Developing recruitment partnerships

By NEHRA, 2/17/2004

The beginning of the year is traditionally a time for taking stock, looking ahead and making sure your house is in order. With the economy moving towards recovery, it is particularly timely for businesses to reassess where they are, where they want to go, and how to get there.

HR should be a key element in this strategic assessment process. One of an organization's most valuable assets is its employees - they are instrumental in determining a company's growth and its ability to meet its business objectives. Many successful companies place a great deal of value in the relationship between employer and employees and have established exemplary HR operations and processes. According to Watson Wyatt's landmark Human Capital Index research, companies with superior human capital practices were able to nearly double their shareholder value in comparison to other companies.

The first step in getting a company's HR house in order is to conduct an HR audit. This relatively inexpensive and short-term process enables organizations to evaluate their human resource practices and identify areas for growth. Through an audit, companies can assess where they are, uncover any issues they may have, and determine how they can best align HR operations with business goals.

Two main components

An audit consists of two main components: a thorough compliance review and a strategic assessment of HR practices. Compliance has become a very hot issue for companies. State and Federal laws govern fair practices in the areas of compensation, employment, harassment, workplace safety, termination, corrective action, policies and procedures, benefits administration, records maintenance, and overtime for wage and hourly employees. While the complex employment laws are constantly changing and difficult to track, the penalties for non-compliance are stiff. Failure to comply with regulations can result in costly fines, retroactive penalties, and in the most extreme cases, imprisonment for employers.

The second component, which is equally as important as compliance, is determining how a company's HR practices can be strategically aligned with the goals of the organization. Hiring the right employees and motivating them and providing key training and development opportunities are of strategic importance. Through interviews with senior management and outstanding employees, along with an analysis of current HR practices, an audit will help companies identify how they can best leverage the value of their employees and position their company for growth.

While an audit can be conducted in-house, many companies prefer to turn to outside consultants because they are objective and can fully concentrate their efforts on this project for the timeframe that is needed. Also, many companies find that managers and employees are more open and frank when speaking with someone outside an organization.

A local nonprofit

An audit can also help growing organizations reassess and change HR structures and procedures to accommodate their expansion. For example, the Colonel Daniel Marr Boys and Girls Club of Dorchester, an organization that provides important youth development services, has undergone explosive growth over the past five years. Meeting a critical need in the community, it grew from a small organization in one location in 1974, to three facilities that service 3,700 children annually. The forward-thinking Board of Directors, under the leadership of Club President Bob Scannell, recognized that HR was going to play a key role in supporting the organization's continued growth, and they created a new senior level HR position. Under the direction of Kirsten DiChiappari, the new Director of Human Resources, the Club worked with an outside firm to conduct an HR audit and assist with strategic HR planning.

"The audit helped crystallize what the HR department needs to do to support the Club's growth today and into the future," said DiChiappari. "For example, because our staff is spread over three facilities, we had to very clearly and carefully define HR procedures and benefits. We also identified the specific manpower needs and skill sets to support our multiple facilities.

"The outside audit also helped establish organization-wide consensus and support for the goals of the HR department," DiChiappari added. "Now with our priorities in order and our direction set, HR can most effectively support the Club in our key mission - helping each child to realize his or her full potential."

A global company

Coley Pharmaceutical, a global company that develops immunoregulatory drugs, turned to an HR outsourcing firm when it needed to conduct an audit. "An outside firm offered an objectivity that forced us to re-examine our HR practices at the deepest levels," said Frank Miklavic, Coley's Vice President of Global HR. "They brought a rigor to the process that helped us assess where we were, where our gaps were, and how to most effectively move the organization forward."

As Coley grew, it began competing for talent with large pharmaceutical companies. Coley President and CEO Bob Bratzler believed in the importance of the company's employees and recognized the need to establish competitive global HR practices. Coley worked with an outside HR firm on an audit that addressed several key areas, including compliance, competitive hiring and retention programs, and HR support for the growing, global organization.

"The company's primary assets walk in and out of the door every day," said Miklavic. "It is our people, and the leading edge work they perform, that are the cornerstones of our company's success. The audit helped us shape a new global HR organization that offers highly competitive hiring and retention policies to attract and keep outstanding talent. We also developed an affirmative action program, upgraded pay and benefits, and focused on creating a strong, positive corporate culture."

The New Year and beyond

There are many reasons for companies to conduct HR audits. Sometimes a company will initiate an audit for one reason but in the process uncover other areas that need to be addressed. Regardless of the motivation, the benefits of this cost-effective, short-term process are tremendous. An audit provides peace of mind on critical compliance issues as well as a road map on how HR can strategically support the growth and future of an organization. Starting 2004 by getting your HR house in order will create a solid foundation for addressing your business goals in the New Year and beyond.

Nancy R. Mobley, SPHR, is President and CEO of Insight Performance Improvement, Inc., and is also a NEHRA member. She can be reached at info@insightperformance.com or at (781) 326-8201.