Remodeling human resources can pay big dividends

During the current economic downturn, many companies are reviewing all aspects of their business to uncover ways to decrease expenditures and increase efficiencies.

It is not uncommon for every department in a company to be held accountable for measurable results, except for the human resources department. Nonetheless, five areas in the human resource department should be analyzed and redesigned:

First, determine the percentage of success in selection decisions, with success defined as an individual with the education, experience and personality that fits the job, department and company and stays in the organization.

Ascertain the length of time desired for associates to remain in each position within the enterprise.

Decide the success rate by compiling a list of every person hired and analyze their effectiveness and length of employment.

Don't feel alone if your percentage is low. A recent "Wall Street Journal" article stated the majority of businesses experience a selection success rate of 50 percent.

To equate that to dollars, the cost to replace one staff member, according to the Society of Human Resource Management, is 50 percent of a worker's first year salary. Accordingly, expenditures and bottom line have been significantly impacted by this problem.

Remember, however, that a problem identified is a problem half-solved. Do not expect to be able to continue current selection practices and obtain different results.

Outsourcing the selection function is one solution likely to be more cost effective. To keep the hiring process in-house, hire an expert in selection who has proven results and request one-on-one or group training with the appropriate personnel in the human resources department.

Second, determine if all the paperwork required and maintained by human resources is absolutely necessary. Review each piece of documentation and ascertain if it will proactively solve problems or save you money by minimizing litigation.

If uncertainty exists regarding legal requirements, obtain a human resource audit by a professional human resource consultant.

Third, calculate the total cost of out-of-house training attended by your staff. Decide if information learned was implemented and attained a positive impact, such as increasing sales, decreasing expenses or solving a problem. If not, change to customized, in-house training to confirm the content is beneficial.

Determine if you need one-on-one training for a certain manager or group training for all your supervisors. Hire a training expert to develop programs geared toward your specific needs. Ensure the trainer develops hand-on exercises with accountability to guarantee the material is actually used.

You will find a significant financial savings and an increase in measurable results.

Fourth, decide if your performance appraisal form and system is viewed as positive by both management and hourly workers.

Is the performance evaluation increasing employee satisfaction, motivation, morale and retention?

Is the supervisor providing honest feedback to the job holder and obtaining feedback in return that will increase sales and production in the department and organization?

Is goal setting actually increasing performance and the realization of corporate objectives? If not, the time has come for a remodeling.

Involve management and associates in creating customized forms that truly reflect job duties and personality characteristics required to be successful in each position.

Include goal setting practices that actually work. Establish practices that encourage managers to supervise employees all year long, including providing timely positive feedback and counseling immediately after an inappropriate behavior occurs. Nothing on the performance evaluation should be a surprise.

Fifth, ensure discipline practices are in place that guarantee unemployment claims will be won and liability will be minimized. Remodel your human resources department and bring statistical accountability to a department traditionally not required to measure results. Then, watch the impact on your bottom line.

(Lynne Haggerman is President/ Owner of Haggerman & Associates, a retained search, outplacement, management training, and human re-sources consulting firm.)