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The Workforce Is Changing

Is Your HR Function Changing with It?
For years we’ve known that millennials would eventually make up the majority of the workforce. In April 2016, millennials surpassed baby boomers as the largest living generation. The Pew Research Center defines millennials as individuals born between 1981 and 1997 (or those who are presently between 20 and 36 years of age).¹ As the makeup of the workforce shifts, so do employee needs.

Although current research largely focuses on the needs of the millennial generation, a majority of today’s workforce (not just millennials) want work-life balance, increased performance feedback, communication in many formats, the latest technology and the ability to work in a collaborative environment. The needs of today’s workforce are leading many organizations to evaluate their human resources (HR) function and make adjustments to remain competitive in very tight labor markets.

Taking a Closer Look
HR departments have historically focused on recruiting, payroll, benefits administration and other routine functions. However, successful HR departments are now expanding their focus to include recruiting and selecting the right team members, as well as employee retention, engagement and development. A high-functioning HR department is aligned with business goals and can contribute to organizational growth and a stronger work culture.
To determine if your organization’s HR function is aligned with business goals, start by asking the following questions:

  • Is your HR function represented at the highest level of the organization?
  • Are your HR goals included in the organization’s strategic plan?
  • Does your HR function follow your industry’s best practices?

If you answered “no” to any of the questions above or believe there is room for improvement, you should consider an HR assessment to better understand the potential gaps in your HR function. An HR assessment is a proactive activity that takes an objective look at policies, procedures and practices. There are several ways to conduct an HR assessment. You can perform a self-assessment, or you can partner with an employment law attorney or an HR consultant. Before starting an assessment, you need to consider which areas you want to evaluate, how you are going to collect and record information and who should be included in the process.

It is crucial to involve your organization’s leadership team to ensure that the HR function is meeting business needs. The following questions should be part of the assessment:

  • What services does the HR department provide that are helpful?
  • What is the HR department doing that it should stop doing?
  • Are there additional functions that your HR department should be responsible for?
  • What is the one change your organization should make to positively impact employee retention?

Compensation Comparison
In addition to reviewing policies, procedures and practices, this is an ideal time to review your organization’s compensation strategy. In today’s competitive labor market, it’s important to understand how your compensation structure compares against those of your competitors. A compensation review should include the following questions:

  • Does your compensation philosophy align with your organizational goals?
  • Do current job descriptions exist for every position and have they been reviewed for compliance with the Fair Labor Standards Act (FLSA)?
  • Does your organization have current market data for all positions?
  • When was the last time your salary structure was reviewed and updated?

Organizations often focus on compensation as part of a competitive recruiting strategy and forget to examine the impact on current employees. By increasing starting salaries without increasing current employees’ salaries, you can create compression issues which can contribute to low morale and inadvertently create turnover. It’s imperative to understand the potential impact of any salary changes before they are made.

Engagement Evaluation
Organizations that are successful in recruiting and retaining top talent frequently use employee engagement surveys to understand the wants and needs of their employees. They often reveal that workers strongly value certain benefits such as:

  • Opportunities for training and development
  • Flexible work environments
  • Increased paid time off or leave programs
  • Effective wellness strategies
  • Financial management programs
  • New benefit options (i.e., student loan repayment plans, pet insurance, etc.)

Understanding what is most important to employees can empower you to create a workplace that fosters a happier and more productive workforce – a win-win for everyone.

Ready, Set – Take Action!
After an HR assessment, your organization should use this information to determine the strategic direction of the HR function. The first goal should be to ensure that all compliance requirements are met. You can then begin to determine how your HR department can lead the organization to successfully compete in today’s labor market. To ensure the implementation of your HR strategic plan, it’s important to set goals and establish a timeline that includes deadlines and follow-up items. It’s also important to include a communication plan for employees to acknowledge their needs and to share your plan for enhancing the employee experience. With our extensive background, SilverStone Group’s HR Consulting Team can assist organizations of all sizes, across all industries. Using an integrated approach, we can help your organization conduct an HR assessment, develop effective compensation strategies, mitigate compliance risks and maximize resources. The workforce is changing – now is the time to ensure your HR function is changing with it.

This article originally appeared in the 2017 | ISSUE TWO of the SilverLink magazine, under the title “The Workforce Is Changing | Is Your HR Function Changing with It?” To receive a complimentary subscription to the SilverLink magazine, sign up here.

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