Human capital Featured

7:00pm EDT November 24, 2006

An integrated hiring strategy enables a company to be more nimble, to strike a balance between fixed and variable labor costs, and to drive the greatest value or return on the investment in human capital. Key to developing such a strategy is understanding exactly who your employees are, which are focused on core functions, and which are dedicated to noncore functions.

Matching permanent employers with core functions and temporary employees with noncore functions is the best way to establish work force efficiency.

“Begin with an internal audit to determine whether their activities are core or non-core” says Kristen Denning, an account executive for Spherion Professional Services Group. “While it may sound like a daunting task, it is a fairly simple survey process that can reveal a host of areas where work force structure can be improved and greater flexibility generated.”

Smart Business asked Denning how to develop an integrated hiring strategy with the ultimate goal of maximizing both work force and bottom-line efficiency.

Why define core and noncore functions?

To increase work force stability and flexibility, employers must clearly and thoughtfully define their core and noncore activities. Core activities are mission-critical, while noncore activities just support the mission. For example, in an organization’s sales unit, developing sales strategies, business development activities and contacting and pitching potential clients would usually be considered core functions that must be handled by employed workers who best understand the company mission, culture and business.

On the other hand, administrative personnel engaged in mailing sales materials or updating customer information systems are not completing mission-critical activities, and their work does not require in-depth understanding of the company in order to be successfully completed. These would likely be categorized as noncore in a survey of work force activities.

Once jobs are categorized, how do you organize them to be more efficient?

Each business segment must be evaluated and its activities categorized as core or noncore. The product of this process is a detailed inventory of activities that must be managed by employed talent (core or mission-critical functions) and those that can be managed by supplied staff (noncore or mission-supportive functions). This is the first vital step in laying a foundation for flexibility within your overall work force.

After core and noncore functions are defined, the next step is to evaluate current work force alignment. Are there employed workers dedicated entirely to noncore functions? Should their knowledge of the company and tenure be focused on core objectives? Would dedicating flexible talent to those noncore activities reduce costs and allow you to focus your employed talent on revenue-driving initiatives?

Alternatively, are supplied employees performing core functions? Employers are often shocked to discover they’ve been outsourcing mission-critical activities or, conversely, utilizing full-time employees in noncore, low-ROI roles.

Does the work force structure have to be flexible?

Once mission-critical and mission-supportive activities have been identified, organizations can focus on realigning their work force — ensuring that employed talent is assigned to mission-critical functions and working with an outside expert for supplied mission-supportive talent.

The benefits of this strategy can be tangible and track directly to the bottom line. From outsourcing and flexible staffing to contingent and contract hiring, you are now able to reconfigure noncore employment structures for greater adaptability. Often, companies only plan for the big economic cycles — such as recessions — when today’s marketplace is characterized by small, frequent cycle changes unique to individual companies. In fact, businesses today must be able to react at different speeds and intensity depending on their unique situations.

Not only can a flexible work force structure yield reductions in employment costs, it can also insulate your work force from the minor adjustments that might be required in response to small, internal changes, as well as from the impact of larger shifts in economic cycles.

Companies that increase their contract work force will enjoy greater leverage during difficult times. If cost-cutting becomes necessary due to an industry slowdown or unexpected devastating event, adjustments can be made to the flexible work force rather than dismantling your core work force and losing valuable intellectual capital to a temporary situation. With the right balance of employed and supplied talent in place, employers will be able to respond fluidly and effectively to both adversity and opportunity.

KRISTEN DENNING is an account executive for Spherion Professional Services Group. Reach her at (813) 864-1111 or kristendenning@spherion.com.