Bosses warm to the idea that people matter

GLOBAL COMPETITION, and the need to introduce massive changes into our businesses, has had one unexpected benefit for employees. Top management is at last becoming aware that the chairman's cliche, "our people are our most valuable asset", ritually intoned at the annual meeting, is actually true.

Introducing Cyborg Systems' White Paper on Human Resources Management, Kevin Delany, a partner with PricewaterhouseCooper's human resource advisory unit, said organisations operating in an increasingly competitive business environment are seeking new ways of achieving sustainable advantage. He said: "Within this context of change ... organisations are focusing on their key assets: their people and how they can best be aligned to achieve business objectives. Senior managers have started to demonstrate their recognition that the critical success factor to achieving business targets is how effectively employees will contribute to the change. As a result, organisations are reviewing the ways in which they recruit, retain, develop, and manage their staff, to ensure that 'people' policies underpin the business needs. The result of this focus is increasingly reflected in the formulation and publication of an human resource strategy, which seeks to ensure that the people elements critical to achieving the business objectives form a robust and credible part of the business plan."

What issues are of most concern to the human resource function? According to Cyborg Systems' survey, today's two major issues in medium-sized and large companies are skill shortages followed closely by the levels of staff turnover. Skill shortages are of most importance in manufacturing and technology, while turnover is the main concern in retail, leisure and financial services. But when asked: "Which skill shortages are causing you most concern?" the shortage of IT skills topped the list. The shortage of management skills worries a third of financial services companies, a quarter of retail and leisure businesses, and a fifth of IT firms. Shortages were most acute in the south of England.

The survey found that firms provide generous perks to try and stop their managers leaving, but few offer help against the escalating levels of stress. Almost half of the personnel managers thought that levels of stress had increased. The majority believe that middle managers are the most affected. It may be noted that almost two-thirds of middle managers in The Quality of Working Life 1998 survey by the Institute of Management, reported that long working hours adversely affect their health.

The Cyborg survey found that only one in three companies offer any treatment for stress. Relaxation courses and counselling are the most common treatments offered. The survey found that one in three companies feel that stress had a direct impact on absenteeism, although only half of these know the cost. The cost for individual firms can be as high as pounds 2m a year. Most medium and large companies offer individual training programmes for employees. However, a quarter of retail and leisure organisations, which have the highest levels of staff turnover, do not. This suggests that an ongoing programme of training and development helps to motivate employees and foster loyalty.

The growth in flexible working has been a factor in changing employment practices. The survey found that part-time and flexible working is offered by almost nine in 10 companies. The IT industry is the biggest user, with all companies offering flexible working to some employees. On the other hand, manufacturing provides rather fewer opportunities for flexible working than other sectors.

Eight in 10 companies say the introduction of the minimum wage will not affect their business, although 14 per cent say it could result in an increase in prices, mainly in manufacturing and retail. Just under half say their business will be unaffected by the Government's New Deal for the unemployed, while more than a third say the effect will be beneficial. Less than one in 10 say it will have a negative effect in pressuring companies to hire the unemployable. The effect of the working time directive is felt to be negligible by almost half the businesses while almost a quarter think it good.

As might he expected from a company developing human resource management systems, the report looks at such systems. It found that under half the employers have systems capable of managing training. The report says: "To manage a business effectively, senior management most take a holistic view, assessing the cost implications of absenteeism, the effectiveness of training and the impact of human resources issues on other areas of the business. However, few companies have systems in place to enable these issues to be tracked and assessed."