Why HR management is a top priority

When 60 percent of your company's budget is spent on human capital, wages, taxes and benefits, making human resource management a priority for your company becomes the best way to insure this expense center is working effectively to support your productivity, goals and overall profitability. Quality assurance, customer service and productivity initiatives are all driven by your employees and your employees are guided, supported and managed with an effective human resources plan and budget.

So why don't companies invest in their human capital and human resource infrastructure? Some smaller companies believe they don't have the capital resources to maintain a human resource "department" or staff member, or they don't view themselves as big enough to consider human resources as an important aspect of their company structure. During the economic boom, some managers didn't think there was a need to invest in their employees or their human resource department goals and initiatives because their company was growing. With the downturn in the economy, managers don't think that they can afford to invest in their employees or human resources. Now is a great time to view human resources as a viable investment tool, one that contributes to your bottom line and one that deserves a respected seat at the boardroom table.

So what does this mean for an employer and what does it mean to invest in your human capital? It depends on the company and the dynamics of its individuals. Each company has its own unique culture based on the goals of the organization, the management style and the individuals involved.

First determine the short-term and long-term business goals of the organization and integrate the organization's mission, vision, values, objectives and strategic goals into them. For example, if you want to identify yourself as the company in your field that has the best customer service, then you will need to include hiring, training and employee recognition programs and policies that support your excellent customer service initiative in your human resource strategic plan. Identify the employee that you think provides the best customer service and determine what makes that person the best at what they do. Build your recruiting, training and retention programs around the qualities and best practices your star customer service employee represents.

What human capital influences determine the likelihood that the company will reach its goals? There are several, for example hiring qualified staff, providing the proper orientation, training, employee management, management training, review process, employee compensation and recognition programs and balancing the employer and employee needs in support of the organization's strategic goals, objectives and values. It is important to continually engage employees and management in determining how effective your current human resource policies and initiatives are and identifying any issues that are creating roadblocks to the company's overall success.

Next you will need a benchmark so that you can evaluate where your organization is right now against where your company is once you've implemented your human resource initiatives. The benchmark should include something quantifiable. For example: How many times the phone rings before a customer is helped. How long is the customer on hold. Or the customer service score a customer gives you at the end of their call. Using our example of building a company known for excellent customer service, you may want to survey your current customer base to determine both their current views on your customer service and their suggestions for improvement. You may also survey your employees to determine their suggestions for providing the best customer service and how that is best accomplished. Based on your survey results you will know where you stand currently and you will also know where you need to improve and have employee and management suggestions for implementing those improvements.

Analyze the data to determine how your human resource policies and initiatives can be created or revised to support the goals of the company. Look at industry leaders to discover how they are utilizing their human resource policies to support and achieve their overall corporate goals. Determine how and where to invest time and funding into the company's human resources. If you don't know where to begin in this process you may want to hire a company to help you determine what your human resource infrastructure needs are and then assist you in determining how you can use your human resource policies and your human capital initiatives to meet your overall company goals and objectives. Including your management team in the development of any initiative will help insure its successful implementation and also help insure employee support and buy in once it's put into place.

Finally, be willing to revisit your human resource and human capital policies and initiatives on a regular basis, at least yearly. It's important to insure that your overall company goals and objectives are still being meet and when making that determination to also determine if your human resource structure and policies continue to support the achievement of the company goals and objectives. Sometimes goals change and the initiatives and infrastructure supporting those goals then need to change as well. Other times, what's worked in the past to support company goals is no longer working and needs to be revisited and revised.

When you sit down to develop your corporate plan of goals and objectives for the coming year and beyond, it is imperative to include how your employees fit into the accomplishment of those goals. Inevitably the employees' work habits, work environment and attitudes will either contribute or detract from the attainment of the company goals. This is why including human resources policies and initiatives as a factor in your overall company's success is important. With, on average, 60 percent of your operating budget going to your human capital, why not make that capital work for you? Even better, create a win-win environment that supports the goals and objectives of both the company and its human capital.

Diana Albiniano is director of operations at Solutions At Work, a Reno-based human resources consulting firm. Contact her at 827-9675 or diana@mysolutionsatwork.com.