Human Capital Musings!

a peek into the human capital world…

Archive for the category “attrition”

Stability or competence.. what would you say?


Few days ago,  someone had called me to get my opinion on which I would think is the deciding factor in getting someone for a role with my client organisation.

My reply was  – while I may personally opine that competency is of paramount importance and will score over stability, other things remaining the same, most of my clients would indeed feel uncomfortable sharing that view of mine. And so, from a client perspective, stability scores over competence…. Yes, most of my clients would rather appoint a more stable candidate than someone who could deliver much better. Period.

That said, it also made me think as to why most clients  – and assuming that these are just a sample of the whole universe – most organisations prefer to bet safe on a seemingly ‘stable’ person, leaving competence behind in the hiring process.

Could it be because of the following?

  1. The persons responsible for the hire prefer a safe bet, someone who has just been an ok and average performer, who will stay on for a while, thus proving the hirer right from having gotten a stable candidate onboard.
  2. The opposite of this – what if the decision to hire the more competent person happens to boomerang? What if he does not adopt and settle into the ‘culture’ of the current team (which is almost always masqueraded as organisation culture).
  3. Having someone who is extremely competent would means that there is a possibility that the incumbent is the smartest of the lot, and would upset the apple-cart for a whole lot of folks who are a product of the current ‘comfort zone’!
  4. Justifying the cost of the hire becomes much easier when the person hangs on for long, than otherwise. Apart from the cost of hire, numerous other HR metrics would look so good in the name of stability – cost of rehire, attrition and so on… ….expect offcourse the revenue/employee which could have been much  better with a more competent hire.

This is just a sample of what might contribute the right hire strategy of the organisation.

Little does the organisation or the HR therein realise that to have someone more competent – there also would be a need to work on appropriate engagement and ‘stay’ strategies – and this would indeed call for a little more proactive and evolved HR/leadership – than that may be needed to sustain a ‘stable’ employee.

Surprisingly, in the name of stability, is it the right thing to overlook what could have been the opportunity ‘revenue’ impact of the organisation in having someone more competent, even if it is for a lesser period of time – compare this with the ‘average’ revenues with stable employees.

And with the new gen workforce which is dynamic and organisationally ‘ephemeral’, I only think the organisations that advocate stability over competence will be the losers!

What do you think?

Employee engagement truths… who’s responsible?


Creating an engaged employee is not just the responsibility of the human resources function or the head of Human Resources of an organization. Most contemporary organizations, barring an exceptional few, leave the task of creating employee engagement to the HR head or the human resources team. the top management and the leadership teams get disconnected with the day to day rigmarole of employee engagement, thinking or presuming that it is what the HR function exists for. Nothing can be far from true and more disastrous.

Irrespective of which phase – nascent, growing or well entrenched and established- an organization is in, employee engagement is a function of the leadership and top management – the A team if you can say so (including the board), and times of challenge and uncertainty, are the best times to re-visit these fundamental tenets of employee engagement.

There is just no better time to work on building ‘employer value proposition’ than now.

The broad definition of ‘employer value proposition’ is striking a balance between the values, both the employer and employee derive from the relationship. For any organization, be it big or small, there is one (in fact ONLY) critical factor that can bring value worth more than its weight in of gold – it is to create, sustain, and grow ‘employer/employee value proposition’ by the hour, by the day, for the eternity of the organization. It will not be an exaggeration to state that the ‘eternity/successful longevity’ of the organization, is inextricably linked to how engaged the employee/the work force is.

What causes shock and a bit of dismay in any student of ‘employee engagement’ is thatemployee disengagement’ becomes a tool of first resort for the leadership of the organization, when the going gets tough.

 

The management and the leadership, which ought to communicate more than ever, which ought to engage more than ever, which ought to look at taking every single employee  of the workforce into confidence, in trying times, does the opposite – be incommunicado, shut transparency, resort to mass retrenchment, even cut on hygiene benefits, and in the quest to tide over these tough times, do everything that is a no-no.

Undoing this, when the times get better, will be a humongous challenge, and any amount of selling by the same leadership is not going to help – for every one negative step today, even four positive steps to undo later might seem insignificant.

So, more than ever before, it is today that the leadership of the organization must spend loads of time on employee engagement – for the better of the short/long term interests of the organization. Rather than get into a shell or a reclusive mode, the top leadership must communicate more, know employee concerns, address the inherent and time-sensitive insecurities and get to the pulse of every single member of the team – every issue that may seem greatly important and downright trivial should be.

Each and every decision that is taken, and impacts any corner of the organization should be communicated clearly to the employees. In a word, having a ear on the ground, to the last step should be the cardinal rule, now, more than ever. It is also leadership’s responsibility to create a proactive and dynamic mechanism, where every manager/business head/human resources function is committed to THIS style of employee engagement, in all sincerity – and a great amount of effort should go into creating a right perception of these decisions, because employee engagement is also about every measure is perceived by the stake holders.

In all this, precipitate actions could be looked at as a measure of last resort, and when they are resorted to, they also should be explained with reason to the whole workforce – unless this is done, the whole exercise gets defeated.

There can be numerous ways and methods by which what is stated in a nutshell can be implemented, depending on the team size, the line of business, and the competitive scenario – all that can be debated and a plan of action formulated on a case to case basis. And all gleanings in contemporary HR and employee engagement practices must be relied upon.

Leadership must, NOW, more than ever before be truly-truly committed to absolute employee engagement – and that will be a recipe that will sustain organizations in the long run – much longer that every single employee will be a eternal brand ambassador – the inherent value derived for the organization will be phenomenal, and immeasurable.

Are we right-sizing attrition?


With the advent of the Gen Y employee composition, attrition is one thing that keeps haunting any talent management/HR professional, in any part of the world. May be, this challenge is more pronounced for the HR pro who is in an India or China or Philippines, the famed off-shoring destinations of choice.

Too often, we keep seeing HR bodies and top employers dishing our statistics about the rate of their attrition, and how well it is contained or well within acceptable standards or international norms. One always wonders if there are any stated accepted norms which say so much % of employee attrition is healthy for the competitive survival of the organisational animal.

Here, is’nt it important that for competitive survival, rightsizing attrition would be a more appropriate and relevant objective. We must be hearing HR people and employers state that, for this fiscal we have achieved the goals of rightsizing the attrition which will have a positive contribution to the top-line and bottom-line of the organisation.

With right-sizing as a HR and organisational objective, the tasks also get inseparably tied with the performance management process, putting in place the systems for an effective performance improvement program (whatever be your organisational nomenclature) – one that is clearly focused on measurably improving individual contribution, and then planning the exit management of those whose goals and skills are not in alignment with the organisation goals.

Assuming that the Jack Welch theory on  the effectiveness of people in the organisational pyramid stands, the minimal healthy attrition rate is 10-15%, depending upon factors like the type of industry, skills sets, engagement factors and so on.

When right sizing attrition is in play, with the combination of all HR factors and tools, on the bottom percentile of non-performing or under-performing employees, the HR program interventions make some % of this bottom to move up one notch – make them  as acceptable level of performers.

Then, the resulting attrition related information gets stated like this – In our employee strength of so many people, about 200 were seen to performing below acceptable standards; thanks to our effective HR programs and interventions, we could move 70 of them into the ‘desirable performance zone’. By this, we could rightsize attrition to so many percentage, which we deem as desirable owing to factors that are unique to us an as employer!

The rightsized attrition figures also give a whole different perspective to the way attrition is looked at, from the organisational perspective.

Lets now on get to right-sizing attrition that the usual fight to bring down attrition.

 

 

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