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HR - make no mistake about it
Human Resources is the latest in a series of terms used to describe the management of the people or employee component of your business. Depending on how long you have been in the workplace, you may have referred to this as personnel, industrial relations, employee relations or human relations. No matter what you call it, the management of people has always been important to your business, and will become even more so in the future.

It is likely that when you examine your budget for the year the largest expense item will be people related: wage and salary costs, benefit costs, employment taxes and compliance costs. Add them all up and the total will surely catch your eye.

Why is it then that in the evolution of most companies the disciplined management of people is one of the last skill sets to be formally addressed? We all know how important it is to attract, develop and retain high quality, high performing employees yet we quickly devote expensive resources to technology, the physical plant and equipment while human resource investment is an avoided cost or the last thing to be addressed. Why?

I think the answer is simple. Most of you reading this are highly qualified and experienced business managers. You know what your strengths are as business and as an individual and know how to capitalize on them. You know for instance that you need a qualified accountant to do your accounting work correctly. You know that when you are negotiating a contract that you probably need a lawyer to review it before signing. You know that if you are designing a complex technical solution or a new product that you need a qualified engineer involved. But everyone just knows how to manage people. Right? Wrong!

Your managers and supervisors are no more intuitively prepared to manage people in the 21st century than they are to do any of the other tasks described above. They can however be given the tools and resources they need to become prepared and to confidently manage your most expensive investment.

Along with its change in name, the HR profession has evolved to become a valuable resource to operating managers. HR today treats your investment in people as just that: an investment. Placing the appropriate structure around your Human Resources does not create unnecessary bureaucracy. It creates a set of process, metrics and expectations that allow managers to deal with this vital resource with the same kind of precision and care that they do with the non-human resources they manage.

You may think that all of our HR work is transactional (benefits, payroll, etc.). Those are only the activities necessary to satisfy the most basic requirements of having employees.

Think about it. There is much more to managing employees than the transactional requirements: You hire people. Every step of the hiring process, from defining the qualifications of a position, to attracting candidates for an opening, to selecting a final candidate and making an employment offer can be done haphazardly or by a set of professional standards that are clear and measurable. One way or another, you create openings, generate candidates and make selections. Make no mistake about it.

You work with and develop your employees. You set expectations of your employees, communicate those expectations and report to them on how they are doing. You train them in the exact duties you have hired them to perform. You decide what to pay them and how to create incentives to better performance. You may do these things in a relatively formal and predictable way or you may do them “on the back of envelope”, but one way or another, you do them. Make no mistake about it.

You work hard at keeping your best employees. You pay them at a rate that retains them. You communicate with them about the benefits you provide relative to your competition. You give them opportunities to prepare for long term financial security. You set standards for behavior and performance in the work place that makes it a desirable place to work. You make sure that under performance is dealt with, ultimately causing termination. You do all these things if you have employees. Make no mistake about it.

You will notice in all of the above I have made no mention of the legal issues and regulations you are bound by as an employer. Too often Human Resource management is forced upon employers in the name of legal compliance. Compliance is important, necessary and good reason in its own right to practice good HR management but it is far from the only reason. Equally important is the simple fact that practicing good HR management will make your operation more efficient and effective. It will cause you to better the competition in the critical area of attracting, developing and retaining high quality employees. As the availability dwindles in the work force your company’s ability to do these things well will become even more important.

HR management is important. You should treat it with the same focus that you do the other assets you manage. These skills don’t necessarily come built in to your management team but they can be taught. With the appropriate tools you can be light years ahead of your competition. Make no mistake about it!