Over the next 2 years, Integrated Commercial Inc. aims to grow its revenue and profitability by at least 12%. It hopes to achieve this by expanding into new markets, insourcing core manufacturing components, making strategic acquisitions, and increasing production labor efficiency. However, the core of this strategy lies in revitalizing the company’s human resources, which have faced a myriad of challenges over the past three years. By acquiring a new IT business, Integrated Commercial, Inc. intends to inject 30 highly skilled and talented professionals into its HR pool. In addition, the company intends to consolidate two of its locations that are within a 25-mile radius.
The overall business strategies identified above will be achieved through various HR strategic practices that correspond to each of them. To begin with, it must keep a robust database of its employees and applicant information. The HR department must liaise with the Finance department to allocate funds for updating the old system for secure storage of relevant employee information (Stewart & Brown, 2020). It will also be incumbent upon the HR Director and senior management personnel to carry out site visits regularly. This will be aimed at gaining a clear understanding of what takes place in operations as well as the challenges experienced by employees therein.
Employees will have their job descriptions reviewed afresh in line with their qualifications and duties and responsibilities. Indeed, it is significant to align the employees’ job titles with what they do. In addition, long-term employees whose responsibilities have since changed from the time they were first hired should be given new titles to reflect their new responsibilities. The company should also have a stake in the recruitment of its staff. Although outsourcing recruitment to third parties is an efficient way of reducing costs, Integrated Commercial Inc. should fully get involved when employees handling critical sectors are being hired. This implies that company representatives should take part in the interview processes and assess the employees’ qualifications (Beaven, 2019). This will align with the company’s strategy of having the most skillful and talented employees within its pool of human resources.
Training and development is an important HR strategy that Integrated Commercial Inc. relies on to build the capacity of its workforce. However, the process should be tailored to the needs of the company. Each functional area has its unique training and development needs. Therefore, companies that are outsourced to offer this critical service must carefully develop a curriculum that takes care of this, and not just use generic materials. This HR strategy aligns the organization with its overall business strategy of sharpening employees’ skills and ensuring that they stay up to date with the latest technological trends.
Having a systematic means that can be used to capture the employees’ expertise is another significant HR strategy that should be employed by Integrated Commercial Inc. The company loses significantly if its top-notch employees leave with all their knowledge, skills, experiences, and expertise. The company’s commitment to growing its talent should not only be on paper but actualized on the ground. In addition, while it is impossible to completely prevent employees from leaving an organization, there should an efficient succession planning that involves the human resources department as well. This HR strategy aligns with the overall business strategy of retaining top-performing employees and ensuring continuity whenever they leave.
Integrated Commercial Inc. has a custom of conducting a performance review process each year. Although this is a well-intended HR strategy, it is not aligned with the company’s business strategy. Many employees and managers consider it a burdensome exercise that interrupts them from doing what they were employed to do. In addition, the company lacks standard performance review procedures and templates. Instead, line managers determine the structure and style that they want to use.
Issues and Challenges Directly Tied to the Business and HR Strategy
- Lack of a robust database of employees and applicant data
- No job descriptions for employees
- Overreliance on outsourcing for recruitment even in critical positions
Possible Underlying Causes
- The company still uses an old database system to keep records of its employees. This system provides conflicting information about employees’ details and performances. Unfortunately, the organization does not consider updating the system to be of priority as there are no funds allocated towards it in the current fiscal budget.
- Job terms are not well-defined and are applied differently from one employee to the next. It is difficult to separate a junior employee from his senior colleague without taking into consideration their years of experience. Furthermore, the job titles held by many employees do not mirror what they practice and the compensations they receive. Furthermore, although many employees handle different job responsibilities from the ones they were hired to do, their job titles have remained the same over the years.
- The employee recruitment services are exclusively handled by third parties that are outsourced by Integrated Commercial Inc. There are no representatives of the company who sit on the recruitment committee or during interviews to take part in gauging the competence levels and qualifications of recruits. This implies that the company has no say in the hiring process of new staff irrespective of the critical positions they would be handling.
Specific Actions to Address Each Cause and Action
- Allocate funds towards the installation of new and robust database systems that will effectively track employee and applicant data.
- Clearly define the roles and responsibilities of each employee within the organization. These should be updated when the respective employee moves up or down his or her job scale.
- Take part in the employee hiring process through attending interviews, preparing interview expectations, and reviewing the qualification details, especially for critical positions like security managers.
As the initially suggested actions are underway, it would be prudent to carry out additional actions. In the category of the job description, additional actions would be to create performance goals and compensation evaluations. This would add more value to the roles and responsibilities of employees. Performance goals would guide respective employees towards what is expected of them within a specified period (Gupta, 2020). Compensation evaluations, on the other hand, should be pegged on whether an employee has achieved his or her performance goals within the time specified. Both will help in giving a job description its true meaning. When it comes to employee recruitment, the additional action will be to prepare interview schedules that align with the requirements of each job category. The interview schedule should also be designed in such a way that it communicates the company’s culture.
To measure whether employees are meeting their performance goals, it will be important to use such metrics as graphic rating scales, 360-degree feedback, self-evaluation, management by objectives, and checklists. A graphic rating scale will use sequential numbers like 1 to 10 to rate employees’ performances in different areas. The 360-degree feedback targets the assessment and opinions of the performance of employees from the cycle of individuals that work within Integrated Commercial Inc. Meanwhile, self-evaluation will help establish discrepancies and similarities against a richer understanding of the performance of the same employee.
In management by objectives, both the employees and their line managers will be involved in the joint formulation of objectives and aligning them to the company goals, objectives, and how the performance would be measured and evaluated. On the other hand, compensation evaluation metrics include pay structures, variable compensation, and performance ratings. Pay structures spell out how different roles will be compensated within the organization while variable compensation refers to the amount employees might rake home on top of their base salaries as a result of their excellent performance. All these parameters will be measured after every six months.
When it comes to employee recruitment interviews, the most applicable metrics would be the application completion rate, turnover rate, and offer acceptance rate. Application completion rate will help Integrated Commercial Inc. measure the success of specific job openings and the process of application. When the application process is slow, it could be indicative of an existing issue in the platform or the entire process. This will be measured one week after every job posting. The rate of turnover is a measurement of the rate at which workers leave the company within a specified time (one year).
Beaven, K. (2019). Strategic human resource management: An HR professional’s toolkit. London: Kogan Page.
Gupta, A. D. (2020). Strategic human resource management: Formulating and implementing HR strategies for a competitive advantage. New York, NY: Routledge.
Stewart, G. L., & Brown, K. G. (2020). Human resource management: Linking strategy to practice. Hoboken, NJ: John Wiley & Sons, Inc.