and knowledge of your people, ongoing Training & Development is critical to stay (at least) one step ahead of the competition.

The Business Purpose of HR

Thankfully, there are business leaders out there who "get it" when it comes to the real business purpose of Human Resources. Bob Dumouchel, is one of those business leaders, as he mentions in PEO Insider from November 2005: http://www.napeo.org/members/insider/nov05/justmyopinion.cfm?.

Much more than rule enforcers, and often incorrectly cast that way in many organizations, HR plays such a critical role in adding value by helping company leadership attract and retain top talent. That's Job #1 for HR, he says. I definitely agree.

Dumouchel implores us to look at HR strategically - especially if you're in HR and want a "seat at the management table", which he compares to what IT professionals faced 30 years ago. The IT professionals got there by creating value - converting the asset of data into valuable, and strategic, business information. HR is still struggling to get there, because they're still the definer and defender of "the rules box." That has to change he says, and makes this bold statement:

"The business purpose of HR is not to follow the rules." Huh? Stay with me...He goes on to say:

"The business purpose of HR is to develop a world-class workforce that creates substantial competitive advantage for the business, and the opportunity to advance that agenda happens every day.

"Every time a business hires or fires, it is an opportunity to improve the quality of its workforce. HR professionals must understand the competitive situation of the organization within the market and develop a workforce strategy. This includes seeking diverse candidates who will sharpen the competitive edge of the business and increase the overall corporate knowledge.

HR must continually cull the workforce and either correct or remove substandard performance. HR must coach and develop people within the organization, and create clear career paths to enhance retention of the right people.

HR needs to understand the complex web of state and federal employment laws and regulations and use this knowledge to help the business navigate to its goals.

HR must stop telling management what they cannot do and tell them instead how to reach their goals within the rules."

Right on, Bob. Now could you tell that to all of those organizations that still don't get it?

The good news is that this expertise doesn't have to be developed in-house. HR outsourcing (HRO) is one of the fastest-growing industries in this country, projected by Gartner to be a $55B (yes, that's billion) dollar industry by the end of 2007. Consider HRO a strategic business decision, as you consider ways for your company to be more productive & profitable, while saving time on non-core administrative HR tasks. If you're already in HR, you can add significant value to your role, and get that seat at the management table, because at the end of the day, HRO is just an implementation strategy of the HR function - and a darned good one!