The new business climate requires scrutiny diligence

August 23, 2010
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A lot is happening in the business environment. It is action and reaction as always, but now it just happens at an increasingly faster pace. Some of the change is brought on by legislation, some by economics and some by technology. And yes, there will be winners and losers and a lot of folks in the middle.

Staying on top of these highly fluid, change agents with multiple actions and reactions is almost mindboggling and for many, very stressful. In prior articles, we have written about the health care legislation as one of the major changes rolling down the road. It is just one of many regulatory changes that have recently hit the books involving the human resource arena. If you turn to the financial aspects of doing business, the operating environment doesn't get any better.

There are a number strategies to stay on top of the regulatory iceberg, but what about other areas of expertise? How do you obtain, manage and retain talented workers with the skills and knowledge to address the multiple aspects of running your business?

Historically, this has been managed with internal full-time staff, with outside consultants and venders. Most operating organizations spend a lot of effort to size staff to meet organization needs. Economics (margins, competitiveness, profit demand) now dictate more rapid adjustments: Do more with less. The stress levels within organizations are rising at an alarming rate due to this supply and demand imbalance, because labor costs are always seen as the easy leveling factor in saving the bottom line. People are viewed as expendable.

This condition of stress is causing a shift in employee mentality, one that will not allow business to operate as it has in the past. Overworked employees take shortcuts. Short-staff resources put employees in positions that broaden their responsibilities but often don't have corresponding authority or training to do the job effectively. This is costly in many ways — some obvious but some that are hidden and surface over time.

Along comes technology and entrepreneurs with solutions. They create ways that allow employees to do more things — frequently more cheaply, quickly and generally more efficiently. However, the "cheaper" tool may be a double-edged sword. Now the employee can afford to buy the tools and go into business for themselves, and using the expertise and experience not built into the tools, sell their new-improved services back to the employer or client. They begin to get control back into their lives. They are rewarded for their extra effort and can decide on how many hours they want to work.

The technology entrepreneurs also are adding a new dimension to this mix. They are catering to these new professionals who go into business for themselves with other services. They can link up multiple service providers — for example, graphic designers with marketing professionals — on a project-by-project basis to provide an array of services sold back to the employer (now the client). These people work with associates of choice. They don't have the company political hassles, the downsizing worries, the not-so-pleasant bosses, etc. You can even make an arrangement with the equivalent of a manufacturer’s rep to sell your services. Other considerations replace these, but more and more skilled employees will make the trade.

Current legislation will allow self-employed individuals to have the same benefits as when they worked for someone else by buying benefits on the exchange. Legislation also supports other key benefit programs, and other entrepreneurs are developing new, more cost-effective benefit options. You can make these decisions and not wait for the HR department to give you the option when it is right for the company. It is becoming much easier to be an independent contractor.

This change in the relationship to employers is not just speculation. There are a number of new surveys that show employees with skills are jumping ship and will do so more quickly as the economy gets better. That, combined with waves of baby boomers who soon will retire or die, will change the face of the way business has to be conducted.

It will be highly advisable to take stock as to where your organization is going and how they are going to get there. Succession planning, staff development and alternative staffing had better be part of your game plan if you want to meet your strategic goals, or even just stay in business. If you wait until the symptoms start to show, it may be too late: The "patient" may die unless you come up with a new solution, which may be a very expensive pill to swallow. Everyone else will be scrambling for the same pool of talent to save the "patient." Planning and a proactive approach and some insight will determine the outcome.

Ardon Schambers is a principal at P3HR Consulting & Services.

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