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Metrics Help Link HR Strategies to Productivity Gains

As reported by HRI, financial measures such as operations revenue per FTE and income per FTE can help HR better understand how HR initiatives can affect employee productivity, according to HR Magazine. Revenue per full-time employee (FTE) is calculated by dividing revenue by the number of FTEs and can be a useful measure of how effectively employees generate sales. Income per FTE is calculated by dividing sales (after expenses) by the number of FTEs and can be a useful measure of how well employees generate sales and manage expenses. Both measures are particularly useful when analyzed over a period of time or when compared with like firms in the industry, especially for organizations with service and knowledge workers.

These measures can be used to identify trends linked to specific HR programs, such as training, compensation or staffing. For example, while some firms may cut support staff to reduce costs, these kinds of measures may actually provide justification for adding support staff to increase productivity. (HR Magazine [Kroll], July 2006, pp. 65-69)

Crisis Management Calls for Skilled Leadership

As reported by HRI, how leaders respond to a crisis is a "critical test of their stewardship," according to Helio Fred Garcia, executive director of the Logos Institute for Crisis Management & Executive Leadership. Garcia was interviewed in 2006 by Wharton MBA student Romi D. Garvey. Boards are expecting more transparency in crisis response plans, both because of uneasiness concerning personal liability and for reassurance that the firm is prepared to handle operational glitches. Companies can gain a "first mover advantage," says Garcia, if they are prepared to act quickly. "If a corporation is able to demonstrate that an operational setback is exactly that, it declines adversaries the opportunity to interpret the crisis as they wish," Garcia explained in the interview. Following are some of his suggestions on how leaders can prepare for a crisis.

• Define what a crisis is, what the early warnings are and which senior executive is responsible for the preparation and response. Ensure this person has full authority to mobilize resources.
• Test the crisis response plan through activities such as war games, exercises and other ways to practice quick decision-making.
• Stay in control of the crisis response agenda so that "media, adversaries or the rumor mill" don't take over the definition of the situation. Develop response tactics and messages that provide stakeholders with what you want them to think, feel, know and do.
  (Wharton Leadership Digest [Garvey], March 2006)

Expect Shortfalls in Young Leadership Talent

As reported by HRI, the supply of leadership talent in the 25- to 44-year-old group will be short by some three million leaders by 2008 - when the demand for such talent is increasing, according to Michael Echols, vice president of strategic initiatives at Bellevue University. Among the leadership talents that need to be developed is an ability to process large amounts of information using skills in "analysis, synthesis and critical thinking" - skills typically developed over an extended period of time. While training and development is often considered a cost to be minimized, it may be preferable to consider it a long-term investment that pays off in avoiding recruitment costs and productivity loss due to attrition. (Workforce Performance Solutions [Echols], May 2006, pp. 20-23)

Many Workers Change Jobs After Three Years

As reported by HRI, significant proportions of workers aged 30 to 50 anticipate leaving their current employers within three years' time, reports the American Business Collaboration, a consortium of seven major U.S. companies that offers management advice relating to employee issues. The consortium polled 2,775 individuals nationwide in 2006, finding that a third of workers in the 30-40 age group and 25% of those from 40 to 50 said they'd change employment before three years passed. The survey found that employees who worked hourly said they expected to average a half-dozen different employers during their careers, while salaried workers estimated that they'd work for an average of five employers. Surveyed workers aged 30 to 60 reported a lack of career development options as the leading driver of job dissatisfaction. (DallasNews.com [Moos], October 16, 2006)