An organization needs to maintain the right-sized staff with the right skills and competencies in balance. The goal is to create and manage an adaptive workforce, capable of adjusting quickly to changing business needs.
Many Human Resource (HR) departments have long been relegated to formulating staff policies and administering benefits, but there is much HR can do to help an organization adapt to its changing overall business needs. To play this role, HR must have the right resources in place and be conversant with industry best practices.
Several realities are fueling the need for an adaptive workforce strategy. Mergers necessitate rational choices about combining business units. Internal reorganizations shift responsibilities among business units in ways that obviously affect staffing. Regulatory compliance requires external transparency about how companies function. The shift toward optimization compels more stringent cost management, and a large part of the calculus is creating greater efficiencies in the workforce.
Structuring a workforce to meet the types of challenges outlined above raises issues of internal multi-skilling, external mobility, and alignment of skills and competencies to business imperatives.
Internal multi-skilling: Innovative companies are finding creative approaches to internal resource sharing. For example, an employee hired for one skillset may in fact play a larger cross-functional role based on his or her competencies.
That person might be looked at not just as a whole FTE (full-time employee), but as a resource that can be divided to meet project based needs. Multi-skilled employees are valuable assets in an adaptive workforce because they can be shifted to deploy their skills as they are most needed.
External mobility (owning vs. renting): The balance between permanent vs. contingency staff might be seen in terms of owning versus renting resources. What portion of its workforce should an organization own as permanent staff, and what parts should it rent as consultants or contractors?
Becoming a nimble and flexible organization means defining core skills and competencies, and making sure that hiring practices are geared strictly to those needs.
It makes sense to rent resources for projects with defined datelines, particularly when the skills required do not fit the organizations core set. That means contingent hiring or outsourcing for skills that are specific to finite projects but not widely needed for the organizations full range of business interests.
Aligning skills and competencies to business imperatives: Todays savvy HR departments work with the business units to understand what the resource needs are and shape policies for hiring and outsourcing. Because these definitions change over time, HR should be involved in structured quarterly or semiannual business discussions to stay abreast of the business direction.
HRs Evolving Role
HRs ideal role involves more than translating business imperatives into workforce strategies. If the trend is toward more and more outsourcing, HR must make sure vendor management skills are deployed internally.
For example, if website development is outsourced, the IT or marketing division is still accountable for the effectiveness of the organizations Web presence and must, therefore, be actively involved in managing the outsourced work.
Then there are the larger issues of sourcing strategy: How should contingency workers be used? As a complement to permanent staff? To meet peaks in demand? HR should be involved in decisions about these matters.
As the workforce shifts to meet business needs, HR has a role in managing the transformation. Changes will be needed in the recruiting structure. There must be clear onboarding and sunsetting proceduresparticularly for contingency staff, because they need to become immediately productive as they come on board and released when their skills are no longer required.
Change management within the permanent workforce is another focus. Any shift toward increased outsourcing or contingency hiring is bound to cause strains within business units as employees worry about their jobs and their futures. HR should help the business units in managing the changes.
Finally, HR needs to be involved in performance management. HR has an obvious stake in knowing who the top performers are, and why information that can be carried forward into future staffing practices.
In assuming the HR model proposed here, HR departments will face some challenges. Here are a few:
Companies need strategic support as they maneuver to meet the peaks and valleys in their business cycle with right-sized, competent workforces. HR can provide this support by playing a vital role in shaping the organizations workforce and contributing to effective change management across the enterprise.