Platt Perspective on Business and Technology

Human Resources and adaptation to change 3: building a baseline for comparison for organizational opportunity and challenge 2

Posted in HR and personnel by Timothy Platt on February 1, 2013

This is my third installment to a series on business and marketplace change and on the impact of this on Human Resources as a department. And as a crucial part of that I also seek to delve into how an effective HR department and its functionalities in turn help to shape the business and its operational planning and strategy (see Part 1: the many faces of change and Part 2: building a baseline for comparison for organizational opportunity and challenge 1.)

I focused on startups and early stage businesses as a baseline starting point in Part 2, there noting how simplest baseline case study can in practice be anything but simple. And as part of that I noted how the seeds of perceived need to develop a consistent Human Resources and Personnel practices approach and a corresponding area of a business to manage that, initially take root from the very beginning. But I still cite the startup as a small and structurally and operationally simplest case, and as constituting as valid a baseline-level example as any that can be found. My goal here is to in effect develop a second baseline reference point through consideration of a more mature and established business.

To clarify what I mean by “a more mature and established business baseline” I will specify that the model business I refer to here:

• Is effectively competitive in its markets and consistently though not dramatically so.
• This is a business that maintains a steady and reliable financial base with consistent incoming revenue and outgoing expenses that are always paid for on a reliable and mutually agreed to days-receivable basis.
• They are not particularly innovative but they are not falling behind the curve of development and innovation in comparison to the businesses they compete with either.
• Their operational processes are stable and relatively unchanging, except in more minor detail as for example when Finance or Information Technology brings in and implements a new business productivity software package or new hardware to stay current, or when similar evolutionary change is made in Production or other functional areas.
• Operational processes and the underlying strategy followed are also stable and consistent and this may even be seen as a core defining virtue and as validation that the business is consistent and reliable.
• And headcount remains quite stable with low employee turnover, and generally long-term employment for those on payroll. Most employees there work in-house with few if any contract workers or consultants and with any brought in only there for brief periods and to complete specific specialized tasks or to address specific peak season needs.
• And looking outside of the business itself and to the context that it functions in, its marketplace and the demands placed on it from there are steady and consistent. And any seasonal or other shifts in business faced are consistently reliable and even quite predictable, and well in advance of any shifts and changes from this direction that might be faced.

Many, many businesses fit this basic model at least in broad outline, and in fact the core stability that they collectively bring to overall marketplaces and economies plays a significant and important role in overall economic stability as a whole.

• Human Resources’ primary role here is to help facilitate and maintain order and stability as operationally and strategically set by the business’ leadership going down the table of organization, and as functionally enacted from the business’ hands-on employees going up that table of organization.
• A priority is on staff retention: most everyone there has a long and rich history with the business and a significant level of expertise in the business and its ways that enable them to perform more effectively in their jobs and as they collaboratively work together.
• A matching priority is on facilitating cost-effective personnel-related processes and on managing personnel costs to the business as a source of fixed operating expenses. As a specific example there, that means finding and securing the most cost-effective employee health insurance and other benefits package components as possible for the company, while still meeting operationally determined genuine employee needs and employer obligations for meeting them.
• When new full time employees are needed, hiring processes and policy as coming from or carried out by Human Resources are stability oriented. And when short term, contract workers or consultants are brought in, this same approach applies. That can mean seasonally needed extra hands or it can mean short-term fill-in employees to for example, provide coverage for work performed by a special skills employee out on maternity leave or absent due to recoverable illness. Or this can mean bringing in the right specialized consultants needed short term for management and completion of specialized tasks that would not be recurring to the point where an in-house employee would be called for.
• And with this, I return briefly to my startup example of Part 2 and a point I initially raised there in its context – in practice and when general models play out in real world day to day businesses, simple does not mean static or even mean all that simple. And in this context and coming back to consider the more mature businesses of this posting that means that
• Human Resources always deals with a shifting dynamic balance of needs and costs, and of prioritization as to which of those two concerns prevails where and when and at what balance points.

I am going to continue this discussion in my next series installment, beginning with that last bullet point and the stable mature business model case. I will then add in the complexity of innovation and market-driven pressures to innovate and look into the impact of that on Human Resources, and how HR systems in place in turn effect overall operational and strategic planning and execution. Meanwhile, you can find this and related postings at HR and Personnel.

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