RLT Associates

Personnel Advisers

What's all this about People problems?

Since employees can cost up to 70% of operational expenditure, some - but not yet all - organisations are beginning to understand that they are the most import asset.

A minority of organisations are doing something about it since organisational goals can only be delivered if people policies and practices are aligned. However, overall, the importance of investing in human capital is only gradually being recognised as knowledge based organisations become an integral part of the world economy.

Good employers are, paradoxically, more open about employee mobility and the absence of any guaranteed employment. But while they provide funds for training and self-development, they need to identify not only those staff they would like to retain and develop as core to the business - and to reward them appropriately - but also those perfectly satisfactory individuals who could be just that bit more productive with the right support. External advisers can show how to achieve this.

These organisations may also need to have difficult discussions with marginal performers but should minimise the risks of possibly vexatious claims by the aggrieved, especially on discrimination grounds. More now understand how they can investigate any such grievances with outside help, when all involved are conflicted.

The gap between good practice and best practice may not be huge, but there is clear evidence that best practice organisations have a bottom line advantage. Do you know how to identify the metrics of best practice for your organisation, how to get there and to show a return on the investment?

Of course, there are still some employers who for a number of reasons are perhaps not yet at an adequate level of people practice. These organisations will underperform relative to the market in the medium term, even if in the short term they seem to be OK. Telltale signs include:

• lack of strategic clarity and vague senior accountabilities
• financial ratios that are erratic
• unnecessary internal tensions and poor communication
• difficulties in hiring and retaining staff
• high absence levels
• employee litigation
• limited non technical training and erratic quality initiatives
• rising customer complaints.

Moving such organisations in the first instance to a good practice level through effective interventions has an immediate impact on the bottom line and a positive return on the investment. For example, reducing involuntary staff turnover is an immediate cost saving. But do you have the skills and resources to change expectations and behaviours?