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HR gets the most out of your biggest asset: employees

January 23, 2015
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Human resources at one time had an image problem. The image has somewhat changed but may not have moved to equal footing with finance, marketing or operations management.

Too often HR is viewed as a luxury the organization cannot afford in bad economic times, is only needed after a severe questioning of the organization’s practices (i.e., it got sued), or when the issues outgrow the president’s assistant.

Sometimes the criticisms of HR practitioners are caused by their own actions. Many HR people find themselves rooted in a self-imposed status as the “no” department. In other words, it’s a department that can tell you what’s against company policy, but never offers solutions to solving the problem. Or, they see the position as a power trip that involves everyone in the organization.

Many do not see its potential value in employee selection, compensation and benefit design, management and employee relations, and organizational development. Calling HR for advice can feel like going to the dentist: HR finds out everything that is wrong in your area and you get ready for painful corrections. The dentist tells you to floss more, see the hygienist four times a year, or that you need a filling or crown. HR frequently has its action list, too: discipline the employee, reverse the decision you made that does not comply with regulations, listen to employees complain about unfair treatment, etc.

As the organization grows, the people issues become more complex. In most organizations, 80 percent of the issues are people problems. Regulatory issues may be at the forefront of people issues. The Affordable Care Act, civil rights legislation, wage-hour regulations, the Occupational Safety and Health Act, COBRA and the Family Medical Leave Act are examples of regulations that affect employers. And don’t forget those pesky union contracts.

These laws did not just fall out of the sky. All of them occurred because there were inequities in labor practices. Somebody was looking for the cheapest and shortest path to achieving the organization’s or owner’s goals.

Unfortunately, once government gets its hands on fixing the problem, we all pay with a plethora of rules, sub-rules, DOL interpretations, lawyers and court cases. In case you didn’t realize it, the United States is not the only country that has such laws. Those with international operations often learn things aren’t so bad at home. You rarely find at-will employment provisions. Some countries have more laws; others have less. The latter group will catch up quickly as soon as people wrest power from the dictators or economies get better.

Nevertheless, the laws must be complied with or subject the organization to fines, injunctions, or possibly jail time for those that snubbed their nose at compliance. A professional HR person can help navigate through these issues.

There are many people who can carry out the mechanics of certain HR functions. As an example, it is quite common for a clerical type or office administrator to take over hiring for the company. Certainly, that person can review applications, do pre-screening, and take the new person through some of the orientation steps.

Developing solutions for high turnover or finding skilled people may call for a much different skill level in the HR person. This is an area many organizations are finding involves tremendous cost. Studies indicate the cost of turnover can be equal to 75 percent to 150 percent of the position’s annual salary. Additional studies show engaged employees can impact 20 percent to 40 percent of the bottom line. This big money should be the focus of a skilled, experienced and influential member of the management team.

Merging organizations, departments or job functions, as well as succession planning, bring up other issues centered on affected employees. How should skills be analyzed? What new skills will be needed? How will the news be communicated to those involved?

Will employees be moving to another location — in the same building or perhaps to a new city? Who stays and who goes? How are employee-culture issues going to be managed? Issues such as unemployment, COBRA, American with Disabilities Act compliance and new wage structures need careful scrutiny. What about the happy factor? Any time people are moved outside their customary zone, there are those who will view it as a new adventure while others are not so happy. The right HR professional can help advise the organization to effectively accomplish its people re-engineering.

Keep in mind that during the past economic slowdown a lot of bad (essential) practices took place. As things improve economically, the good employees who put up with bad situations will move on. Who will help set things back on the right path?

Larger organizations typically have an established HR function. What about a small organization? Even an organization with fewer than 10 employees can benefit from an HR presence. This can include the “mechanics” of HR, like having the correct government-required notices, legal and effective application forms, record-keeping systems, and other regulatory compliance systems. Also, the size of the organization does not eliminate the need for strategic planning, which an HR professional can help facilitate. There is no strategic plan that can be carried out without having the right people in the right spot, motivating employees or measuring success of people.

What can HR do for you? It can get the most out of that extremely costly and important asset called employees. It can make the difference between just getting by and having a truly successful organization. Having a strong HR presence at the decision-makers’ table can pay dividends over and over again. But you have to be willing to get them the proper authority and latitude to utilize the skills and experiences they have.

Jim Kohmescher is a senior consultant and Ardon Schambers is principal of P3HR Consulting & Services in Grand Rapids.

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