Canadian Management Centre's Training Blog

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)

Firms Focus on Hiring Young Recruits over Retaining Older Workers

As reported by HRI, among many companies, recruiting younger workers takes precedence over developing strategies for retaining older workers, according to The 2006 Merrill Lynch New Retirement Study, which polled 1,000 U.S companies, 250 of which were Merrill Lynch clients, with another 751 selected at random. Regardless of fears over losing "skilled professionals," more companies (61%) are engaged in developing recruitment strategies for young hires than are crafting ways to retain older workers (38%), and less than half (45%) are evaluating "priorities of older workers who may want to continue working." The following are additional recruitment and retention best practices targeting older workers:

• flexible work schedules and technology that enables remote work assignments;
• more assignment choices, including reduced pay and hours, mentoring and coaching options and full health benefits for part-time and seasonal positions;
• phased-in retirement plans and a realignment of pay structures to benefits.
  (The 2006 Merrill Lynch New Retirement Study [Merrill Lynch, Pierce, Fenner & Smith, Inc.], 2006, pp. 14, 16)

Flexibility Is Critical to Retention

As reported by HRI, to retain their top employees, organizations should invest in more comprehensive benefits aimed at work/life balance; this was the overall recommendation of a 2006 report from Washington, DC-based nonprofit New America Foundation and Workplace Flexibility 2010, a program of the Georgetown University Law School. Specific suggestions in Promoting Children's Well Being: The Need for Workplace Flexibility included employers' offering short periods of leave that would enable workers to handle unexpected obligations, extending telecommuting and other flexible work arrangements, offering longer periods of leave to employees who face caregiving responsibilities and providing an option for less than full-time hours to accommodate workers with health or other issues that prove unmanageable on a full-time work schedule. In addition, the report recommends that employers take action to help employees who take leave time transition in and out of the workplace more seamlessly. (Bulletin to Management, October 31, 2006, p. 347)

Recruiters See Potential in Former Employees

As reported by HRI, multiple considerations underlie employers' willingness to rehire former employees, observes Bruce Tulgan, head of the Connecticut-based management-training firm RainmakerThinking Inc. According to Tulgan, the overall shift from long-term to short-term periods of employment has made employers more amenable to rehiring former workers, as has the desire to recoup the investment an organization has made in finding and training employees. Certainly, Tulgan says, the tighter market for talent - especially in industries such as health care and accounting - has made companies more willing to reconsider their traditional approaches to recruitment, including rehiring policies. Finally, he explains that retention rates for rehired employees tend to be high, making them a more sought-after group among potential recruits. (Staffing Management [Pulley], July-September 2006)

Engagement Becomes a Top Management Concern

Engaging employees ranked third among the leading issues facing today's managers, according to a 2006 survey by the Ken Blanchard Companies, an international learning and performance consulting firm. The organization polled 805 HR and line managers across a variety of industries and found that 53% of respondents identified engagement as a top concern for leaders, behind developing potential leaders and identifying and recruiting key talent, respectively. Blanchard's 2006 findings compared with 47% of respondents' noting engagement as a leading issue in the company's 2003 survey. (2006 Corporate Issues Survey [Ken Blanchard Companies], 2006, pp. 1, 3, 6)

For Canadians Trust Does More than Pay to Boost Worker Satisfaction

Trust trumps raises? Researchers in Canada found that a slight increase in employee trust affects a worker's satisfaction as much as a hefty raise. University of British Columbia researchers found that "when an employee's trust in management increases one point on a 10-point scale, it has the same effect on that employee's level of life satisfaction as a 36% raise." Trust is the definitive best practice, according to economist John Helliwell, who says candid and open communication is the key to building or rebuilding trust. He claims that employees who trust their management and executives work harder and are often healthier, happier and more fully engaged, all of which reflects in the bottom line. (Canadian HR Reporter [Klie], June 5, 2006, p. 3)

Evaluating Outsourcing Services Becomes Crucial

As reported by HRI, As the use of outsourcing increases, so does the need for measures to evaluate its impact, advises SHRM Research. According to a 2006 article, measures used to evaluate outsourcing can be divided into two categories: those that measure quality level and those that measure number of services delivered. Summarizing the work of Dr. John Sullivan, the article highlights that the following issues are worthwhile of consideration: adequacy of service (both quantity and quality), resources that go into managing the relationship with the outsourcer, impact on costs related to both efficiency and strategic improvements, and any unanticipated results. (SHRM Research [Kirchhoff], August 2006)

Employment Services that Focus on Older Workers Emerge

Responding to demand, employment services especially geared to older workers are springing up around the U.S. The number of workers 55 and over in 2005 came to 40 million or 16.5% of the total workforce, as reported by the Bureau of Labor Statistics, who predicts this share will grow to 20% by 2015. In tandem with AARP, employment agencies are developing specialized work-search strategies for older workers. Manpower Inc. has created a Reinvent Retirement program while Kelly Services finds jobs for roughly 67,000 older workers annually. Agencies like Senior Employment Services find that three-fourths of clients are seeking full-time work; others, like Over 60 Counseling and Employment Services, place many more into part-time jobs. (New York Times [Olson], April 11, 2006)

Work Life Balance Programs Make Colgate Palmolive Stand Out

Colgate Palmolive Hellas (Colgate Greece) is number one on the Great Place to Work Institute's list of 100 Best Workplaces in Europe 2006. Honored for its work/life balance programs, the subsidiary of the U.S.-based multinational maker of toothpaste, soap and other products, boasts an average voluntary turnover rate of 3.3% and an absenteeism rate for 2005 of just 0.3%. Flextime for all employees and up to 24 months' time off for new mothers (nine more months than the legal requirement) are two of its most valued strategies. The company's training procedures have become a best-practices model for the larger corporation, contributing to pilot seminars. (100 Best Workplaces in Europe [Great Places to Work Institute], 2006, p. 5)

Leading Employers Implement Sabbatical Programs

Some organizations - particularly large employers - are instituting sabbaticals or other paid leave programs as a part of their strategies to compete for top talent, according to a July 2006 article in Wall Street Journal. Accenture, Cisco Systems, Pfizer and other leading employers have programs that offer their top performers opportunities to take timeouts to work for nonprofit organizations. The companies pay their employees to contribute their expertise, viewing the programs as both leadership development options and rewards for high performance. On Cisco's program that pays managers to work in southern schools that were damaged by Hurricane Katrina, the company's vice president of corporate affairs, Tae Yoo, says the effort aims "to get employees re-energized and re-engaged, give them a broader sense of themselves, the company and the community." Accenture employee Nicola Locke calls her employer's leave program that pairs top performers with nonprofits worldwide "one of the reasons I joined Accenture in the first place." (Wall Street Journal [Chao], July 17, 2006, p. B5)