SHRM-CP / SHRM-SCP Certification Exam: Organization - Workforce Management

Functional Area 8—Workforce Management
Here is SHRM’s BoCK definition: Workforce Management refers to HR practices and initiatives that allow the organization to meet its talent needs (e.g., workforce planning, succession planning) and close critical gaps in competencies.

With workforce management, this is where HR will continually be evaluating the ability of the organization’s workforce to meet the competency and talent needs of the organization. Development, productivity, staffing, and effectiveness initiatives will be the core functions of HR’s responsibility within workforce management. Workforce planning and employment is where you will find all the information about staffing, recruiting, interviewing, and employee performance management. Master these, and you will have a strong foundation for HR performance in your employment group.

Key Concepts
- Analysis of labor supply and demand
- Approaches to restructuring (e.g., mergers and acquisitions, downsizing)
- Best practices and techniques for knowledge management, retention, and transfer
- Leadership development and planning (e.g., high-potential development programs)
- Success planning programs and techniques
- Techniques for organizational need-gap analysis (e.g., examination of HR records, interviews, focus groups)
- Workforce planning approaches, techniques, and analyses (e.g., attrition, gap and solution, implementation and evaluation, reduction in force, supply and demand, workforce profile)
The following are the proficiency indicators that SHRM has identified as key concepts:

Organizational Workforce Requirements
Organizational staffing needs expand and contract with the level of organizational productivity requirements. It’s not always a straight-line relationship that would indicate continuous steady growth. Living organizations inhale and exhale, and workloads grow and contract, often at irregular intervals. Workforce requirements expand and contract with those production requirements.

Workforce Requirements
Forecasting results can be converted into employee headcount and budget impact, and the consequences can demand other staffing needs. Adding production workers can cause an increase in payroll support work levels, for example.
Identifying job openings before they exist is the activity known as forecasting. It is best performed with the aid of operations managers who will be supervising the new positions. Given what is anticipated for growth (or force reduction), a manager is able to convert workloads into staff requirements. Determining the portion of jobs that will be part-time versus those that will be full-time is another contribution of the forecasting process.
Forecasting staffing needs is usually done in terms of the number of full-time equivalent people. That unit value is also favored for budgeting activities.

Here is the formula:
Full-time equivalent (FTE) people required = total functional workload / workload handled by one person

Organizational Structure
Aligning the way the parts of an organization relate to one another is considered the organizational structure. HR professionals need to be familiar with organizational structures so they can act as a guide for management in selecting and determining which structure would be best to gain the best performance.

There are six types of organizational structures.
- Departmental
- Chain of command
- Span of control
- Work specialization
- Formalized
- Centralized or decentralized
- Matrix

Restructuring
The act of restructuring the structures of an organization for the purpose of making it more profitable, or better organized, is known as corporate restructuring. Additional changes can necessitate restructuring such as a change of ownership or a bankruptcy filing. Restructuring can include selling off portions, or divesting, to reduce debt or operations. The 1980s experienced a heyday of restructuring because of the rampant undervaluation of publicly traded organizations that attracted hostile takeover attempts. If the targeted organization was lucky enough to find a major investor to ward off the hostile takeover attempt (known as a white knight), the aftermath usually involved a tremendous amount of debt and then restructuring and divesting to pay off the white knight and debt.
During the recent great recession, corporate restructuring occurred as a result of economic decline to reduce financial losses from the lack of revenue. The basic nature of restructuring is a zero-sum game. It can quickly reduce financial losses and simultaneously reduce the tensions between major stakeholders (shareholders) and the overriding condition prompting the distressed situation.
 

Drivers of Restructuring
Two major reasons for restructuring are divestiture and mergers and acquisitions.
Forms of Restructuring
There are perhaps seven different forms of restructuring. Each is based on specific needs generated just prior to the restructuring efforts.
Downsizing
When production demand drops, for whatever reason, the number of employees required to meet the production requirements will also fall. Adjusting to that diminished level of production is called downsizing, layoff, rightsizing, smart-sizing, or bad luck. It doesn’t matter what percentage of the workforce will be impacted through layoffs. For each individual who receives a pink slip notice, the number is 100 percent. How that process is handled is a topic to be discussed elsewhere.
When the Bell System underwent a seismic rupture in 1982 because Judge Green ordered it to divest the unregulated portions of the Bell Telephone companies, there were more workers than needed in the new unregulated company. Before the judge’s order, the Bell System was composed of 23 operating companies, AT&T, Western Electric, and Bell Labs. Together they were the largest employer in the country with 1,100,000 employees. After the spin-off, the new company was called American Bell and began its life on January 1, 1983, with 100,000 employees and zero revenue. It operated on loans from the other companies. Its reason for being was to sell private branch exchange telephone service to business customers. So, there were marketing people and technical people, too many of each in fact. Thus, it became necessary to develop the first mass industrial layoff in history. The company started with a layoff of 24,000 people in 1983 and followed it with additional large groups of downsizing in subsequent years. That represented a 24 percent reduction in workforce in the first wave of cuts. By any standard, that was substantial downsizing.
 

Divestiture
This is what the Bell System underwent in 1983. It had to divest itself of the unregulated portion of its business to allow other companies to compete for that customer money. It can also be done when the parent company wants to become more competitive in new business ventures.
In 1911, the U.S. Supreme Court ruled that Standard Oil was an illegal monopoly. Standard Oil at the time was producing, transporting, refining, and marketing oil, gasoline, and other oil-related products such as grease and kerosene. It was ordered to divest itself of the various components into smaller companies so it would be possible for others to enter the marketplace.
 

Restructuring
As you have seen, restructuring can be done voluntarily or involuntarily. The Bell System and Standard Oil breakups were court-ordered. When done voluntarily, the effort is sometimes called unbundling. Some options for unbundling include sell-offs, spin-offs, carve-outs, and buyouts.
 

Redistribution of Decision-Making Authority
Organizational structure can determine decision-making authority. Centralizing the organization can pull decision-making into the core headquarters establishment. Decentralizing the organization can push decision-making out into the remote locations. This can be true whether the remote locations happen to have independent corporate identity.
Extended Organization
In 2000 Sara Lee began merging various brands to “create smaller, customer-focused teams. In meats alone, for instance, Sara Lee had 10 different brands, including Ball Park, Hillshire Farms, Bryan, and Jimmy Dean.”with ten different sales reps and process ten different invoices each month. “The new customer-focused teams reduced duplication and were more convenient for buyers—a win-win situation. National retailers responded by increasing their orders for Sara Lee products.”30
Mergers and Acquisitions (M&A) and Divestiture
Mergers, acquisitions, and divestiture are daily occurrences in organizations for restructuring an organization. In some industries, it’s become an annual expected event to restructure, and in others, such as technology, M&A has become the norm. HR professionals need to know the importance of their role with workforce planning when it comes to these activities.
Divestiture
Organizations divest to refocus, rethink, and restructure their core business capabilities with an ultimate goal to be leaner and more cost effective. Going from big to smaller, or refocusing on the core product/service that the organization offers by selling off a separate line of business arms, can present a variety of challenges for HR. To minimize the disruption of operations and employees during divestiture, HR may need to redefine some of the organizational structure that is currently in place. Reviewing re-employment policies, severance packages, and employee classifications and job descriptions for either increased or decreased responsibilities are just a few considerations.
Mergers and Acquisitions
Mergers and acquisitions (M&A) are intended to enhance an organization by accessing market share or increasing assets. It is best to involve HR right from the get-go to plan for the effects that mergers and acquisitions have on an organization, such as culture blending, job function redundancy, and comparison of benefits/compensation/job titles, along with effects on HR information systems, policies/procedures/ethics, and, if there is a union, collective bargaining.

The M&A process has four basic phases, which are covered in the following sections.
Preparation
You must first ascertain whether the HR staff has the necessary knowledge, strategic planning, and project management skills for managing the transition of an M&A.
Due Diligence Production
The due diligence stage is next, which includes scrutinizing not just the financials but many of the other risks associated with HR. The organization’s workforce-related risks are just the tip of the iceberg. Factoring in people matters are more difficult to quantify and yet absolutely crucial.
Research and investigation are needed on the proposed M&A organization to determine the technology differences and needs, structural and talent risks, and cultural issues that will arise. The sheer recognition that two cultures must be brought together and blended to create a collaborative, high-performance new organization is daunting. Compliance, corporate governance, and legal claims/lawsuit information—those in process and those that appear on the horizon as a potential threat—would additionally be reviewed and understood at this phase. It is important to understand that oversimplifying these risks can lead to misguided integration planning, unexpected costs, and loss of critical talent.
Integration Planning
Here’s where a good strategic planning process resulting in goals and objectives is necessary, along with project management implementation. A change management plan associated with a culture blending process, communication strategies, and consolidation activities occurs during this phase.
Implementation, Measurement, and Monitoring Results
The process is not complete when the organizations are finished with the M&A. HR plays a vital role in monitoring the pulse and mood, assisting with workforces that have blended successfully, and helping to troubleshoot new issues that may have occurred during integration. Employees, after all, will be the implementers of the changes to enable an organization to realize the goals of the merger. Creating metrics and milestones that measure the intended results the organization set out to achieve, with respect to the people related value of the deal, is the last phase for HR.
 

Transition Tactics
During a major transition, management often expects leadership transitions to happen without major changes in the acquired business. When clarity and trust are most needed, it’s possible that leadership may appear more focused on itself (individuals impacted personally by the transition) than on taking care of its anxious people. Employees can’t help noticing the disconnection between leadership’s actions and words, with potentially damaging effects of costly turnover of valued employees and serious morale and productivity problems. Poor people management and communication drain financial value from many changeovers.
Having a clear vision and consistent frequent communication about organizational transition is vital. Creating a strategic blueprint should revolve around communication, not just to the workforce but also to other stakeholders such as the customers and communities served by the organization (plural in the case of M&A). The best transition tactics revolve around trust and communication. Leadership groups must move forward together, fully aligned, and “owning” the strategic blueprint of the newly created vision in sharing its messages. If the messages and themes that are expressed to all parties are not consistent, then confusion, fear, and a lack of faith in the transition process will likely occur. Those signals could send tremors of uncertainty throughout the organization. The workforce can surely be counted on to fill a vacuum of information with worse-case scenario rumors, in terms of who will be retained, who will be let go, and how the everyday rules of the game will change.
 

Downsizing
Downsizing is the act of reducing the size of a workforce. It can be done for many different reasons, but the end result is fewer people work at the employer than in the past. In the past few decades, corporate downsizing has become a widely used tool. The impact on individual employees has been immense. To help mitigate that impact, employers have sometimes offered incentive programs with cash buyouts based on the length of service and/or retirement qualification enhancements. Offers have sometimes included months- or years-long support in a job search (providing an office, telephone, computer, e-mail, secretarial support), formal outplacement service through a third-party vendor, and occupational training programs to provide new skills necessary for a career in a new field.

Organizational Interventions
Aside from redesigning the organizational structure, the science of organizational development (OD) can be used to help solve problems with organizations through various interventions.
- Team building
- Creating common values
- Creating a vision
- Creating a specific role for each organizational segment
- Facilitating problem-solving sessions focused on organizational structure

Workforce Planning
The exercise known as workforce planning is based on the notion that you want a balance between the work to be done and the workers available to do it. Over time, that balance will change, shifting toward one side of the equation or the other.

Workforce Planning Process
There are many approaches you can take to workforce planning. All of them, ultimately, boil down to one thing, analyzing the gap between what you estimate will be the staffing requirement and the staff you have available to meet that requirement. Once the gap is determined, then plans can be laid to identify action steps that will be necessary to narrow that gap.
 

Supply Analysis
This is a strategic evaluation of supply chain options such as sourcing alternatives, plant locations, and warehouse locations. Will the workforce you need be available in the location where you want it?
Trend and Ratio Analysis Projections
Ratio analysis compares current results or historic results but always at a point in time. Trend analysis compares historical results with current results and identifies what may happen in the future based on the trend of data in the past.
Turnover Analysis
There are many possible reasons for employees leaving the payroll, including resignation, dismissal, death, long-term disability, and transfer to another subordinate company within the same parent company. Identifying the reasons that employees are leaving provides the data needed to analyze trends and identify potential problems within the organization. If supervisors are causing high resignation rates, it may be appropriate to train the supervisors or take some other action to reduce the rate at which their subordinates are leaving.
Flow Analysis
This can involve analysis of data, analysis of production line movement, or analysis of order processing, among other possibilities. How processes operate and how flows of products, data, or other items go through those processes are the objective of this type of monitoring.

Demand Analysis
It is interesting to look forward to determine what customers, clients, or patrons will want in the future.
Judgmental Forecasts
These are projections based on subjective inputs. This method is often used when there is a short time to draw a conclusion or data is outdated or unavailable.
Statistical Forecasts
These approaches to analysis use mathematical formulas to identify patterns and trends. Once identified, the trends are analyzed again for mathematical reasonableness.

Gap Analysis
Measuring the distance (or difference) between where you are and where you want to be is known as gap analysis. If you have to train all employees in certain safety procedures, you can use gap analysis to determine what portion of the population has yet to receive the training, or any portion of the training.
Prioritizing the Gaps
Identifying the gaps is the first step. Then, it is a good idea to determine the relevant importance of each portion of the results that need attention. Safety training may be more important (and greater priority) than training on the new benefit forms. Product feature training may be higher priority than updates on vacation scheduling procedures. Setting priorities for all components of the gap is important.
 

Defining Tactical Objectives
“Tactical plans are sometimes called short-term action plans because they break down bigger-picture goals and strategies into narrower, actionable tasks. The key to a well-developed tactical plan is having specifically stated actions assigned to particular employees with specific deadlines. So, identifying specific objectives to be worked on and determining who will do what by what date is the tactical planning component.

The following action plan is an example of tactical objectives:

 

Solution Analysis
In problem-solving, once the problem has been identified, identifying potential solutions comes next. Every solution suggested should be written on a list, regardless of whether you think it might actually work. After identifying all the possible solutions you can, begin writing a list of criteria that are absolutely required of any solution you choose. These are the must-haves. Criteria tell us that no solution will work if it doesn’t meet all of these requirements. Next, compare each suggested solution with the list of criteria and scratch off the list any solution that does not fully meet all of the criteria requirements. What is left will be a list of solutions that can each satisfy the criteria. You may then make a selection from the surviving list of solutions.

When multiple solutions meet all the criteria, using regression analysis can help you decide which one is best for you. For example, it might be possible to solve the problem of turnover by creating a management skills training program. It also might be possible to solve the turnover problem by providing different employee benefits that are more appealing to the workers. It could also be that offering continuing education to employees would have an impact on turnover. Each of those solutions could work. You can determine how well each works by using regression analysis to calculate the contribution each could make to the problem of turnover control. This analysis considers that there is some value to be contributed by each different solution. If you can’t choose all of them, where will you get the greatest impact for your investment of time and money?

The Staffing Plan
Once a list of organizational objectives is determined, it is possible to begin the process of determining the quantity of employees that will be needed in each function to accomplish those objectives.

Statement of Purpose
The purpose of your staffing plan should be simply stated. Universally, staffing involves the activities associated with filling job openings. Candidates can come from both internal and external sources. So, the purpose can be stated like this: “Our staffing plan is designed to meet our employment needs with the right skills in the right jobs at the right time.”

Stakeholders
Everyone who has something at risk if the job openings are not filled with qualified individuals at the proper time is considered a stakeholder. This includes the HR manager, the staffing manager, recruiters, operations managers and supervisors, production managers and supervisors, job candidates, interns, job advertising vendors, Internet sources, and more.
Everyone who has a “stake” in the success of your staffing efforts will fall into this grouping. Not all stakeholders will have the same level of interest or amount of risk involved, however. The supervisor trying to fill the job opening will have the most to gain or lose in the successful completion of the staffing efforts. The HR department’s reputation will rise or fall depending on how well it develops the staffing plan and then implements its actions.

Activities and Tasks
What is involved in a staffing plan and its implementation? More or less it depends on the size of your organization. The larger the organization, the more complex the staffing plan will be. Larger organizations have more complex policies and procedures. Small organizations are more flexible and less encumbered by detailed policies.
Some of the activities you will find in staffing plans are as follows:
- Identify the organizational goals needing employee support
- Identify the quantity of full-time equivalent (FTE) employees each goal will need
- Specify the knowledge, skills, and abilities (KSAs) each position will require
- Identify candidate sources, considering diversity efforts and KSA requirements
- Solicit job applications or resumes from qualified candidates
- Screen candidates for qualifications
- Select candidates who will likely “fit best” into the job requirements
- Forward candidate records to selecting manager for consideration
- Schedule interviews with selecting manager and/or others in the department
- Administer any other screening device/step such as written tests or skill demonstrations
- Make employment selection decision
- Follow up months later to assess the success of the employment selection
- Make any procedural adjustments for the future based on that assessment

Team Members
Staffing processes involve multiple individuals in organizations of any size. In large organizations, there will be individuals who specialize in given segments of the process. In smaller organizations, there will be greater emphasis on generalists who handle multiple functions.
For example, the HR department may have only one person, the HR manager, who is responsible for all phases of the staffing process. However, in the larger counterpart, there may be an entire staff of recruiters working for the HR department. There can even be psychologists involved in employment screening for some large, sophisticated organizations.

Resources
Staffing resources include all of the people, assets, and funding needed to successfully place qualified people into the job openings. If there is a competitive marketplace where you must try to get your qualified candidates, your competitors may be trying to do the same thing. You will need to distinguish your organization from the competition so you can be successful in attracting the people you want on your staff.
There are internal resources from which you can make your staffing selections. Succession plans will help you identify who is “Ready Now” for promotion, who is capable of a lateral transfer, and who still needs some additional training or experience before being considered “Ready Now” for the job in question. While succession plans normally apply to the executive ranks, employee skills inventories can help you determine who is capable of filling job openings through a database of employee KSAs.
In organizations with labor union representation, it is not uncommon to have union-represented jobs filled based on employee seniority. Internal training centers can produce qualified job candidates with each graduating class.
Don’t forget employee referrals. “I know a guy…” can sometimes provide some very appropriate talent for the staffing needs.
External resources include state employment services, veterans groups, state rehabilitation services for disabled job candidates, educational institutions, job fairs, Internet sources such as Monster.com, LinkedIn, Craigslist, school alumni sites, and a host of other service vendors. And, you shouldn’t forget your own organization’s web site. That can be an excellent avenue for job applicants to enter your selection process.

Communication Plan
A staffing plan won’t be very effective unless people important to its success know what should be happening. Letting employees and people outside the organization know that you are hiring and the type of skill sets you want will boost the placement rate and reduce selection time.

Continuous Improvement
As with any other portion of the enterprise, staffing should be the focus of continuous improvement efforts. Small goals that are frequently reached can result in large progress over the course of longer time periods. Kaizen to the Japanese, making frequent assessments of performance and then setting new improvement goals, will result in substantial performance improvement. Japan’s automobile industry overtook the American market because Honda and Toyota presented better-quality products in the 1980s and 1990s.

Employee Development
Employee development programs are an important aspect of talent management, providing employees with opportunities to learn new knowledge and skills, preparing them for future responsibilities and job changes, and increasing their capacity to perform in their current jobs. Job rotation, job enlargement, and job enrichment represent some approaches to employee development. Another could be an apprenticeship program that relates to skills training.
 

NOTE
The U.S. apprenticeship system is regulated by the Bureau of Apprenticeship and Training (BAT).
Higher education tuition reimbursement programs are also offered by many organizations as part of their employee development program. The pursuit of education is normally restricted to an employee’s current occupation or an occupation that exists within the organization.
Other employee development programs that are increasingly on the rise within organizations are those associated with wellness training, stress management, and work-life balance.

Development of Employees
Next to strong retention efforts, employee development is a staffing effort that can lower overall costs and improve morale in the workforce. Giving people the opportunity to expand their skill set when they want to leads to their taking on more responsibility with higher levels of satisfaction. Blocking the wish for learning new skills can only lead to disappointment and discontent.

Talent Management
Talent management involves all the HR strategies and processes that are involved in attracting, developing, engaging, and retaining the KSAs of the workforce to meet the organization’s needs. Talent management goals are simple: manage the human resources initiatives that directly result in employee productivity and that address current and future business needs.
Talent Pools
It’s not just best practice. “Creating and maintaining current skills inventories allow employers to develop succession plans based on current employee skills sets and identify key employees for future openings critical to the company’s leadership and business success. Skills inventories should be reviewed on an ongoing basis and employers should take steps to ensure employees keep their own skills inventory current and updated. By doing so, employers can help ensure the success of their strategic plans and achievement of their company’s short- and long-term goals.”
 

Talent Management Strategies
It is less expensive to tap into the organization’s internal talent pool than it is to conduct an external search for the skills needed in a particular job. So, skill inventories are something that can pay off handsomely. Succession planning, if maintained well, can reduce the panic felt when key people are suddenly out of the picture (death, resignation, long term-illness, or injury). Knowing in advance who has the skills and abilities to do the job, plus the interest and willingness, will accelerate placement efforts.
 

Addressing the Changing Needs of Employees
Nothing in the world is static for very long, and employee needs are no different. Life goes on, and work is just part of our lives. So, when new babies arrive, someone gets seriously ill, or tragedy strikes and an employee has a death in the family, the employer will be faced with some attendance issues and perhaps some ongoing adjustment requests.
 

Flexible Staffing
Growing in popularity, telecommuting is an alternative to traditional staffing where everyone reported to a given work location every day. And, there are other flexible staffing options.
- Job sharing Job sharing is an employment technique that you hear about more and more these days. It offers two or more workers the opportunity to collectively constitute one full-time equivalent employee. One person works the job in the morning, and another works the same job in the afternoon. Considerations involve briefing the “job sharing partner” on the current issues to be dealt with during the next portion of work time. There are some financial considerations, too. Each employee will require the employer’s full contribution toward Social Security and Medicare. That may cost the employee more than if one person were to occupy the position.
 

NOTE
Job sharing can increase morale and provide staffing in situations that otherwise might be difficult.

- Shortened workweeks One option is four 10-hour days per week. Another option involves eight 9-hour days plus one 8-hour day every two weeks, which allows a three-day weekend every other week.
- Phased retirement As opposed to instant full-time retirement, phased retirement is another alternative to full-time employment, which allows an individual to take partial retirement while continuing to work a reduced schedule. It can take the form of job sharing, part-time, seasonal, temporary, or project work.
 

NOTE
 A major advantage of phased retirement is that is allows employees to get used to working less and having more time to themselves. It prevents the sudden shock of not having a work routine that comes with traditional retirement.
 

Alternative Staffing
When looking for alternatives to the FTE 40-hour workweek stereotype, there are some options.
- Project employees Using project hires and contract labor is an alternative to full-time employment. Project hires are people who are recruited and placed on the payroll with the understanding that their employment will be terminated once the project is completed. It is common in organizations that seek out projects from client organizations. A staff is hired for the project and then let go when the project comes to an end.
Contract labor refers to people who are hired for a specific period of time. An organization may believe that the workload will last until this time next year. So, it contracts with people to handle that workload for the year. At the end of the contract, those folks will come off the payroll, whether or not the project has concluded. They could be “extended” (payroll status maintained) for a designated period of time if the workload has not diminished.
- Temporary employees One change to full-time employment is the use of temporary employees. It is not necessary to hire people by putting them on the payroll. Employers can expand their workforce quickly and easily by contracting with temporary talent agencies to satisfy their need for additional people. Temporary workers can be used on production lines, in accounting departments, or in any other portion of an organization experiencing a workload that cannot be handled by the permanent staff. Agencies pay their employees, take care of payroll withholding and tax reporting, add a profit margin, and then pass the final rate to the employer contracting for that help.
- Payrolling When a job needs to be done and the organization does not want to hire someone onto its own payroll to do that job, an alternative is to contract with a vendor who will hire someone to do the job at the client organization. Contractor payrolling is used when you need to adjust to seasonal fluctuations, fill a vacancy while searching for a permanent replacement, bridge the gap in personnel when there is unexpected growth, or use interns for a set period of time. It has many applications, and the greatest benefit is in protecting against charges that the person hired is not an independent contractor but an employee, a problem that cost the company Microsoft just under $100 million in payroll taxes, penalties, fines, and legal fees. This is usually a process used for less than an entire workforce. When single employees or small groups of employees are needed, payrolling services can solve the need.
- Employee leasing through a professional employer organization (PEO) Similar to payrolling, employee leasing is a process of moving employees to another company’s payroll as a service for a client organization. Typically, PEOs will take over the entire workforce in a client company. PEOs provide payroll services, tax tracking and depositing, retirement program management, health care benefit program management, and even employee counseling and support services. In essence, employee leasing is the outsourcing of the human resource department and the payroll function together. Employees usually become employees of both organizations, the client where they perform their work, and the vendor (PEO) that handles the payroll and HR functions for the client. It means both employers are liable for legal compliance.
- Outsourcing and managed service providers (MSPs) Another alternative is outsourcing. Outsourcing is shifting a workload out of the organization through a contract with another employer organization, either here in this country or somewhere else in the world. Managed service providers offer to manage functions as part of a strategic decision to move operations or support functions out of an employment organization to a vendor that can perform them less expensively. Such a decision is designed to allow the client company to focus on key activities within its core business while a vendor handles support activities for the client.
- Temp-to-lease programs When a need exists for employees on a seasonal basis or for jobs that will last longer than a few days or weeks, it is possible for employers to lease their workers from a vendor organization. The vendor provides the underlying employment relationship with the worker. When temporary needs stretch into longer-term needs, it still may not be wise to increase payroll in the client organization. That’s when contracting for temporary agency workers can be converted into long-term employee leases. These workers often have no benefits provided to them. The client organization pays an employment agency a fee in addition to the pay received by the worker assigned to the client. All payroll operations are maintained by the temporary service agency.
- Rehires and transfers When workloads rise unexpectedly, it is sometimes difficult to bring in new hires quickly enough to respond to that increased demand. Rehiring laid-off workers and bringing in transfers from other portions of the organization can sometimes be good solutions. Rehired workers are already trained and can be productive immediately. Transfers from other portions of the organization have the advantage of already knowing the culture and, if coming from similar or identical types of work, can also be productive rather quickly.
- Relocation Moving workers from one location to another outside the normal commute radius requires finding them new living quarters. This can be done on a temporary or permanent basis. If relocation is used to respond to union strikes or increased workload, it will likely be a temporary condition. Employers sometimes rent blocks of rooms in long-term hotel facilities so workers can have cooking and laundry facilities along with living quarters.
Permanent relocation can involve workers selling and buying homes and packing household belongings and shipping them long distances, sometimes across the country or internationally. There are many variables in such action on the part of the employer. Enticing employees to accept relocation can be a high hurdle to overcome. Forcing the change for a spouse’s employment, moving children from one school to another, and accepting a higher cost of living at the new location can require employers to provide financial incentives.

Those incentives can include such things as the following:
- Home purchase/lease escape fees A strategy is offering a guaranteed purchase of the employee’s old home following an appraisal of value. The employee can accept or reject the company’s offer if it might be possible to achieve a higher selling price some other way. When there is a fee involved for canceling property leases, employers can pay that fee for employees.
- Real estate processing fees Escrow fees for selling and buying real property can amount to many dollars. Paying these expenses for a relocating employee can lift that burden and remove another objection to relocating.
- Mortgage subsidy In an inflationary economy, mortgage rates rise. It can sometimes be necessary for employers to pay a portion or all of the increased mortgage rate to get an employee to accept relocation.
- Packing/shipping/unpacking Paying the bill for a moving company to pack, ship, and unpack at the destination is another way to relieve employees of financial burden.
- Funds for taxes on increased taxable income When there are income tax consequences for employees as a result of a relocation, employers sometimes compute a “tax obligation roll-up” and pay that to the employee in a lump sum as withholdings.
 

Work-Life Balance
According to the web site www.worklifebalance.com, the proper definition of the term is meaningful daily achievement and enjoyment in four life quadrants, namely, work, family, friends, and self. That doesn’t mean an equal amount of time spent in each life area. It means whatever is necessary for personal satisfaction. And, employers can help facilitate that achievement if they are sophisticated about employee management and contemporary issues.
 

Measuring Talent Management Effectiveness
Talent management can be defined as putting the right people in the right positions at the right time…and keeping them there. So, measuring that must go more than skin deep into the organization’s policies and procedures.
An ADP white paper on the topic suggests that talent management should “connect investments in human capital with the immutable facts of financial performance.”

Here are some basic measurements it suggests organizations consider. All relate to the return on investment (ROI) employers can expect from their human capital.
- Overall talent retention rate
- Cost to hire talent
- Revenue per full-time employee
- Time it takes to hire talent
- Time to full productivity per full-time employee
- Diversity statistics
- Impact of voluntary and involuntary employee loss rates on revenue
- Average tenure of new hires
- Number of senior positions and the depth of bench strength
- Number of promotions made from within the organization

Succession Planning
Succession planning systematically identifies, assesses, and develops talent as a key component for business success. It is an ongoing process that enables an organization to plan or recover when critical talent is lost. An effective succession plan includes a focus on identifying, developing, and preparing the placement of high-potential employees for future opportunities. It is foolish to assume that key players would provide adequate notice of resignation. Succession planning is not just for the planned events such as retirements; it serves for replacement planning such as when a key player is relocating because of family or perhaps perished in an accident. Succession should be developed to anticipate managerial staffing needs or key employee positions that would interrupt the business process if an incumbent were to vacate.
 

NOTE
Be careful not to exclude employees from a succession plan solely based on their age.

A succession plan contains an identification of high-risk positions along with those positions with known or potentially known vacancy dates (as with retirements). Competencies for those positions are identified, and a gap analysis is conducted with the current workforce potential candidates. Individuals within are identified as high-potential employees, which might include their interest/aspiration in the position. After all, not every individual may be interested in moving into a more responsible position. Tentative plans are created for shortages, which may include seeking outside candidates.

HR is typically responsible for maintaining a candidate database of skills and career development plans, along with the monitoring of development activities. Additionally, HR is responsible for sourcing or creating training needs for candidates.

This figure provides a typical progression of steps in succession planning.

Figure:  Succession planning

Knowledge Management
Knowledge management (KM) is a term that relates to the retention and distribution of organizational knowledge. It is the efficient process of capturing, developing, sharing, and handling of information or resources within a business. KM efforts will generally focus on competitive advantage, innovation, the sharing of lessons from the past, integration, and the renewal cycle of continuous improvement in an organization. Its focus is on the management of internal knowledge held by incumbents as a strategic asset and the mentorship in sharing this knowledge.

Managing Organizational Knowledge
In managing organizational knowledge, organizations identify their collective knowledge to compete, including the creation, storage/retrieval, transfer, and application of knowledge that is pertinent to conducting business. Referred to as knowledge assets, they are one of an organization’s most valuable assets. Knowledge assets include both explicit knowledge (e.g., documented concepts, procedures, and processes) and tacit knowledge (e.g., know-how) that are highly specific to an organization.

Knowledge Management Systems
Today, many organizations and industries as a whole are taking advantage of advanced technologies such as database tools and web-based applications to effectively manage knowledge that their workforce has. Over the last two decades, organizations have leveraged these technologies in their KM initiatives. The ultimate goal of these technologies is to introduce a standardized process to promote a more efficient and effective flow of information and knowledge throughout the organization.
 

Knowledge Management Process
A knowledge management process is creating, sharing, using, and managing the information and knowledge within an organization. It is a multidisciplinary approach to achieving organizational objectives by making the best use of knowledge.
 

Uses of Knowledge Management Systems
There are various uses for knowledge management systems, yet generally they all focus on transferring knowledge seamlessly. “Document, document, document” has been the cry in IT for many years because IT has felt the pain of what it’s like to have a programmer “keep the coding in their head.” when an employee has abruptly and unexpectedly left their employment. An example of a KM system is a central database that stores customer data that is used for sales and marketing analytics. The resulting information that the sales/marketing folks place in the database is knowledge, which is then transferred and shared across the organization. A retrieval tool such as a query system could be used to have a new sales or marketing person learn who is the rep for a particular client and what the status is of that particular relationship in the sales cycle.
 

Strategies for Effective Knowledge Management Systems
Using information systems to manage the knowledge is often a difficult, time-consuming, and tedious task. The following internal and external strategies could help to ensure effective implementation and management of KM systems:

Internal Strategies
- Identify business challenges. This is related to knowledge management and then capturing essential pieces of knowledge. Focus on knowledge that is important to capture and feasible to maintain.
- Obtain executive support. Executives in the organization need to be on board with supporting knowledge management initiatives from both a strategic perspective and a financial perspective. The probability of success increases when the knowledge management effort is a top priority.
- Be patient. Creating a knowledge management system is time-consuming. Managing knowledge is a difficult task with no hard-and-fast rules.
- Get buy-in and input from the users. Many KM initiatives have failed because the system designers neglect user feedback. Involve users at early stages in the design process and incorporate user input on system design requirements. Remember, the objective is to implement a system that users willfully use, not one that is technically sound but remains underutilized because of a lack of buy-in from potential users.
- Celebrate small wins. Use a “control tower” approach, where a specific function is mandated to develop a knowledge management action plans, such as accounts payable. This can result in a favorable approach to ensure small wins throughout the organization by showing how a function created their KM.
- Manage employee behavior. One of the signals of effective KM initiatives is evidence of employee participation. Project leaders should champion changes in KM practices and ensure that the technology provides added value. Moreover, employees should be actively involved in the knowledge management efforts because it is their knowledge that will be leveraged and retained for future.

External Strategies
- Attend KM-oriented training sessions and conferences. KM is a new frontier for many organizations. Attending training sessions and discussing knowledge management problems and best practices with others will serve as an introduction to the challenges.
- Establish a peer network. Establish forums where colleagues are able to demonstrate the latest best practices.
- Benchmark your knowledge management practices. Benchmark your organization’s knowledge management process against competitors to identify areas of strength and weakness.
- Hire a knowledge management expert. Knowledge management experts provide credibility to the organization’s KM efforts especially to stakeholders. Traditional management consultants may be insufficient because they lack the appropriate expertise needed to address KM issues.
 

Social Sharing of Knowledge
Knowledge sharing via enterprise social media (ESN) is increasingly being introduced into large organizations. ESN focuses on the use of online social networks among the employees who share the same roles and responsibilities, generally in large organizations, such as matrix positions (e.g., HR business partners in each manufacturing plant who report to both the plant manager and the headquarters’ HR director). Internally, an enterprise social software may be part of the organization’s intranet. ESNs are also used externally and not just within a particular organization, such as software programmers seeking knowledge shared on blogs and networks to figure out how to code a particular challenge.