HR Analysis

It is that time of year again when a company should conduct a HR analysis to prepare for the coming year. It is always good to review how a company is doing regarding people management whether it is a small company, a medium size organisation or a multinational. An HR analysis give you an indication of what to focus on in the coming year, what needs improvement and what is going really well? A valid reason to do this is your company could be losing money. Image you could be losing money in 2013 and not realising it.  

An HR analysis of your staff could give you insights regarding what are the strengths and weaknesses of your company. For instance what is the absenteeism of staff members in the company? The average absenteeism figure in Ireland is around 3.8% per year, for small firms it is around 3.1% and for medium firms it is 4.9% per year. If your company’s absenteeism figure is above the national average you could be losing money and you need to find out why this is happening and what could be done about it to bring it down to at least the average absenteeism figure. Of course the size of the company, what segment it operates in and where it is based all can influence key HR figures.

Other key HR figures which need to be reviewed are: -

Staff turnover – How many staff members have left the company in the last year, either voluntary of involuntary? If too many people leave the company voluntarily this could lead to extra cost of new hires. A figure of around 5% staff turnover is normal and zero percent of staff turnover might look good but could lead to serious problems in time. A company needs to have some staff turnover to remain healthy.

Recruitment Time – How many days does it take to recruit a new staff member? The recruitment time is from the moment that the decision has been taken to hire a new recruit to the day that the new employee starts. If it takes too long to hire a new staff member this could lead to work not being done or extra overtime which can be a cost.

Overtime – Number of hours overtime used by the company. This could indicate how efficient the company is run; a high rate of overtime could indicate that there are serious inefficiencies which need to be addressed. 

Training Days – The number of training days the company uses on a yearly basis. The nature of the company has an influence on the number of training days needed. For instance an IT company would normally have a greater number of training days. 

Gender Balance – What is the gender balance in the company? How many men and women are working in the company?

Age Build Up – What is the age profile of the employees of the company? A healthy company has a balanced age profile.

Part time - Full time Ratio – How many part timers and how many full time employees are working in the company?

Education Ratio – what is the highest education level of the employees? This can be important if the company needs to be able to further develop or has to tackle serious issues.

Indirect vs. Direct Labour Ratio – How do the number of managers, supervisors and non production staff members compare to the total number of production staff members. Again this can indicate how efficient the organisation is organised.

Performance Ratings – What is the performance rating of the employees? How many employees got a below average rating and how many employees got an excellent rating. Furthermore what did the company do with the below average employees and excellent employees.  

 
The list of key HR figures is not complete and can change from company to company. However the HR analysis will give your company important information on areas on which the company needs to focus on in order to improve their organisation and become more efficient and cost effective, something we all want to achieve.

Human Resources in SME Sector

The SME sector is focussed on survivability and anything that can help a company to continue to exist. Maybe the SME sector has always been focussed primarily on how to survive with few exceptions to this. The question is what can HR do to assist the survival of an SME Company and even beyond survival growth?

There aren’t a fixed number of HR strategies to solve all SME company problems but rather variations of HR practices which should be applied to a company depending on its needs based on the environment it operates in. A diagnose should take place to understand where the company stands and what HR practises could be helpful in tackling the issues at hand. If a good diagnosis and implementation are completed then HR can help to strengthen a SME company’s ability to survive and develop.                                            

The question of HR as a strategic partner in the SME sector is irrelevant as most plans are short term and don’t have long term strategic implications. Good SMEs operate on the basis of entrepreneurship and flexibility and companies will easily change their approach to issues in order to find the right way forward. When dealing with SMEs you will very often see fire fighting without knowing what exactly is causing the problems in the first place. Taking some time to understand what exactly is happening is crucial in order to reach a positive conclusion.

The basis for any HR approach in SMEs is a sound legal footing. There are too many legal requirements for companies to ignore this. Employment legislation, through the EU, has increased dramatically in the last number of years. However the NERA reports make it clear that a lot of companies do not comply with basic legal requirements and this in itself can jeopardise the future of any company. It is foolish to think you can ignore this. 

When assisting SMEs with their survival there are a number of HR practices which can be helpful, such as: -

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Staff Selection – too often staff selection in the SME sector is done unprofessionally and ends up being a stop gap solution to a problem.  Selection criteria is seldom established or adhered to. Furthermore training on how to interview candidates is essential for successfully selecting new excellent employees. Getting the right new employee can save money and getting employees with the right attitude is essential.

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Staff Development – in difficult times staff development is often overlooked. However if you want to do more with less then you need to develop the fewer employees to do more. Even the best employees will not be able to perform new tasks if not properly instructed. For instance employees who need to find better and faster ways to perform tasks need to be instructed on how to do this.

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Employee Engagement – Employee engagement is also important for small companies. It can make a huge difference having the right culture and attractiveness. Small companies even have an advantage over bigger companies as people should find it easier to understand what the company is about and how to relate to it. However in SMEs personalities can make employee engagement difficult.

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Performance Management – SME companies need to have a clear picture of who is helping them to achieve their goals and who isn’t. Staff need clear Key Performance Indicators which will be evaluated. Employees deserve feedback on how they are performing in order to improve their performance. Repeated underperformance needs to be tackled and resolved or else it may take too much time and effort to manage. 

SMEs are focussed on survivability especially in these days. We have to remember that the SME sector is the backbone of any economy. The right flexible HR approach can give the small and medium size companies the support they need in difficult times in order to survive and create employment.

Constructive Feedback

We are getting close to the time when organisations go through their performance reviews. Performance development is based on the assumption that people cannot learn and develop unless they receive feedback on how they are progressing. As people are an expensive resource it makes sense to maximise their output by ensuring that every employee performs at their full potential. In performance reviews giving feedback is one of the most important skills. Either conscious or unconscious feedback is given and it establishes the working relationship between manager and employee. Any employee needs feedback to understand where they stand in the organisation. They need this information to assess their role in the team; department and how they are doing. Without regular feedback employees would drift around not knowing what, how and when to act.

Feedback is required to provide motivation and structure to the employee and let him see what the progress is in their day to day work. Feedback in organisations is positive in the sense that its aim is to point the way to further development and improvement, not simply tell people where they have gone wrong (negative feedback). Feedback must report on successes as well as failures. However, failures are treated as opportunities for learning so that they are less likely to be repeated in the future.

Feedback is always factual. It refers to results, events, critical incidents and significant behaviours which have affected the performance in specific ways.

The Key Actions for Giving Constructive Feedback are: -

Ø  State the constructive purpose of your feedback

Ø  Describe specifically what you have observed

Ø  Give positive as well as corrective feedback

Ø  Describe your reaction

Ø  Give the other person the opportunity to respond – Am I correct?

Ø  Offer specific suggestions

Ø  Do not wait too long with giving your feedback

Ø  Summarise and express your support.

Once feedback is given you might want to react on this by restating the sender's feelings or ideas in your own words, rather than repeating their words. Your words should be saying, "This is what I understand your feelings to be, am I correct?" It not only includes verbal responses, but also nonverbal ones. Nodding your head or squeezing their hand to show agreement, dipping your eyebrows shows you don't quite understand the meaning of their last phrase, or sucking air in deeply and blowing it hard shows that you are also exasperated with the situation.

The rationale for giving performance feedback is that it will help sustain or improve performance. However, some skill is required when giving feedback, since if it is not done correctly it could result in the employee becoming offended, confused or even de-motivated.