Linda Chingosho

Read Part 1 of Strategic Human Resource Planning here

IT Systems

In selecting and maintaining the ideal personnel for the organization, it is wise for the HR management to consider deciding on which IT systems that will, according to a set criteria, select the best matching applicants who will spearhead the development of the company’s competitive advantage.

Turnover Rate

This may also assist the company in determining the potential employee turnover rate each year. Even though companies need to aim at avoiding high turnover rates for the sake of their reputation and skill loss, turnover each year is inevitable due to retirement, structural adjustment issues, maternity issues, just to name a few.

However, for management to appreciate the value of low employee turnover rates, and thus plan strategies to prevent this, they need to thoroughly understand the HR process, and how it contributes to the development of the organization. The 5-P model may be used to understand the operations of the organization, and how to improve the human resource function. In so doing, HRM can become more efficient in formulating strategies that will recruit the best employees to tailor-fit the organization’s purpose.

When considering employee turnover rates, management must find out why skilled personnel constantly leave the company, what is causing employees to lose motivation and interest in their jobs, who is likely to retire or take maternity leave in the coming year, what is the cost: benefit of developing and cross training employees as opposed to hiring over qualified and experienced new hires. Formulating answers to such questions will assist in developing the ideal strategy and policies that will minimize mistakes and reduce high employee turnover rates.

Reward

Employees need to be compensated for what they are worth in order to discourage them from leaving the organization voluntarily. However, due to the fact that employees are not likely to produce 100% productivity rates, it is strongly suggested that compensations that are generally lower than an employee’s potential input to balance out the deficit in productivity levels. This knowledge will ensure that, during the planning phase, management considers the balance that needs to be struck between relevant employee hires and the stipulated budget applied to payroll.

To justify the consideration of lower salaries and benefits, HRM needs to plan in advance how the organization intends on motivating the employee to avoid low morale and to keep optimum operational levels despite the fact that the workers may never actually produce 100% productivity. Such considerations will enable HR to plan the structure of hiring tools, best assess the personalities and aptitudes of the new hire, and determine whether they will fit in with the culture of the HR process and organization.

References

Bowen, D. E., Ledford Jr., J. E., & Nathan, B. R. (1991). Hiring for the organization, not the job.

Academy of Management Executive, 5(4). Retrieved from Business Source Complete.

Kleiman, L., S. (2011). Human resources information systems. Encyclopedia of Business. 2^nd. ed. Retrieved from http://www.referenceforbusiness.com/encyclopedia/Gov-Inc/Human-

Resource-Information-System-HRIS.html

Kleiman, L., S. (2011). Human resources planning. Encyclopedia of Business. 2^nd. ed. Retrieved from http://www.referenceforbusiness.com/encyclopedia/Gov-Inc/Human-Resource-Management-HRM.html

McClure Franklin, G., Rainsford, P., & Thomas, E. (2004) Human resource planning and policy

development: Strategies for Small Businesses. Retrieved from http:// sbaer.uca.edu/research/asbe/2004-fall/08.pdf

Guest : Linda Chingosho

This article was written by Linda Chingosho, an Independent Business and Management Consultant based in Pretoria, South Africa. Linda is an MBA (Project Management) final year student with Walden University (Online) and also possesses an HND in Computer Studies (Management of Information Systems). She has lived and worked in 3 continents, successfully applying her management, scholarly, and training skills to promote various industries and individuals across the globe.

Linda can be contacted on 0843217443, or by email to linchin6791@yahoo.com.

Travel Perk for HR?

There are HR professionals and then are HR professionals on the move. The latter are usually working out of the company HQ in Johannesburg, but you are unlikely to find them at their desk. They have a hidden “travel perk”. As part of their ever expanding job description, these HR professionals are regularly on the move. They must travel to regional offices. You will meet them on flights to Cape Town, Durban, Bloemfontein and Nelspruit. While they try to schedule their flights during “normal” working hours, their day is a lot longer. They are up at 3am, boarding the flight at 6am and brewing their coffee by 8am. The locals are crawling into the office at this time.

During these visits, the movers are supposed to “move’ the locals to adopt the latest HQ driven programmes. They consult, connect and train line managers and staff. The HR professional is supposed to assure the regional office; that those in the ivory castles, are in touch with their reality on the ground. If they do their job properly, they quickly build a fan base, across provinces and cities. Eventually it doesn’t matter whether their work is valued in HQ. As long as the regional offices have given them a “thumbs up”, they hold the power cards. (Very useful in the event that the HR professional is dismissed and needs to substantiate their performance)

In the war for talent, these HR professionals on the move can provide your organisation with a hidden travel advantage. Due to their frequent flyer status, they can quickly identify and target talented individuals on their local travel.

Travel Stop

A recent example comes to mind – to fly out of OR Tambo International Airport (Domestic Departures), you are likely to make several travel stops. On the way to the airport during peak times, you will stop several times in the snail paced traffic. More stops in the parking lot. While you could use the self-service stations and bag drops, you will definitely have to stop at the security terminals. Well I want you to make a special travel stop after you have collected your baggage. Talent is standing in front of you.

Every day, passengers passing through these terminals stop and ask the travel information desk, for directions. While locals should be familiar with the domestic terminal, tourists struggle to understand the signage and facilities. They are rushing to the boarding gates. They don’t know how to access Wi-Fi. They are looking for the business lounges or toilets.

Travel Desk

After they collect their baggage, they are likely to stop at the Sunglass Hut kiosk. Their kiosk stand is in the direct line of vision for the confused tourist. While the kiosk is well stocked with sunglasses, few tourists are buying. But they stop to ask them for directions. Having observed this interaction on numerous occasions, eventually I managed to chat with Vusi (not his real name!), in between him running the “travel” kiosk, dealing with the odd customer and another tourist.

It turned out that that Vusi spends a great deal of time, helping tourists find their way around the airport. It is not part of his job description. He does not ask or get a travel tip. Vusi could easily refer tourists back to the information desk. Or ignore them. Or worse, place a “We are not the travel  information desk” sign. Or pleased his employer, by trying to sell them a pair of designer sunglasses.

But Vusi consistently goes out of his way to help them. He provides concise responses and makes their domestic departure, that much smoother. I suspect that it is the location plus his warm disposition that attracts tourists day after day.

According to the Sunglass Hut website, “…people want their sunglasses to celebrate their individuality. Sunglasses help you feel cool and confident in your style; they say something about you and are a way of expressing your personality.”

Vusi doesn’t wear sunglasses. But I doubt that needs them. He is already celebrating his individuality through the unpaid work that he does, and creating more goodwill for Sunglass Hut, than they realise.

The seat belt lights have been switched on. My flight from Cape to Johannesburg is landing. Better go, there may be talent standing on the other side. Travel safe!

(HR Future, March 2011)

Public Holidays

Let me get off the ground with a sensitive topic: public holidays. As we prepare for the long weekends ahead, it is worthwhile to consider the impact of public holidays on your talent and performance.

Rewind: in the second week of December 2011, government, acting in accordance with the Public Holidays Act, 1994, declared that 27th December was a public holiday. (You didn’t know that the Public Holidays Act existed?). Employers that had not planned for another public holiday, were left scrambling to reschedule their year-end operations. And the additional overtime bill. According to accounting firm, BDO, the estimated loss of turnover in respect of this day, was R 7 billion.

Public Holidays – April

Excluding the festive shutdown in December, for many organisations, April is another month that is best written off. Their talent vanishes; some perform a disappearing act that would make Houdini blush. Others have mentally departed from the building. Depending on the nature of the business, the gap between budgeted and actual numbers widen and deadlines have to be revised (again).

Globally Generous - Public Holidays

Are we taking too much time off? To place our public holidays in the global context, I looked at the latest Worldwide Benefit and Employment Guidelines by Mercer. The number of public holidays in other parts of the world varies from Mexico (7), UK (8) and Brazil & China (11) to Russia (12), India (16) and Columbia (18). When I checked earlier this year, South Africans are officially entitled to 14 days away from the office. We are comfortably sitting in the generous category of the global table.

Public Holidays & Performance

While public holidays provide an opportunity for talent to unwind and return to their job with bubbling energy, it does not necessarily work this way. The real challenge is not with the public holiday, but the losses incurred in the week before and after it. A week or even two, before the long weekend, we mentally slow down. Others shut down completely, so you can forget about getting any productive work from them. The reality is that many talented individuals are occupying the wrong jobs, in the wrong organisation, surrounded by the wrong people. They look forward to the holidays, as temporay, paid relief from their working lives. After we drag ourselves back to the office, the journey to “normal work”, is rather slow.

Managing the impact of Public Holidays

In the short term, it is unlikely that employers can change the number of public holidays. Given the record wage settlements in recent years and falling productivity, employers assisted by HR, should proactively manage the impact on their business.

My first suggestion is to plan projects so that talent are stretched until they leave the office. Instead of pushing deliverables to the other side of the holidays, motivate staff to raise their performance bar. There is great satisfaction in completing an engagement so that you don’t have to worry about it during your public holidays.

Secondly, revisit applications for additional leave. Those employees that take additional leave for extra-long weekends, don’t really help those that are coming to the office. Just spend a Monday morning in the office, when the rest of your department are returning on Tuesday. You are unlikely to perform at your peak. You should have stayed under the duvet. Rather close the department for that day.

Finally, provide opportunities for talent to use their down time for the benefit of the organisation. In the corporate rat race, we often lose time for thinking and reflection. Get your staff to think about the critical problems in the business and their team. They don’t have to undertake any work, just wear their thinking hats over their public holidays. When they return after the break, go through the inputs and use it to engage them further.

I penned this column during my holiday.

(HR Future, April 2011)

Talent

1.Generation Y

Employers were talking about Generation Y five years ago. They will still be talking about them five years from now. What will your organisation be saying? Stop trying to get Generation Y to do what you want. Start trying to do what they want.

2. Celebrate!

Small wins, quick wins, any win. Often

3.Social Media

Don’t ignore the big four: Google, Facebook, Linkedin and Twitter. If you are not already using social media to attract and engage talent, you are missing out the opportunities to achieve your objectives at a fraction of traditional costs.

Reward

4. Total cost packages

Total Cost packages (cost to company packages, guaranteed packages et al) have been around since 1990′s. Should you adopt, retain or dump it? Review the remuneration structure and get up to speed on the developments in this area.

5.Incompetence

Don’t reward incompetence. No excuses. Or you’ll keep getting more of the same results.

6.Wellness

The adage that “prevention is better than cure” hasn’t changed. Invest in wellness programmes and initiatives. Dig deeper if your organisation is the reason “why”; healthy employees that joined six months ago; are suddenly having physical and emotional break downs.

(HR Future, January 2012)

Budget 2012

Depending on your industry and job, December and January are the best or worst months of the year. You were either stressed out, delivering on demand; or you slowly drifted, waiting for the work to flow in your direction. As we roll into February, the “official” working year gets underway and not far behind, is the Budget speech.

Budget Favourities

Once again, HR can look forward to the old Budget favourites faithfully returning to the stage: job creation (we need lots more), skills development (we needed this yesterday), education (quality), crime (is it really going down?) and taxation (especially, your hard earned income). And to inspire confidence, the Budget shouldn’t contain nasty tax shocks

Budget & Tax

In 2012, it is unlikely that you can engage in any financially rewarding endeavour, without finding a tax tag attached (tax on income, expenditure, death, transfer and other triggers). With each passing fiscal year, the tax breaks, swing further from employment to entrepreneurship and from the wealthy to the destitute. Entrepreneurs are entitled to claim a wider range of business expenditure incurred in the production of their income versus employees that are severely limited in this regard.

Past Budgets & Salaried Employees

The death-knell for the salaried employee came in the 2004 tax year in the form of Section 23(m) to the Income Tax Act. The tax deductions for salaried employees are limited to retirement fund contributions, wear and tear, home office expenses, refunds to the employer and odd items. I don’t expect this position to change. Rather, in the context of the economic yo-yo, we should be grateful for any tax relief that comes our way. Even if the tax relief is nothing more than inflationary adjustments; and quickly absorbed by new taxes and increased levies.

Budget & Travel

The budget-fiscal obsession with company cars, pool cars, travel allowances and travel reimbursement is likely to continue in the short term. While many employers have cleaned up their travel perks, they should still pay attention to the qualifying criteria and the quantum. Desk bound employees don’t qualify for a travel allowance, but in the event of the occasional business trip, access to a pool car or travel reimbursement is acceptable. Historically, one of the “big company benefits”, the use of a company car has been driven off the road due to onerous taxation and operational costs. If you are worried about the Gauteng toll fees and fuel prices, don’t count on the Budget to have a change of heart about travel from home to the place of work. Even though it should be regarded as business travel, it is “deemed” to be private travel.

Budget & National Health Insurance

Flowing from the consultations in the past year and the concerns about the implementation of national health insurance (NHI), various stakeholders will be looking to the Budget for certainty and direction. The journey to NHI is currently filled with sick beds that require the healing hand of HR - loss of talented healthcare professionals, lack of nursing colleges, outstanding remuneration issues and unfavourable working conditions.

Budget & PAYE Audits

Given the fiscal squeeze, SARS will continue to carefully monitor their large business centre clients. If you are part of this exclusive group of large employers, you should be prepared for an employee employees’ tax audit. The latest SARS questionnaire covers share schemes, travel allowances, fringe benefits and third party payments. Don’t forget about the enthusiastic SARS employee that will follow up afterwards. I suggest that you get your remuneration structure, employment documentation and policies in order. The blind spot is making sure that your employees understand these matters. (Raise your hands, if you still don’t know how total cost packages work in your company). On the other side, hold HR and payroll accountable for tax compliance. The bill for under deduction of employees’ tax, penalties and interest can easily soar into seven digits, yet it is convenient to sweep accountability under the executive carpet. I have seen individuals walking away unscathed with “exceeds expectations” performance ratings and promotions.

Until next month, get into the flow of hard work, understanding your remuneration and paying the tax bills ahead.

(HR Future, February 2012)

Don’t miss the Budget speech

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Budget Fever

Budget fever is here again.

One day when I have time on my side, I want to delve into the stories behind budgets. I will dig up the conflicts over setting budgets and delivering budget results. Is it only about the numbers or the budget games behind the numbers? I will analyse why some HR professionals blow their budgets 6 months into the year without much to show, while others perform better, way below budget.

Budget 2011/2012

When the Minister of Finance, Pravin Gordan presented the “mini budget” (Medium Term Budget Policy Statement) in October, many HR professionals were too busy extinguishing the flames inside their companies, to scrutinise government’s priorities until 2013. 

To summarise the long winded budget statement, national treasury kept fiscal policies constant, revised their three year GDP growth forecasts higher and allowed for additional borrowings by parastatals. Too many billions in debt, enough to scare any South African. Not good to miss the budget.

Budget Wishlist

This month, we can expect more of the same in the Budget speech, perhaps with the odd surprise lurking in the budget documentation.  (Budget note : middle and higher income earners should not hold their breath for tax relief)

So we will once again hear about the legacy of apartheid, never mind that it is 17 years later and sounds like a broken record. We will be reminded about the impressive achievements, from the number of houses to fans at the World Cup. However, many achievements are at the bottom of Maslow’s hierarchy of needs and we are in no hurry to climb up. Then we will learn about how well SA has weathered the economic storm.

Finally, the Budget Speech will discuss the long, long road ahead. The same goals are carried forward to another year: create millions of jobs, provide quality education from grade R to graduation, grant access to health care, expedite service delivery, invest in rural development and clamp down on crime.  I’m not convinced. In the absence of radical changes, these goals are unlikely to be achieved in the next decade. We need a concerted effort from government and business to manage the troublesome twins of employment and education.

Budget & Employment

If you study the long term employment figures of many companies, they are likely to be employing fewer people today than 2001 and are planning to hire even fewer by 2021. During buoyant times, we experienced jobless growth and when the economy dipped, employers rush to retrench staff (over 1 million to date)

What will it take to increase employment levels in your company?  Here are 3 suggestions for the Budget to sway your decision:

Budget 1: Easy to Hire & Fire

I was chatting with a wealthy business man that immigrated from SA to Sweden. He mentioned that he would never employ staff again. In his opinion, the cost of hiring and firing staff in SA, from the red tape to the onerous regulations overshadowed the benefits of doing business here.  We often underestimate the non-employment wage costs of various pieces of legislation (compensation, labour, employment equity and skills development). These days, he contracts skilled professionals online, from India to China and upon delivery of results, settles through Paypal.  He has used this flexible model for virtual assistants, IT developers and accountants.

To encouragement employment, the budget should open the door - make it easy for employers to hire and fire staff. Instead of hundred check boxes, provide a user friendly system that quickly safeguards the rights of employers and staff. And reduce non-employment wage costs. Or stated differently, it should be as easy as SARS E-Filing and using Facebook.

Budget 2: Tax Free Holidays

Will the Budget go beyond the traditional carrots for learnerships and skills development levies.  We have millions of unemployed workers and massive tax incentives are required. I suggest a tax free holiday for those employers that increase employment levels by 50% within 5 years. The fiscal coffers will drop in the short term, but think about the higher tax collections from more people joining the employment line, instead of the unemployment one. 

Budget 3: Pact

Employers have to walk a tight rope between the above inflation wage demands of trade unions and employing more staff. We can’t have real remuneration increases outstripping labour productivity and expect job creation. If employers are worried about strike action year after year and higher employment costs, they will be cautious about increasing headcount. Government, trade unions and business should enter into a long term pact; for higher employment levels and lower employment costs.

Will the Budget deliver?  

(HR Future, February 2011)

Retirement

Retiring Retirement

This year, I will be delivering a paper on Retiring Retirement – challenging participants to rethink the concept of retirement in the 21^st century. There are four drivers that warrant a significant shift in the way we look at retirement:

1. Rapidly Changing World of Work & Retirement

As the world of work continues to change at break taking speeds, the relationship between the work we do, the rewards we get and the role of retirement will require greater consideration.

2. War for Talent

Notwithstanding the short term wobbles, the war for talent is here to stay. Employers are rethinking their employment value proposition and one of the puzzle pieces to attract and retain talent will be retirement – funds, contributions/benefits, management, taxation and returns.

3. Multigenerational workforce & the value of Retirement

Excluding baby boomers that are marking the days off their calendar until retirement, the value (or should that be NO value) of retirement to Generation X & Y is frequently overlooked.

4. Role of retirement fund contributions in guaranteed pay & remuneration structures

This could easily be a separate workshop. The days when the remuneration structure (traditional or total cost package) could comfortably use retirement funding components to achieve financial and tax objectives is long gone. But what has replaced it?

If you are attending this premier conference, drop by and let us chat about retirement in your organisation.