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Management Services Spring 2012
Human capital management
Human Capital Management
By Alan Erskine, Managing Partner, Adventis Consulting.
y adopting the concept of ‘human capital management’, managers can ensure that the large workforces, on which they depend, remain motivated and productive, but this can only be achieved by facilitating closer collaboration between operations, HR and IT professionals within the organisation.
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In an increasingly service- orientated global economy, more and more organisations have large numbers of employees working in frontline roles on a 24/7 basis. For those organisations, the workforce accounts for a large proportion of costs. The way it is managed and deployed is a critical success factor and fundamental to profi tability and growth. Talk to operational
managers in these companies and they will tell you that one of their biggest headaches is getting the right people working at the right time to meet customer needs. Even when people are contracted to work shifts, it can be diffi cult to cover certain times, such as weekends and school holidays.
Diffi cult balancing act This problem certainly affects public services. For example, a recent UK Government report highlighted that, despite the demands of the job, there are more police offi cers on duty on a Monday morning
than on a Friday night. This situation clearly illustrates how diffi cult it is for some organisations to balance the needs of their customers with those of their employees. Until now, one of the main problems has been in scheduling hundreds, sometimes thousands of staff. The sheer complexity has tended to result in a ‘keep it simple’ approach with all staff scheduled to cover all times of the day on a rotation or roster basis. This produces a situation where employees have different start and fi nish times every week. While suiting some, it causes diffi culties for a great number of people, such as parents who end up requiring highly fl exible childcare provision. Even when employees are scheduled to cover the necessary work time, late notice absences (calling in sick) can impact service levels, which is a major problem in some industries. Spare resources can be scheduled to provide contingency, but it costs a lot of money to pay people just in case they are needed. Fortunately, a new breed of workforce management applications, which enable organisations to up their game, is now available. Paper-based systems, still used by many organisations for scheduling and allocating staff, can be replaced with software that allows more
complex work patterns to be managed successfully.
The workforce management software integrates seamlessly with fi nance and payroll systems, providing a comprehensive and data-rich picture of human resources. This enables organisations to take a more holistic approach to the way they contract with and optimise the time of their employees. This approach is often described as ‘human capital management’.
Take advantage Surprisingly, many
organisations already have much of this functionality or, at least, the potential to develop it within their existing systems. However, they are not taking advantage of it and the main reason for this situation is poor internal collaboration, especially between the operations, HR and IT functions of the organisation. Here is a typical scenario. The organisation invests in a new HR and payroll system. The project is led by fi nance or HR with limited involvement from operations. The emphasis is, understandably, on achieving a system that pays people accurately. The system is also developed to provide basic HR reporting, such as headcount, employee profi le and turnover. Once these two objectives are achieved, the project basically ends or runs out of money.
As a result, the organisation is left with an extremely
valuable but under-utilised asset: a system that contains all the information needed to optimise the workforce. However, because of the way it has been introduced, no-one in the organisation has a full understanding of what it can do. As a consequence, the full potential of the system remains unexploited. This situation creates a perfect opportunity for forward-looking managers to utilise their expertise and the capabilities of the new technology to support the profi tability and growth of the organisation. This is precisely what many HR and IT professionals are currently seeking – a way to add greater tangible value to the organisation they work for – but they can only succeed by collaborating closely with their colleagues in operations. The fi rst step is to achieve the most effi cient and economic deployment of people, often described as ‘workforce management’. Effi ciency and economy are not necessarily the same thing. Having the right number of people working is one aspect. When individual work patterns attract different pay enhancements, achieving the most economic allocation of people is a further consideration.
The key is to get a cross- functional team working on the way labour costs are measured and controlled. Take a look at how this is done at
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