Workplace Challenges
Will HR be ready to take the helm?The perfect storm“The primary mission of human resources departments is to ensure all the organization’s primary goals through the quality of workers they keep,” says Robert Isaac, professor of organizational behaviour at the University of Calgary. by AUSTIN MACDONALD |
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 [ 2007-07-18 ] |
© 2007 Jupiterimages Corporation
The million-dollar question: How to retain the employees who can ensure those goals, when a workforce emergency looms like a cloud over North America?
“We’re facing a lot of changes in demographics,” Isaac warns. “The continued employment of older workers may slow the trend, but if every baby boomer retires we’ll be in a real crisis.”
In as few as three years, the first cohort of baby boomers will reach 65, and the younger baby bust generations won’t be large enough to replace them. It’s the perfect storm. To navigate the shrinking workforce, businesses will depend on their HR teams like never before.
HR managers are generally thought of as efficient cost-centre administrators, responsible for up to 20% of corporate expenses – but working below deck, out of sight. The coming demographic thunderclap is about to change this. Now HR experts must be ready to enter boardrooms, best foot forward, and become strategic partners-for-profit with their organization’s other chief executives.
Retention, retention, retention
As more workers retire, the employment market will be characterized by a talent war over the labour pool. The winners will be those that can muster the most employee “engagement”: HR shorthand for the binding forces that keep top talent onboard.
According to Laura Williams, executive at the Canadian Council of Human Resources Associations (CCHRA): “We define employee engagement in very specific, behavioural terms. It’s about measuring the state of emotional and intellectual involvement or commitment of the workforce. Employees are engaged when they speak positively about the organization, have an intense desire to be part of the team, and exert extra effort to contribute to business success.”
Sounds simple enough. In light of the brewing labour shortage, however, it means HR strategies will have to become more comprehensive, aligning with employee expectations as wide-ranging as work–life balance, ethical workplaces and corporate social responsibility.
The problem of employee retention may be multifaceted, but two considerations stand out from the pack: the future of salaries and the creation of stronger leaders.
Can’t buy me love
Corporate Canada’s spendthrift approach to human capital is about to undergo a sea change, as qualified and experienced workers become fewer and farther between. That said, in a job-seeker’s market, salaries won’t be the whole answer.
“Organizations can’t simply buy people with money,” explains Gervase Busche, professor at Simon Fraser University’s Segal Graduate School of Business. “They retain employees by appealing to their values.”
In fact, a recent study by Toronto-based workplace consultants Shepell•fgi Research Group finds that salary may have less to do with an employee’s willingness to stay put than initially suspected. Being well-treated and having high regard for management are twice as important as factors such as pay or benefits.
Building a better boss
Busche goes further to say, “Employees don’t quit jobs – they quit bosses.”
Bad bosses cause shockwaves of cynicism, slack attitudes and absenteeism among subordinates. Naturally, this kind of psychodrama can prove very costly to organizations in terms of lost productivity, before one even considers the disaster of losing valued employees during a time of workforce contraction.
Busche zeros in on the challenge HR has to face: “The person I report to makes me like my job, so how do we teach our managers to be people we want to work for? Leadership development has gained new importance.”
Filling the leadership vacuum is another area where HR departments can make a decisive impact on retention rates.
“Retention depends on the quality of leadership and supervision,” Busche says. “In this, HRMs can find new ways to save, driving down the cost through technology and outsourcing.”
Transforming company decision makers into charismatic leaders, who rally the loyalty of skilled workers rather than send them running, is one of an HR manager’s best weapons for continuing to extract the best that the labour market has to offer.
The 21st century in Canada will be defined by our aging society. The baby boomer generation is about to retire en masse, and the stormy people problem this poses will revolutionize the profile of human resources in the corporate structure.
As Isaac confirms, “The more a company depends on the knowledge of its workers as an asset, the more crucial their HR strategy for retention will become in the future.”
Do you have you a bad boss?