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Employee resourcing strategy

Employee resourcing strategy is concerned with ensuring that the organization obtains and retains the people it needs and employs them efficiently. It is a key part of the strategic human resource management process, which is fundamentally about matching human resources to the strategic and operational needs of the organization and ensuring the full utilization of those resources. It is concerned not only with obtaining and keeping the number and quality of staff required but also with selecting and promoting people who ‘fit’ the culture and the strategic requirements of the organization.

THE OBJECTIVE OF EMPLOYEE RESOURCING STRATEGY

The objective of employee resourcing strategy as expressed by Keep (1989) is ‘To obtain the right basic material in the form of a workforce endowed with the appropriate qualities, skills, knowledge and potential for future training. The selection and recruitment of workers best suited to meeting the needs of the organization ought to form a core activity upon which most other HRM policies geared towards development and motivation could be built.’ The concept that the strategic capability of a firm depends on its resource capability in the shape of people (the resource-based view) provides the rationale for resourcing strategy. The aim of this strategy is therefore to ensure that a firm achieves competitive advantage by employing more capable people than its rivals. These people will have a wider and deeper

154 range of skills and will behave in ways that will maximize their contribution. The organization attracts such people by being ‘the employer of choice’. It retains them by providing better opportunities and rewards than others and by developing a positive psychological contract that increases commitment and creates mutual trust. Furthermore, the organization deploys its people in ways that maximize the added value they supply.

THE STRATEGIC HRM APPROACH TO RESOURCING

HRM places more emphasis than traditional personnel management on finding people whose attitudes and behaviour are likely to be congruent with what management believes to be appropriate and conducive to success. In the words of Townley (1989), organizations are concentrating more on ‘the attitudinal and behavioural characteristics of employees’. This tendency has its dangers. Innovative and adaptive organizations need non-conformists, even mavericks, who can ‘buck the system’. If managers recruit people ‘in their own image’ there is the risk of staffing the organization with conformist clones and of perpetuating a dysfunctional culture – one that may have been successful in the past but is no longer appropriate in the face of new challenges (as Pascale, 1990, puts it, ‘nothing fails like success’).

The HRM approach to resourcing therefore emphasizes that matching

resources to organizational requirements does not simply mean maintaining the status quo and perpetuating a moribund culture. It can and often does mean radical changes in thinking about the skills and behaviours required in the future to achieve sustainable growth and cultural change.

INTEGRATING BUSINESS AND RESOURCING STRATEGIES

The philosophy behind the strategic HRM approach to resourcing is that it is people who implement the strategic plan. As Quinn Mills (1983) has put it, the process is one of ‘planning with people in mind’. The integration of business and resourcing strategies is based on an understanding of the direction in which the organization is going and the determination of: l the numbers of people required to meet business needs; l the skills and behaviour required to support the achievement of business strategies; l the impact of organizational restructuring as a result of rationalization, decentralization, delayering, acquisitions, mergers, product or market Employee resourcing strategy l 155 development, or the introduction of new technology, for example cellular manufacturing; l plans for changing the culture of the organization in such areas as ability to deliver, performance standards, quality, customer service, teamworking and flexibility, which indicate the need for people with different

attitudes, beliefs and personal characteristics. These factors will be strongly influenced by the type of business strategies adopted by the organization and the sort of business it is in. These may be expressed in such terms as the Boston Consulting Group’s classification of businesses as wild cat, star, cash cow or dog, or Miles and Snow’s (1978) typology of defender, prospector and analyser organizations. Resourcing strategies exist to provide the people and skills required to support the business strategy, but they should also contribute to the formulation of that strategy. HR directors have an obligation to point out to their colleagues the human resource opportunities and constraints that will affect the achievement of strategic plans. In mergers or acquisitions, for example, the ability of management within the company to handle the new situation and the quality of management in the new business will be important considerations.

BUNDLING RESOURCING STRATEGIES AND ACTIVITIES

Employee resourcing is not just about recruitment and selection. It is concerned with any means available to meet the needs of the firm for certain skills and behaviours. A strategy to enlarge the skill base may start with recruitment and selection but would also extend into learning and development to enhance skills and modify behaviours, and methods of rewarding people for the acquisition of extra skills. Performance management processes can be used to identify development needs (skill and behavioural) and motivate people to

make the most effective use of their skills. Competence frameworks and profiles can be prepared to define the skills and behaviours required and used in selection, employee development and employee reward processes. The aim should be to develop a reinforcing bundle of strategies along these lines. Talent management is a ‘bundling’ process, which is an aspect of resourcing.

THE COMPONENTS OF EMPLOYEE RESOURCING

STRATEGY

The components of employee resourcing strategy as considered here are:

156 l HR strategies l Human resource planning (often referred to, especially in the public sector, as workforce planning) – assessing future business needs and deciding on the

numbers and types of people required. l Developing the organization’s employee value proposition and its employer brand. l Resourcing plans – preparing plans for finding people from within the organization and/or for learning and development programmes to help

people learn new skills. If needs cannot be satisfied from within the organization, it involves preparing longer-term plans for ensuring that recruitment and selection processes will satisfy them. l Retention strategy – preparing plans for retaining the people the organization needs.

l Flexibility strategy – planning for increased flexibility in the use of human resources to enable the organization to make the best use of people and adapt swiftly to changing circumstances. l Talent management strategy – ensuring that the organization has the talented people it requires to provide for management succession and meet present and future business needs (see Chapter 15).

HUMAN RESOURCE PLANNING

Defined

Human resource or workforce planning determines the human resources required by the organization to achieve its strategic goals. As defined by Bulla and Scott (1994) it is ‘the process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements’. Human resource planning is based on the belief that people are an organization’s most important strategic resource. It is generally concerned with matching resources to business needs in the longer term, although it will sometimes address shorter-term requirements. It addresses human resource needs both in quantitative and in qualitative terms. This means answering two basic questions: 1) how many people? And 2) what sort of people? Human resource planning also looks at broader issues relating to the ways in which people are employed and developed in order to improve organizational effectiveness. It can therefore play an important part in strategic human resource management. Link to business planning Human resource planning should be an integral part of business planning. The strategic planning process defines projected changes in the types of Employee resourcing strategy l 157 activities carried out by the organization and the scale of those activities. It identifies the core competences the organization needs to achieve its goals and therefore its skill and behavioural requirements.

Human resource planning interprets these plans in terms of people requirements. But it may influence the business strategy by drawing attention to ways in which people could be developed and deployed more effectively to further the achievement of business goals as well as focusing on any problems that might have to be resolved in order to ensure that the

people required will be available and will be capable of making the necessary contribution. As Quinn Mills (1983) indicates, human resource planning is ‘a decision-making process that combines three important activities: (1) identifying and acquiring the right number of people with the proper skills, (2) motivating them to achieve high performance, and (3) creating interactive links between business objectives and peopleplanning activities’. Hard and soft human resource planning A distinction can be made between ‘hard’ and ‘soft’ human resource planning. The former is based on quantitative analysis in order to ensure that the right number of the right sort of people are available when needed. The latter, as described by Marchington and Wilkinson (1996), ‘is more explicitly focused on creating and shaping the culture of the organization so that there is a clear integration between corporate goals and employee values, beliefs and behaviours’. But, as they point out, the soft version becomes virtually synonymous with the whole subject of human resource management. Human resource planning is indeed concerned with broader issues about the employment of people than the traditional quantitative approach of ‘manpower planning’. But it also addresses those aspects of human resource management that are primarily about the organization’s requirements for people from the viewpoint of numbers, skills and how they are deployed.

This is the sense in which human resource planning is discussed in this chapter.

Limitations

However, it must be recognized that although the notion of human resource planning is well established in the HRM vocabulary it does not seem to be embedded as a key HR activity. As Rothwell (1995) suggests, ‘Apart from isolated examples, there has been little research evidence of increased use or of its success.’ She explains the gap between theory and practice as arising from: 158 l HR strategies l the impact of change and the difficulty of predicting the future – ‘the need for planning may be in inverse proportion to its feasibility’; l the ‘shifting kaleidoscope’ of policy priorities and strategies within organizations; l the distrust displayed by many managers of theory or planning – they often prefer pragmatic adaptation to conceptualization; l the lack of evidence that human resource planning works. Research conducted by Cowling and Walters (1990) indicated that the only formal and regular activities carried out by respondents were the identification of future training needs, analysis of training costs and analysis of productivity. Less than half produced formal labour supply and demand forecasts, and less than 20 per cent formally monitored HR planning practices. Summarizing the problem, Taylor (1998) comments that ‘It would seem that employers, quite simply, prefer to wait until their view of the future environment clears sufficiently for them to see the whole picture before committing resources in preparation for its arrival. The perception is that the more complex and turbulent the environment, the more important it is to wait and see before acting.’ Be that as it may, it is difficult to reject out of hand the belief that some attempt should be made broadly to determine future human resource

requirements as a basis for strategic planning and action. Approaches to human resource planning Resourcing strategies show the way forward through the analysis of business strategies and demographic trends. They are converted into action plans based on the outcome of the following interrelated planning activities: l Demand forecasting – estimate future needs for people and competences by reference to corporate and functional plans and forecasts of future activity levels. l Supply forecasting – estimate the supply of people by reference to analyses of current resources and future availability, after allowing for wastage.

The forecast will also take account of labour market trends relating to the availability of skills and to demographics. l Forecasting requirements – analyse the demand and supply forecasts to identify future deficits or surpluses, with the help of models where appropriate. l Action planning – prepare plans to deal with forecast deficits through internal promotion, training or external recruitment. If necessary, plan for unavoidable downsizing so as to avoid any compulsory redundancies, if that is possible. Develop retention and flexibility strategies.

Employee resourcing strategy l 159 Although these are described as separate areas they are closely interrelated and often overlap. For example, demand forecasts are estimates of future

requirements, and these may be prepared on the basis of assumptions about the productivity of employees. But the supply forecast will also have to consider productivity trends and how they might affect the supply of people. A flow chart of the process of human resource planning is shown in Figure 14.1.

EMPLOYEE VALUE PROPOSITION

An organization’s employee value proposition consists of what it has to offer prospective or existing employees if they join or remain with the business. It will include remuneration – which is important but can be overemphasized 160 l HR strategies Business plan Demand forecast Supply forecast Forecast of activity levels Forecast of future requirements Analysis of

requirements: numbers, skills and behaviours

Action planing:

• recruitment

• training

• downsizing

• increasing

 flexibility

Figure 14.1 Human resource planning flow chart compared with other elements. These non-financial factors may be crucial in attracting and retaining people and include: l the attractiveness of the organization; l responsibility – corporate conduct and ethics; l respect – diversity and inclusion; l work–life balance; l opportunities for personal and professional growth. The employee value proposition can be expressed as an employer brand, defined by Walker (2007) as ‘a set of attributes and qualities – often intangible – that make an organization distinctive, promise a particular kind of employment experience and appeal to people who will thrive and perform their best in its culture’. Employer branding is the creation of a brand image of the organization for prospective employees. It will be influenced by the

reputation of the organization as a business or provider of services as well as its reputation as an employer. To create an employer brand it is necessary to: l analyse what ideal candidates need and want and take this into account in deciding what should be offered and how it should be offered; l establish how far the core values of the organization support the creation

of an attractive brand and ensure that these are incorporated in the presentation of the brand as long as they are ‘values in use’ (lived by members of the organization) rather than simply espoused; l define the features of the brand on the basis of an examination and review

of each of the areas that affect the perceptions of people about the organization as ‘a great place to work’ – the way people are treated, the provision of a fair deal, opportunities for growth, work–life balance, leadership, the quality of management, involvement with colleagues and how and why the organization is successful; l benchmark the approaches of other organizations (the Sunday Timeslist of the 100 best companies to work for is useful) to obtain ideas about what can be done to enhance the brand; l be honest and realistic.

RESOURCING PLANS

The analysis of future requirements should indicate what steps need to be taken to appoint people from within the organization and what training programmes should be planned. The analysis will also establish how many people will need to be recruited in the absence of qualified employees within the organization or the impossibility of training people in the new skills in time.

Employee resourcing strategy l 161

Internal resourcing

Ideally, internal resourcing should be based on data already available about skills and potential. This should have been provided by regular skills audits and the analysis of the outcomes of performance management reviews. A ‘trawl’ can then be made to locate available talent, which can be accompanied by an internal advertising campaign.

External resourcing

External resourcing requirements can be met by developing a recruitment strategy. The aims of this strategy should be first to make the organization ‘the employer of choice’ in its particular field or for the people it wants to recruit (eg graduates). Second, the strategy should plan the best methods of defining precisely what is needed in terms of skills and competencies.

Finally, the strategy should be concerned with planning the use of the  most effective methods of obtaining the number and type of people required. As indicated by Spellman (1992) the strategy should be developed as follows:

1. Define skill and competency (behavioural) requirements. Ideally this should be carried out by the use of systematic skill and competency analysis techniques. These can form the material upon which focused and structured interviews can take place and be used as criteria for selection. They may also indicate where and how psychometric tests could be helpful.

2. Analyse the factors affecting decisions to join the organization. These include: – the pay and total benefits package: this may have a considerable effect on decisions to join the organization but it is by no means the only factor; those set out below can be just as important, even more significant for some people:

– career opportunities;

– the opportunity to use existing skills or to acquire new skills;

– the opportunity to use the latest technology and equipment, with which the organization is well supplied (of particular interest to research scientists and engineers);

– access to high-level training;

– a responsible and intrinsically rewarding job;

– a belief that what the organization is doing is worthwhile;

– the reputation of the organization as an employer;

– the opportunity the job will provide to further the individual’s career, for example the scope to achieve and have achievements recognized, increase in employability, or a respected company name to put on a CV.

162 l HR strategies

3. Competitive resourcing. This will start from an analysis of the basis upon which the organization competes with other firms for employees. The factors mentioned above should be covered, and the aim is to seek competitive advantage by exploiting those that are superior to those of rivals. One of the factors will be pay. This may not be the only one but it can be important. It is necessary to track market rates and make a policy decision on where the organization wants to be in relation to the market.

4. Alternative strategies for satisfying human resource requirements. These consist of outsourcing, re-engineering, increasing flexibility skills training, multiskilling and downsizing.

5. Recruitment and selection techniques. The strategy should explore methods not only of recruiting the number of people required but also of finding staff who have the necessary skills and experience, who are likely to deliver the desired sort of behaviour and who will fit into the organization’s culture readily. These processes and techniques will include the

use of:

– skills analysis;

– competency mapping;

– the internet for recruitment;

– biodata;

– structured interviews;

– psychometric testing;

– assessment centres.

The aim of the strategy is to develop the best mix of recruitment and selection tools. It has been demonstrated that a ‘bundle’ of selection techniques is likely to be more effective as a method of predicting the likely success of candidates than relying on a single method such as an interview.

RETENTION STRATEGY

Retention strategies aim to ensure that key people stay with the organization and that wasteful and expensive levels of employee turnover are reduced. They will be based on an analysis of why people stay and why they leave. Analysis of reasons for staying or leaving

The reasons why people remain with the organization can be established through attitude surveys. These could segment respondents according to their length of service and analyse the answers of longer-serving employees to establish if there are any common patterns. The survey results could be Employee resourcing strategy l 163 supplemented by focus groups, which would discuss why people stay and identify any problems. An analysis of why people leave through exit interviews may provide some information, but they are unreliable – people rarely give the full reasons why they are going. A better method is to conduct attitude surveys at regular intervals. The retention plan should address each of the areas in which lack of commitment and dissatisfaction can arise. The actions to be considered under each heading are listed below. Pay Problems arise because of uncompetitive, inequitable or unfair pay systems. Possible actions include:

reviewing pay levels on the basis of market surveys;

introducing job evaluation or improving an existing scheme to provide for equitable grading decisions;

ensuring that employees understand the link between performance and reward;

reviewing performance-related pay schemes to ensure that they operate

fairly;

adapting payment-by-results systems to ensure that employees are not penalized when they are engaged only on short runs;

tailoring benefits to individual requirements and preference;

involving employees in developing and operating job evaluation and contingent pay systems.

Job design

Dissatisfaction results if jobs are unrewarding in themselves. Jobs should be designed to maximize skill variety, task significance, autonomy and feedback, and they should provide opportunities for learning and growth.

Performance

Employees can be demotivated if they are unclear about their responsibilities or performance standards, are uninformed about how well they are doing, or feel that their performance assessments are unfair. The following actions can be taken:

express performance requirements in terms of hard but attainable goals;

get employees and managers to agree on those goals and the steps required to achieve them;

encourage managers to praise employees for good performance but also get them to provide regular, informative and easily interpreted feedback performance problems should be discussed as they happen in order that immediate corrective action can be taken;

train managers in performance review techniques such as counselling;

brief employees on how the performance management system works and obtain feedback from them on how it has been applied.

Learning and development

Resignations and turnover can increase if people are not given opportunities for learning and development, or feel that demands are being made upon them that they cannot reasonably be expected to fulfil without proper training. New employees can go through an ‘induction crisis’ if they are not given adequate training when they join the organization. Learning and

development programmes should be developed and introduced that:

give employees the competence and confidence to achieve expected performance standards;

enhance existing skills and competencies;

help people to acquire new skills and competencies so that they can make better use of their abilities, take on greater responsibilities, undertake a greater variety of tasks and earn more under skill- and competency-based pay schemes;

ensure that new employees quickly acquire and learn the basic skills and knowledge needed to make a good start in their jobs;

increase employability, inside and outside the organization.

Career development

Dissatisfaction with career prospects is a major cause of turnover. To a certain extent, this has to be accepted. More and more people recognize that to develop their careers they need to move on, and there is little their employers can do about it, especially in today’s flatter organizations where promotion prospects are more limited. These are the individuals who acquire a ‘portfolio’ of skills and may consciously change direction several times during their careers. To a certain degree, employers should welcome this tendency. The idea of providing ‘cradle to grave’ careers is no longer as relevant in the more changeable job markets of today, and this self-planned, multiskilling process provides for the availability of a greater number of qualified people. But there is still everything to be said in most organizations for maintaining a stable core workforce, and in this situation employers should still plan to provide career opportunities by:

Employee resourcing strategy l 165 providing employees with wider experience;

introducing more systematic procedures for identifying potential, such as assessment or development centres;

encouraging promotion from within;

developing more equitable promotion procedures;

providing advice and guidance on career paths.

Commitment

This can be increased by:

explaining the organization’s mission, values and strategies and encouraging employees to discuss and comment on them;

communicating with employees in a timely and candid way, with the emphasis on face-to-face communications through such means as briefing groups;

constantly seeking and taking into account the views of people at work;

providing opportunities for employees to contribute their ideas on improving work systems;

introducing organization and job changes only after consultation and discussion.

Lack of group cohesion

Employees can feel isolated and unhappy if they are not part of a cohesive team or if they are bedevilled by disruptive power politics. Steps can be taken to tackle this problem through teamwork (setting up self-managing or autonomous work groups or project teams) or team building (emphasizing the importance of teamwork as a key value and rewarding people for working effectively as members of teams and developing teamwork skills). Dissatisfaction and conflict with managers and supervision A common reason for resignations is the feeling that management in general, or individual managers and team leaders in particular, are not providing the leadership they should, are treating people unfairly or are bullying their staff (not an uncommon situation). As the saying goes, people tend to leave their managers, not the organization. This problem should be remedied by:

selecting managers and team leaders with well-developed leadership qualities;

training them in leadership skills and in methods of resolving conflict and dealing with grievances;

introducing better procedures for handling grievances and disciplinary problems, and training everyone in how to use them. Recruitment, selection and promotion Rapid turnover can result simply from poor selection or promotion decisions. It is essential to ensure that selection and promotion procedures match the capacities of individuals to the demands of the work they have to do. Over-marketing Creating unrealistic expectations about career development opportunities, tailored training programmes, increasing employability and varied and interesting work can, if not matched with reality, lead directly to dissatisfaction and early resignation. Care should be taken not to oversell the firm’s employee development policies. This can be achieved by using realistic previews as part of the selection process.

FLEXIBILITY STRATEGY

The aims of the flexibility strategy should be to develop a ‘flexible firm’ (Atkinson, 1984) by providing for greater operational and role flexibility. The steps to be considered when formulating a flexibility strategy are as follows:

Take a radical look at traditional employment patterns to find alternatives to full-time, permanent staff. This may take the form of segregating the workforce into a ‘core group’ and one or more peripheral groups. Think about outsourcing – getting work done by external firms or individuals. Encourage multiskilling to increase the ability of people to switch jobs or carry out any of the tasks that have to be undertaken by their team.