Push people issues to top of agenda

Many factors influence a company's performance and one of the most significant - but often overlooked - is how the workforce is managed. Attracting and retaining talent is a top priority today, and this is why HR departments have to up their game and proactively start solving “people” issues.

The workforce is changing - rapidly. Technological advances and globalisation are putting businesses of all sizes under immense pressure and making it increasingly difficult for them to hire, motivate and retain talent.

Companies across the globe are faced with a maturing workforce that has amassed years of experience, but is now on the brink of retirement. The workforce is also more diverse, with a huge chunk comprising contractors, outsourcing firms, and temporary staff. Mergers and acquisitions are another reality of business today and these bring the challenge of successfully integrating disparate workforces.

Managing the HR function efficiently is important. But focusing on cost reduction as the primary measure of HR's performance will ultimately result in HR being managed as a commodity, rather than a strategic asset. Remember, just as most companies avoid strategies that reduce their products and services to commodities, so too is HR more likely to create real value when it helps an organisation to differentiate itself from its primary competitors.

The HR function has been forced onto centre stage in delivering strategic value that is measurable, and has had to, as a result, dramatically change the way it works. It's no longer good enough to only be doing admin work and reactive hiring and firing - HR needs to proactively produce solutions to strategic business issues facing the organisation.

This shift requires a number of new skills. First among these is a strong analytic orientation that includes accessing data from data warehouses and other information sources, structuring analyses to identify gaps and opportunities, and communicating the results in a way that is convincing to others. This is where BI tools play an integral role.

The substance of employee value has shifted away from labour, whether manual or technical, to knowledge and creativity.

Sandra Swanepoel is new business director at Softline VIP.

When we're talking human capital, we're talking a myriad issues and questions that need answering. How do I motivate individuals and departments? Do our incentives and benefits reward smart contributions? How do we extract innovation? What are the best training techniques? Why do employees leave the company, and where do they go? What does the individual employee think of our work environment?

Not enough HR professionals are empowered to answer these questions in a systematic way today. With BI tools, HR can utilise all the data related to their existing employees to analyse their human capital and provide decisions around staffing and retention.

Armed with this wealth of information, they are able to tailor the benefits and incentives to custom fit every employee, and identify trends that lead to a better understanding of how to maximise human capital. Positive trends can be leveraged for greater value and negative trends can serve as an early warning system to spur corrective action before problems become too big.

The substance of employee value has shifted away from labour, whether manual or technical, to knowledge and creativity. That change follows a change in business itself. To create value, business today must create new ideas, ways of doing things, approaches and services. The effective organisation finds a way to distinguish itself from competitors using fewer tangible assets.

To successfully execute this kind of knowledge-based strategy requires ongoing transformation of people. HR professionals should be delivering this kind of real value to their organisations, but too often do not know how to do so.

Using current employee data and projections about future workforce trends, sourced by using BI tools, companies can model the people implications of their business plans. HR can then develop targeted workforce strategies to help it attract, engage and retain the right people, in the right locations, at the right cost.

BI is an important input in measuring the value of a company's workforce because it helps link people data and programmes to financial performance.

Companies need to know the demographic and skills profile of their workforce in order to optimise the value of that workforce. That is increasingly the job of a strategic HR function. And, companies must be able to link workforce measurement and the role of the HR function to their business goals. That allows them to evaluate whether HR is doing the right things to help the company grow.

* Sandra Swanepoel is new business director at Softline VIP.