Opening the Door for Workforce Development
In an emerging economy driven by information and
services, people create value. Yet workforce development is frequently
viewed by organizations as a luxury offered in times of plenty and
eliminated in times of distress. Our challenge is to establish
workforce development as central to organizational strategy and
success. Human Resources can play a key role in this, and, in so doing,
become viewed as a key strategic resource rather than a cost. Here are
some steps Human Resource practitioners can take to become primary
contributors to the creation of value.
What do we mean by organizational value? On a
broad scale value can be described as the sum total of the
organization’s knowledge, capabilities, operating practices, connections
inside and outside, how they fit together, and the ability to marshal
these to meet customers’ needs. In simple terms it is the price we
could command if we sold the organization. That is driven by how much
cash we generate, which comes from growth and profitability, both of
which are, in turn, driven by the effectiveness of the workforce. So
the first message to HR practitioners is be ready to speak in this
language of business colleagues, understanding how value is created,
measured and communicated.
The second message is to clearly understand the
organization’s purpose, how this links to business objectives and the
role the workforce plays in realizing these objectives. This role
will change significantly according to the stage of evolution of the
organization. For example, in the early initiation stage of the
organization, primary emphasis will be on reaching out to potential
customers to validate product and service offerings. In later, more
mature stages, operating efficiency will likely predominate as a
strategic issue. HR practitioners can be central to guiding the
evolution of the workforce to match evolving needs.
The third message for HR practitioners is to
quantify the linkage between workforce contribution and value created by
the organization. If this linkage is not established the workforce
and the Human Resource function will be viewed as disposable costs, not
strategic value contributors. Our challenge is to demonstrate tangible
value from investing in the intangible asset of workforce capability.
And there is good, solid evidence that speaks to the benefits. For
example, Becker, Huselid and Ulrich (The HR Scorecard: Linking People,
Strategy and Performance, Harvard Business School Press, 2001) showed
that a 33% increase in an index describing high performance work systems
yielded a 24% increase in market value. Elsdon (Affiliation in the
Workplace: Value Creation in the New Organization, Praeger, 2003)
showed a return on investment of 183% by investing in employee career
development in a high tech organization.
The fourth message for human resource
practitioners is to take advantage of emerging simulation and modeling
approaches that make it possible to explore what happens if we
pursue workforce development processes. Simulations allow such
exploration without disrupting the organization. Such simulation and
modeling tools can, for example, help guide the allocation of
development resources among different groups of employees performing at
different levels. These tools provide a framework for deciding on the
best path to drive business success, making it possible for HR
practitioners to make a powerful contribution to business partnership.
In applying these approaches the fifth message
for human resource practitioners is to recognize the legitimate
interests of multiple stakeholders: employees, the organization,
shareholders, suppliers, customers and local communities. Indeed
balancing these sometimes competing interests leads to the sixth
message that of recognizing and reconciling multiple business and
organizational tensions, such as:
·
Balancing employee and shareholder needs
·
Balancing resources to address both short-term
(performance) and long-term (individual development) outcomes
·
Balancing competing resource needs of different internal
constituencies such as marketing and organizational development
This brings us to the seventh message,
managing successful project implementation by applying a distinct
set of project management competencies and methodologies. More and
more work is being completed through the structure of project teams, due
to the proliferation of trends such as virtual teams and complex
projects. Achieving work through project management competencies will
only increase as a business model, and HR practitioners need to be aware
of this trend as well as gain their own skills in project management.
In summary, by speaking the language of business,
linking and quantifying the contribution of the workforce to the
organization’s purpose and value contribution, taking advantage of
emerging simulation techniques, understanding and reconciling the needs
of multiple stakeholders, and using effective project management
principles, human resource practitioners can become a key strategic
resource.
Ron Elsdon and Steve Flannes, will address this
subject in an article in the Fall issue of HR West, a publication of the
Northern California Human Resource.
Also learn more about this area by attending a
workshop sponsored by the Northern California Human Resource Association
on the subject of “Create a Business Case for Workforce Development” on
either August 4 in San Francisco, August 11 in San Jose or August 18 in
Sacramento
(NCHRA
Meetings & Events : Event Registration http://www.nchra.org/source/meetings/cMeetingFunctionDetail.cfm?PRODUCT_MAJOR=WK40128§ion=events).
Employment Trends
The U.S. unemployment rate stabilized in April, May
and June, 2004 at 5.6% as shown in the first figure below. Indeed for
the U.S. as a whole the unemployment rate increased significantly less
in the economic slowdown of 2001- 2002 than in earlier recent
slowdowns. As economic growth continues we will likely see significant
reductions in the unemployment rate and a tightening of the labor
market. There may continue to be short-term softness in certain
sectors, for example unemployment in the San Jose area is much above the
California state average as the high tech recovery slowly gathers
momentum. Contrast this with growing shortages of finance specialists
in the San Francisco area.
In spite of the relatively small increase in
unemployment rate overall in the U.S., the average number of weeks
people are unemployed increased dramatically during the recent slowdown,
approaching the highest levels recorded previously as shown in the
second figure below. This decade has brought hardship to many
individuals and families. In a future newsletter we will look at the
growing inequality of income distribution. 
Quote
“We are not developing … wealth for its own sake.
Wealth is the means – and people are the ends. All our material riches
will avail us little if we do not use them to expand the opportunities
of our people.”
John. F. Kennedy, 1962.
Upcoming Elsdon Organizational Renewal (EOR) Events
·
Create a Business Case for
Workforce Development. Northern California Human Resources Association
(NCHRA) Workshop
(NCHRA
Meetings & Events : Event Registration,
http://www.nchra.org/source/meetings/cMeetingFunctionDetail.cfm?PRODUCT_MAJOR=WK40128§ion=events)
o
August 4, 2004, NCHRA Training Center, San Francisco, CA
o
August 11, 2004, Hyatt, San Jose, CA
o
August 18, 2004, Hilton, Sacramento, CA
·
Building Affiliation: Workforce
Leadership in Action. HR Southwest Concurrent Session.
(HR
Southwest,
http://www.hrsouthwest.com)
o
October 7, 2004, Fort Worth Convention Center, TX
·
Becoming Career Fit in Turbulent
Times. Project Management Institute - SF Bay Area Chapter Meeting
Presentation
(Project
Management Institute SFBAC - San Francisco Bay Area Chapter, http://www.pmi-sfbac.org/index.phtml?menu=other_page&menu2=51)
o
October 21, 2004, Courtyard Marriott, San Francisco, CA
·
Global Issues Forum.
International Career Development Conference (ICDC) Panel Discussion
(International
Career Development Conference - Career Assistance.
http:///www.careerccc.com)
o
October 27, 2004, Sacramento Convention Center, CA
·
Opening the Organizational Door
for Career Development. International Career Development Conference (ICDC)
Concurrent Session
(International
Career Development Conference - Career Assistance.
http:///www.careerccc.com)
o
October 29, 2004, Sacramento Convention Center, CA
·
Building Employee Commitment in
a Growing Economy. 56th Annual California Groundwater Association
Convention and Trade Show Concurrent Session
(California
Groundwater Association Events, http://www.groundh2o.org/events/events.html)
o
November 6, 2004, Silver Legacy Resort and Casino, Reno, NV
