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Managing the Vital Asset

Thursday, April 1, 2010 - 08:59

Flexibility over where, when and how staff work is king when it comes to managing an organisation's greatest asset: its people. Mark Story reports.

Admittedly, it was less applicable to some sectors than others - notably banking and finance but abnormally high staff retention levels in 2009 may have had more to do with global-financial-crisis fatigue than genuine loyalty. After all, many were happy just to remain employed during the turmoil.

But with the hiring pendulum swinging towards employees as recovery defines markets in 2010, the climate for hanging on to good people recently underwent a cool change. As a result, Simone Mears, Founding Partner of executive search firm Profusion, says the chickens are coming home to roost from firms that deployed inferior people management during the worst of the GFC.

Knowing full well there's another labour shortage crisis on the horizon, Mears says many people now have a renewed confidence to test their employability in 2010.

Mears expects abnormally high levels of staff turnover this year to be the by-product of recovering markets. Early signals suggest people are looking for change and she already has one client expecting staff turnover as high as 30 per cent in 2010.

Survey results by recruitment company Employment Office suggest that 84 per cent of employers have already started to recruit new staff. Since unemployment peaked well below expectations (at 5.7 per cent), Australia is now experiencing the fastest jobs growth in three years. Australian Bureau of Statistics figures suggest growth in Australia's labour force will have slowed to a trickle by 2016 (at 0.4 per cent), while demand growth is expected to be around 16 per cent.

According to Mears, renewed fears of acute labour shortages - especially within key sectors like IT and healthcare - together with heightened across-the-board wages pressure, will also force companies to seriously rethink how they manage both their people and their resources.

What's also raising the stakes for people management, adds Mears, is the pending exodus of baby boomers. Some firms in sectors like engineering are already expecting up to 50 per cent of their key staff to retire within five years.

"For many firms, replacing up to half their skill base with recent graduates within five years is a frightening prospect," says Mears.

Unsurprisingly, Marilyn Clarke, Senior Lecturer in Management at the University of Adelaide says one of the most radical changes in the people management stakes is finding creative ways of preventing older staff from leaving. What companies now realise, says Clarke is that the window for transferring knowledge from older hands to younger staff is rapidly narrowing.

"The attention is no longer exclusively on pandering to gen X and Ys. Older workers are making companies rethink where the firm's assets really lie," she says. "Too few organisations have considered sufficiently the impact of older staff leaving en mass."

So what exactly should companies do in the people (and resources) management stakes to retain star performers and attract the leaders of tomorrow?

Flexibility and mobility reign

Few would argue that excellent communication and listening skills, clear company vision, staff empowerment, empathy and offering meaningful roles are timeless hallmarks of good people management. Ruta Asimus HR Executive with IBM, says flexibility over where, when and how staff work is now paramount to managing an organisation's people.

"Equipping all staff with laptops and personal digital assistants, instead of a desktop and permanent workstation makes for the truly mobile organisation. Our staff don't have to physically be in a building to be working effectively," she says.

She cites the example of a female employee who's working from a boat somewhere in Queensland to fit in with her recently retired seafaring husband. Other examples include a colleague who's currently working from a farm in country Victoria to accommodate the needs of her ageing mother, and one of their top HR talents who spends three days a week running her own pizza business.

These are by no means exceptions to the rule, with 78 per cent of IBM staff entitled to work from home at least one day a week. "Eighty per cent of staff feel that flexibility in where work is done positively impacts on productivity," Asimus advises.

Fundamental to IBM's people-management philosophy is valuing the individual, diversity, honesty, direct feedback and a high-performance culture. This is why Asimus says the firm has invested heavily in the tools needed to deliver on these outcomes.

Within IBM, she says, flexibility extends to programs that allow young mothers to job-share with older employees who no longer want to work full-time. The 'top 20 per cent' talent pool can also take a leave of absence for up to two years to focus on personal development.

"Given that the GFC was a blip in the labour shortage crisis continuum, it's important that organisations tailor myriad people management initiatives to cater for different work demographics," says Asimus.

There's no shortage of research to prove convincingly that poor leadership is the root cause of higher staff turnover. That's why Clarke says one of the most valuable resources any company can deploy in good people management is sending line managers back to school to finetune their interpersonal skills.

Having concluded that 'DIY career management' approaches espoused in the 90s crashed and burned, she's noticed employers again accepting shared responsibility for staff career development. "Using training solely to plug holes in competency didn't work, career development is something people gravitate to," adds Clarke.

Clearly, there's no shortage of creative financial (and non-financial) tactics to try and look after staff, from work/life balance and salary sacrifice policies through to gym membership and bonuses.

But, at the more holistic level, Clarke says employers now recognise that one of the most effective staff-retention strategies is the win-win associated with carefully selected training and career development programs.

Five tips to managing people

  • Create an enjoyable workplace
  • Don't put staff under undue pressure
  • Don't expect salary alone to deliver strong retention
  • Create opportunities for staff to grow
  • Boost the 'soft skills' of line managers.

Five tips to managing resources

  • Harness the power of the web
  • Recognise that flexibility/mobility can enhance productivity
  • Effectively allocate people to projects
  • Maximise knowledge transfer
  • Deliver effective performance management.