pyramid: this is usually done very poorly.
To be efficient, a firm needs a lean staffing pyramid. There are two ways to disaster. First, the top of the pyramid should be narrow, not wide: you do not want too many overpaid chiefs. Second, you want to avoid being bloated in the middle with too many staffers and middle managers. Both problems lead to excess cost and to politics, infighting, and indecision among all the managers and staffers. This happens because large organizations find it hard to fire senior people (think of the Civil Service): no one likes firing their friends and colleagues who they may have known for 20 years. And senior people, like consultants, are very good at showing that they are indispensable. So it is easier to fire one of the young and cheap receptionists, which does little to address the underlying problem.
To control the cost of production, you have to manage the staffing pyramid. In a healthy firm, that means shipping out expensive people at the top of the organization on a regular basis, and making room for less expensive junior people to take over. This has the virtue of opening the way for more promotions and leads to greater clarity and accountability at senior levels.
The irony of this is that HR are both the solution and the problem. HR are part of the solution because they can help you manage the staffing pyramid. They are also part of the problem because they are one of the many staff functions who are very good at justifying their existence and expanding their empire.
HR strategy and the quality of production
In staffing terms, quality of production refers only to the quality of the core input: people. You can do three things to manage this sort of quality:
• Recruit the right people
• Develop your people well
• Put them in the right positions
Recruit the right people
It pays to hire the right people. In one 18-month period I managed to fill the financial controller’s role first with an idiot, then with someone who got caught trying to defraud us before I finally hired someone who turned out to be a drug dealer and armed robber on the side. It was expensive amusement. And thecost of staff turnover is high: each time a post has to be filled, assume that it will cost you 50% to 100% of annual salary to fill that position once you have allowed for head hunters, advertising and interviewing expenses, costs of laying off the hiring error, and then the cost of finding a temporary replacement.
Every HR group has its own theory about the right recruitment methods. In France, the use of graphology is widespread. In Anglo-Saxon countries, aptitude tests and psychographic profiling are common.
Live with the current orthodoxy: you probably have better things to do than to argue with HR professionals about recruitment theory. Instead, look at why people get hired and why they get fired. Broadly speaking people get hired for three reasons, in order:
• Proven technical skills
• Proven track record
• Other: fit, psychographic profile, attitude, hunger for the job, age, and sex (although do not admit that, ever)
Now look at why most people get fired:
• People skills, or lack of them
• Values
• Other: gross incompetence (rare), disloyalty to the boss, being an armed robber on the side
In other words, your recruitment process will probably do a decent job of finding out if your hire has reasonable technical skills and track record: most recruiters like to recruit someone who has done the job before.
Where you need to focus your efforts is in two areas:
• Does this person have good interpersonal skills?
• Will this person fit with the values we have?
you can train people in the right skills, but not into the right attitude
Try using the method which the shoe repair chain Timpson used for recruiting people to work in its shoe repair shops. Employees usually worked with little supervision and even less pay. And yet they dealt with customers all day. Timpson quickly
To be efficient, a firm needs a lean staffing pyramid. There are two ways to disaster. First, the top of the pyramid should be narrow, not wide: you do not want too many overpaid chiefs. Second, you want to avoid being bloated in the middle with too many staffers and middle managers. Both problems lead to excess cost and to politics, infighting, and indecision among all the managers and staffers. This happens because large organizations find it hard to fire senior people (think of the Civil Service): no one likes firing their friends and colleagues who they may have known for 20 years. And senior people, like consultants, are very good at showing that they are indispensable. So it is easier to fire one of the young and cheap receptionists, which does little to address the underlying problem.
To control the cost of production, you have to manage the staffing pyramid. In a healthy firm, that means shipping out expensive people at the top of the organization on a regular basis, and making room for less expensive junior people to take over. This has the virtue of opening the way for more promotions and leads to greater clarity and accountability at senior levels.
The irony of this is that HR are both the solution and the problem. HR are part of the solution because they can help you manage the staffing pyramid. They are also part of the problem because they are one of the many staff functions who are very good at justifying their existence and expanding their empire.
HR strategy and the quality of production
In staffing terms, quality of production refers only to the quality of the core input: people. You can do three things to manage this sort of quality:
• Recruit the right people
• Develop your people well
• Put them in the right positions
Recruit the right people
It pays to hire the right people. In one 18-month period I managed to fill the financial controller’s role first with an idiot, then with someone who got caught trying to defraud us before I finally hired someone who turned out to be a drug dealer and armed robber on the side. It was expensive amusement. And thecost of staff turnover is high: each time a post has to be filled, assume that it will cost you 50% to 100% of annual salary to fill that position once you have allowed for head hunters, advertising and interviewing expenses, costs of laying off the hiring error, and then the cost of finding a temporary replacement.
Every HR group has its own theory about the right recruitment methods. In France, the use of graphology is widespread. In Anglo-Saxon countries, aptitude tests and psychographic profiling are common.
Live with the current orthodoxy: you probably have better things to do than to argue with HR professionals about recruitment theory. Instead, look at why people get hired and why they get fired. Broadly speaking people get hired for three reasons, in order:
• Proven technical skills
• Proven track record
• Other: fit, psychographic profile, attitude, hunger for the job, age, and sex (although do not admit that, ever)
Now look at why most people get fired:
• People skills, or lack of them
• Values
• Other: gross incompetence (rare), disloyalty to the boss, being an armed robber on the side
In other words, your recruitment process will probably do a decent job of finding out if your hire has reasonable technical skills and track record: most recruiters like to recruit someone who has done the job before.
Where you need to focus your efforts is in two areas:
• Does this person have good interpersonal skills?
• Will this person fit with the values we have?
you can train people in the right skills, but not into the right attitude
Try using the method which the shoe repair chain Timpson used for recruiting people to work in its shoe repair shops. Employees usually worked with little supervision and even less pay. And yet they dealt with customers all day. Timpson quickly
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