19.1 Strategic planning
A HR strategy is essential to helping the company achieve its goals. It shows how HR understands and supports the direction the company is moving in. A HR strategy will support strategic objectives of the financial, marketing, technological, and operational departments within a company.
A HR strategy should focus on the people of the company and helping them with medium and long term goals, which include:
-Having the right people in place at all times.
-Ensuring each department has the right mix when it comes to skills Favourable attitudes and behaviours from employees
-All employees are developed in the correct way.
In some instances, a company's plans are developed without HR being involved, which makes it harder to focus on the people. A comprehensive human resource strategy will have value:
Articulating the items that lead to plans and strategies within the company being successful. These would not have been identified in the past. It identifies any fundamental and underlying issues which should be dealt with by the company in order to ensure all employees are committed, motivated, and producing effectively on a daily basis. Strategic planning within the HR department means that focus needs to be on any developing and existing plans to draw attention to implications and problems which have not been noted in the past. This should also be time spent on identifying what strategies are important and need to be addressed to help the company achieve its goals.
This may include:
-Black economic empowerment initiatives
-Career development frameworks
-Employment equity plans
-Issues impacting recruitment, motivation, and retention
-Motivation and ensuring all employees are treated fairly at all times
-Pay levels
-Performance management frameworks
-Policies to assist with career development issues
-Succession planning
-Planning issues
-Skill plans
HR strategy will help you ensure that employees are planned for to help the company achieve its goals and objectives now and moving forward. The HR strategy must add value and have an impact on the company, such as:
-Changing the employment market in terms of remuneration, even demographic
-Identifying how cultural changes will impact employment patterns
-Establishing how the legal framework is changing when it comes to employment. 19.2 How a HR strategy can become imperative to a company
-HR professionals must ensure that all HR strategies are focused on the company's broad objectives and goals.
They must ensure that the company accepts the strategy. In order to achieve this, you need to:
-Discuss the strategy with all the stakeholders of the company
-Get supporters throughout the strategy process
-Focus on what benefits will be enjoyed by the strategy, which can be used to persuade others
-Identify the commitment level to the strategy across the company
-Provide regular and ongoing feedback on the strategy plan implementation
-Ensure the strategy becomes part of each induction, focusing specifically on managers in
senior roles.
Planning model
A HR strategy cannot be made up of one single approach. In fact, the approach will vary considerably from one company to the next. A good approach will follow six steps, including:
-Direction
-Management system design
-Total workforce planning
-Generating human resources as required
-Investing in development
-Assessing performance
19.3 Analysing
Analysing involves identifying the direction ofthe HR plan and how to use it to accomplish the company's vision, mission, strategies, and goals moving forward. The goals of the company should be the focus of the HR strategy plan at all times and everything the HR does with the plan should be to help the company reach their goals and achieve success. A number of companies will state that their employees are their reason for success and they are their competitive advantage over their competitors. Companies are constantly looking to adopt human resource policies to continue to achieve that advantage moving forward. This is determined by how the training is structured, what rewards are in place, and performance management techniques, just to name a few. HRM (human resource management) practices are used to ensure employees' behaviours are focused on the strategic plan at all times.
Actions to consider here include:
-External scans of environment to identify potential impacts on the company
-Identifying the company's mission and vision
-Identifying the company's strategic goals
-Discussing the plan with the relevant stakeholders
-Focusing on the legislative impact on the company moving forward.
19.4 Designing the human resource management plan
HRM policies range from flexible working practices to information technology. Every company needs to focus on the specific needs of the company and what is needed to achieve goals. Certain human resource management practices can be strategically supported, helping to retain staff within the organisation. This may be retaining female staff members in order to ensure diversity goals are met, for example. In order to achieve a good strategic plan, you must focus on what practices and policies are going to be best suited in helping the company meet their own strategic plans and goals when it comes to career planning, recruitment, reward management, training, etc. Actions you can take at this stage include identifying which practices are needed in order to provide support to the company's objectives and identifying the best practices to use in terms of human resources.
19.5 Investing in human resource strategic planning
The strategic planning is all about improving business kills and behavioural elements which play a role in how the company performs on a daily basis. Lifelong learning is one of the ways that new methods are paying off in terms of strategic planning, helping employees be motivated and have the skills to help the company achieve success.
Employees are very limited in terms of growth if they don't have access to career development opportunities. This means that they are more likely to leave a company and start looking for a position with growth opportunities. Employee retention is an imperative part of any strategy plan within the HR department, as it saves time and money in the long run, so you want to provide employees with the ability to grow within the company, keeping them with the company for as long as possible. Investment initiatives are growing in popularity to help achieve company performance.
Investing in employees or teams within the company can help with developmental needs and therefore provide each employee with the skills they need to complete their duties to the highest standard at all times. Investing in the growth of a team ensures flexibility and enables the team to work together towards a common goal. Make use of reward strategies as a way to improve performance levels and reward employees on a daily basis. Incentives are motivation for employees, getting them to work harder and achieve goals in order to achieve their reward, which can be anything form profit sharing to a number of benefits.
Action you are going to want to take here should include identifying the right procedures, policies, and practices relating to:
-Career pathing
-Employee development
-Performance appraisals
-Promotional opportunities
-Reward management
-Separation.
19.6Sustaining performance levels as part of strategic planning
Many companies will measure how effective their inputs are and how they affect performance on a daily basis. It is important that clear measures and milestones are implemented. This makes it easier to measure performance and ensure that the HR strategic plan is working. You will want to revisit the plan regularly to ensure that it remains current in terms of current goals within the company.
Action you may want to take is to identify the company culture, evaluate your HR strategy, focus on succession planning, and adapt your HR strategy as needed.
FACT
'Mission-driven' companies have 30% higher levels of innovation and 40% higher levels of retention, and they tend to be first or second in their market segment.
Source: glassdoor.co.uk
19.7 Mission statements
Employees need to know that they can rely on the HR department at all times to guide them, nurture them, and protect them with all of their career issues. A HR mission statement can speak volumes about the dedication of the HR department. The HR department will want to write a short mission statement of around three or four sentences in
length. It doesn't have to be more than one single paragraph, but it does need to pack a punch. In order to write the mission statement, you need to focus on certain elements the human resources department does and deals with daily. This may be to recruit and retain staff to the highest level and to ensure that they have a diverse work force. They must add about being health and safety conscious and protecting their employee while providing a comfortable working environment.
Goals
When it comes to drawing up the HR mission statement, you will want to focus on the goals of the department. Every company will have different goals for their human resources, and some of the ones you may want to add in your statement include:
-Anticipating and meeting changes within the work force
-Creating strategic partnerships
Career and professional growth
-Improving employee effectiveness in line with the company
-Supporting a diverse workforce
-Embracing technology
Values
A mission statement also provides valuable insight into the values of the HR department, helping employees understand their role, what they do, and how they will support them moving forward. Some of the values to consider when writing your mission statement include:
-Encourage teamwork. Focus on customer service
-Produce quality results at all times
-Ensure that honesty, trust, and integrity is promoted at all times
-Encourage employee development
-Improve communications
-Accept and embrace innovation and change.
What it is
The mission statement is the HR department`s chance to identify the culture, ethics, and goals that relate to decision making within the department. It focuses on various dimensions of achieving goals and how this benefits employees moving forward. Unfortunately, a large number of mission statements mean nothing and are useless. But in order to make an impact on potential employees and recruit and retain the right team members, you are going to want to ensure you provide a heartfelt mission statement and stick to it.
Developing your mission statement
Developing a mission statement should start with an effective brainstorming session, which should include those within the HR department, employees, and owners of the company focusing on the department strengths and weaknesses. It is imperative you understand how others in the company view the department, rather than focusing only on your own perspective. Don't rush a mission statement, rather take the time and use all the information you got from the brainstorming session to guide you. Identify the department`s core values. Write your mission statement like a story, you can change it, shorten it, or lengthen it as you go.
The mission statement needs to be in an easy to read and understand format without the use of jargon and most importantly, it needs to be convincing. The mission statement, once completed, should be displayed with pride. It can be in the employee handbook, in all documentation provided by the HR department, on the wall, and even on the company website under the recruitment section.
19.8Mission statement examples
There are so many great human resource mission statements you can find online which can provide you with guidance. We have put some together, taken from a number of companies including universities and colleges, to provide you with some idea on what you should include and how to go about writing a convincing mission statement that will make a statement moving forward.
Tufts University
'In support of the University`s mission to be a high quality educational and research institution, Human Resources partners with University communities to provide a broad array of programs and services. We are committed to providing excellent service. We partner with management to recruit and retain a highly qualified diverse staff; facilitate positive employee relations; train to enhance employee skills, performance and job satisfaction. We create and implement programs to increase organizational effectiveness; we design and deliver fair, competitive benefit and compensation programs, and administer payroll services. Working together in a spirit of continuous improvement and collaboration, the Human Resources team contributes to a progressive and productive work environment that meets the challenges of a changing world.'
Rollins College
'As a strategic partner with Rollins' leadership, we develop and deliver innovative human resource programs and services designed to support the mission of the College. Our core services and competencies include recruitment and staffing, employee relations, organizational and employee development, risk management, compensation and benefits, payroll, HR information management, and regulatory compliance.'
Michigan Department of Corrections
'The Bureau of Human Resources serves the MDOC by focusing efforts on the Department's most valuable asset, its employees. The Bureau does this through recruitment, hiring, and retention of a diverse, qualified workforce. The Bureau provides Human Resource direction, technical assistance, training, equal employment opportunity and labor relations services to the Department.'
PQ Organisation
'Our Human Resources Department works in partnership with managers and their teams, with individual employees, and with other groups to provide programs and services that create a work environment of employee empowerment and involvement in the business. Our corporate values of customer orientation, continuous improvement, teamwork, and achieving results are woven into every aspect of human resource management.'
19.9 Optimal staffing
In order to achieve HR effectiveness, you need to ensure you have the right staffing. The HR to employee ratio is a controversial metric that can assist the human resources department to ensure the right staffing to identify how the company delivers its services. The ratio is a very useful tool, but it can also be a dangerous one if you don't know quite what you are doing. It is not uncommon for a HR professional to calculate this ratio incorrectly.
The correct method involves:
Formula
Divide the number of full time HR positions by the total number of the employees and then multiply that by 100. An example would be six people working in the HR department in a company with 250 employees. You take the six and divide that by the 250 and then times by 100, which provides a 2.4 ratio. It is not uncommon for HR professionals to include the wrong HR positions in the formula, which is where it can get a little confusing.
Basically, all HR personnel that work as generalists, so those in labour relations, compensation and organisational effectiveness, should be included in the ratio, but those who are in training and development or payroll should not be included. In a small company, a high HR to employee ratio may result in a minimum baseline being met in order to deliver primary services. That being said, once the baseline is met, then the incremental HR staff needed to support employees isn't increased at the same rate as the employee number increase. In the event your department has a high HR to employee ratio, then you are going to want to look at the roles of the department within the company. The roles of the company will determine how many HR employees you need per employee.
A breakdown includes:
Policies, outsourcing, and cutting costs means one HR employee per 100 employees. Business strategy ongoing requires one HR per 166 employees.
19.10 Employee numbers
Many HR departments struggle with what is the right sizing based on the company. Reducing staff and saving money tends to be more common than actually hiring new employees to meet demand. It is not uncommon to try and identify what many employees a company needs and how many HR team members they need to manage them.
In order to assess the appropriate staffing levels within a company, you need to identify the HR ratio. The ratio is given above and worked out based on full time employees. This can be used as a standard comparison to assist you to ensure proper staffing is implemented and optimal staffing is achieved at all times.
Factors that limit the HR ratio include:
-Services offered
-Automation
-Company size
19.11 Services offered
It is true that different HR functions will provide different employee services and at different levels. Each will have their own approach.
Typically a HR function will include:
-Change management
-Compensation and benefits management
-Company design and development
-Employee relations
-Employee record keeping
-Ensuring compliance with labour laws
-Performance management
-Recruitment
-Training and development
-Work force analysis
This also includes payroll and labour relations which are part of the human resource function. Different functions will identify different needs and therefore different staffing requirements. In order to achieve the right HR ratio, you will want to focus on the same functions which are compared throughout the company. The value of the service will be determined by the company. Some companies focus extensively on internal customer service while others focus on comprehensive sales and marketing. A dedication to customer service can increase your HR ration by more than 20 percent.
Delivery methods include:
-Little management involvement with a centralised system
-Management involvement with a centralised system
-Little management involvement with a decentralised system
-Management involvement with a decentralised system.
In terms of management involvement, you will find that technology, training, and development will all play a vital role in the success of the department as a whole.
Automation
Automation is also a very important step in identifying the long term size of HR staff in the future. Automated tools can reduce the need for human involvement and therefore shift basic HR functions to supervisors and managers, even employees. Many companies find that implementing a HR automated solution does not provide good staff retention and doesn't help with the reduction of staff in the long run. In fact, many of the HR professionals are deployed to other areas within the company to help with other strategic needs.
Company size
When it comes to staffing calculations, you need to focus on the economic effect HR staff has on a company as it grows. A company that grows in terms of employees will need their HR department to grow as a result to ensure the teams continue to provide outstanding performance moving forward. Once the teams are assembled, the trends start to slow and the volume increases with each new team member. As you can imagine, at this point, there is no need to include any new staff members.
19.12 Identify staffing needs
Too many staff or too few staff can result in problems for a company on a daily basis. It can lead to poor performance and service levels and, in turn, leave the company with a poor reputation which will affect them now and moving forward. It is imperative that staffing requirements are identified based on strategic forecasts and future demand. This is not an easy task and requires experience.
Workforce levels are imperative to the success of any company and, as a result, a shortage in employees will leave current team members overworked and possibly forcing the company to pay overtime as a result. The ill effects a company can experience can range from work stress and high levels of absenteeism to low morale and productivity losses. Excess employees, on the other hand, can cost the company too much money in the long run, resulting in high wage percentages and disputes and conflicts within the company.
19.13 Quantification
Factors that identify employee demand based on company volumes including expansions, improved business climate, and marketing. Availability within the work force can be a result of present staffing levels not being enough, terminations, resignations, or retirements. Employees may also transfer or be promoted, which will leave a gap for a new employee. Prepare a staffing plan which can be used to quantify these factors in order to make an accurate assessment.
An example would be a transport company with 24 vehicles that are operational 24 hours a day. Multiplying 24 vehicles times 24 hours per day for seven days a week gives you a total of 4,032 hours per week. An average driver is allowed to do 40 hours per week before they have to rest. This means you need to divide the 4,032 by 40 to identify that you need 101 drivers. Of course, the staffing issues don't end there and you will find yourself with a serious problem when a driver is on leave or calls in sick, which means that you need to find a replacement and quickly.
You need to keep in mind that the chances of all 24 vehicles being on the road at all times is minimal, as they will need repairs and be idle for a day or two here and there. Now you want to focus on the leave allowed each year, which say is eight weeks each year because of the heavy work load these drivers have to do. That means that the average employee will have 320 hours off per year, which is eight weeks by 40 hours per week. That means that in reality, you have way too few employees. Work this out. An employee takes eight weeks of leave of working 40 hours per week.
With 101 employees all doing the same, you are looking at 32,320 hours each year. Dividing that by 52 weeks will give you an average of 621 hours per month you haven't accounted for. Divide this monthly hourly rate by 40 to get your weekly rate and you will see you are 15 to 16 employees short, which means you actually need 116 or 117 employees to manage the driving on a monthly basis.
Module summary
This module provided you with valuable insight into three very important areas of human resources. You learned about effective strategic planning and what you need to put an effective plan in place. The module also provided you with information on the importance of a mission statement, along with some examples to help you write an effective mission statement for your HR department. Finally, you learned about optimal staffing, HR to employee ration, and how to ensure you don't over-employ or under-employ moving forward.
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