How to Changes on the Horizon

Human resources has quickly become one of a business’s most valued and important departments. A company is only as good as its people, and HR departments are responsible for bringing in and retaining that talent.

As with nearly every job function, the HR field has changed dramatically in the last decade, primarily due to technology. Business News Daily spoke with HR and hiring experts about the evolution and future of human resources, and how those changes will impact the workplace.

1. HR processes will become automated and cloud-based
In the last decade, marketing and communications technology underwent a cloud transformation. Now, HR technology is catching up, and functions like recruiting, hiring, onboarding and training are happening completely in the cloud.
“According to KPMG’s 2016 Global HR Transformation Survey, 42 percent of organizations plan to replace existing on-premises HR systems with cloud-based ones,” said Don Charlton, founder and chief product officer of recruiting software Jazz. “HR’s move to the cloud has created new opportunities to develop innovative tools to eliminate redundant tasks.”

“We’re seeing more of our clients utilizing cloud technology and social media to automate the onboarding process and engage employees very early, and often, as they come into the organization,” added Michael Pires, CEO and president of JetPay, a provider of HR and payroll services. “Believe it or not, employee retention begins before a new employee shows up for the first day of work.”

Charlton noted that new automated HR tools can provide round-the-clock responses to candidate inquiries, collect data for intuitive candidate profiles, and give users easy access to platforms that keep the hiring team connected throughout the hiring process. [See Related Story: Hiring in the Digital Age: What’s Next for Recruiting?]

Kara Silverman, director at Small Girls PR, agreed that automation is the way of the future for HR processes because it gives employees, particularly tech-savvy millennials, the opportunity to manage their benefits online, any time and from anywhere.

“So many startups like Justworks, Namely, etc. are appearing on the scene to help make providing great HR service easier, even if you’re not a huge company,” Silverman told Business News Daily.

2. User experience will become a top priority
Consumer technology today tends to focus on “delighting” the user, and people have come to expect this smooth, streamlined interaction with all the tech tools they use, said Leela Srinivasan, CMO of applicant-tracking software Lever. There is a wide gulf between how traditional, legacy HR technology operates, and the experience that users actually want, and people are fed up, she said.

“The latest HR technology takes account of this important shift in user expectations,” Srinivasan said. “It factors in design thinking to understand what users are trying to accomplish and why. It also recognizes that sometimes less is more, and it reduces clutter with a view to streamlining processes.”

Jason Leverant, president and COO of executive recruiting firm AtWork Group, added that today’s digital natives want technology built into their daily work lives.

“They are looking for … things like proprietary apps, electronic logins, etc.,” he said. “They want to be engaged in this sense, which helps with retention.”

3. Recruiting will remain personalized and candidate-centric
Recruiting has become more personal, Charlton said, and therefore, the interviewing process must be more strategic.

“What benefits are you offering that differentiate your company from your competitor?” he said.

“Technology makes it easy to stay in touch quickly, but you have to remember to personalize [the experience] to build relationships with candidates,” Silverman said.

Srinivasan noted that modern companies recognize the power of making recruiting a strategic competitive advantage, rather than writing it off as an administrative process.

“They are willing to invest in tools that give them an edge, and their teams embrace a role that goes way beyond order-taking,” she said.

4. HR will continue to evolve into “human capital management”
Over the last several years, the field of HR has become less about following rote management and record-keeping processes, and more about the strategic execution of human capital management (HCM), Pires said. This evolution is continuing today, and will shape the culture and operations of tomorrow’s businesses.

“The first wave of this transition was driven by the need to better organize, track and report employee information,” Pires said. “The next wave is a meaningful shift toward leveraging various technology solutions, information and data to make better, more strategic decisions about talent, organizational readiness, succession planning and culture to help drive better business performance and results.”

Leverant noted that employee engagement via HR technology will continue to be top of mind for employers, especially when it comes to engaging millennials.

“Millennials have a different work ethic, needs, wants, etc., and companies are adapting to the largest segment of the workforce,” he said.

Charlton agreed, adding that it’s critical for employers to keep pace with the overall workforce trends that emerge.

“To ensure you’re hiring the best up-and-coming talent among this generation, each HR function – from sourcing and recruiting to hiring and training – should be tailored to the preferences, traits and habits of candidates,” he said. “From how you evaluate prospective candidates to how you interact with them to how you train and sustain them, it should all be evolving to meet the expectations of the modern workforce.”

How to Find Out Your Business

unduhan-16For some small business owners, the long-term plan is to build their company up and sell it when the value is at its highest. But according to market research from IBIS World, only two percent of businesses in the U.S. value themselves annually. Banking on a final payday when you’re ready to sell is no safe strategy unless you know for sure what your company is worth.

“Nearly 40 percent of active businesses [in the U.S.] will sell in the next 10 years,” said Mike Carter, CEO of BizEquity. “The haunting statistic is that 78 percent of the business owners who sell think they’re going to fund 80 to 100 percent of their retirement needs from the sale of the business. But if only two percent really know what they’re worth that’s a huge problem, not just for the owners but also for the economy.”

The reason so many business owners don’t know their company’s worth is they don’t add their expenses back into the total value, Carter said. He recommended utilizing the “Seller’s Discretionary Earnings” methodology in order to obtain a truly accurate picture of a privately held company’s value.

These expenses are generally ones that benefit the business owner, such as the owner’s salary, insurance premiums, and larger one-time expenditures. Knowing your SDE and total revenue is crucial to gaining an accurate valuation of your company.

In addition to being aware of your SDE and revenue, Carter recommended following these steps to determine your business’s value:

Research your industry. Utilize free search tools to find the North American Industry Classification System (NAICS) and Standard Industrial Classification (SIC) codes for your specific business. This will help you compare your value to other businesses in your sector.

Think about your growth rate. Long-term growth rate can factor into your business’s value, and could account for why your company is actually worth more than what the market says.

Don’t only use the buyer’s valuation. When you’re ready to sell, a buyer may make an offer based on his or her valuation of your business. Before completing the sale, be sure to get another third-party value assessment to ensure you’re not underselling your company.
If you’re planning on funding your retirement with the sale of your business, it’s important to begin evaluating your company’s worth now. Putting it off until shortly before you’re ready to call it quits is a recipe for disaster, Carter said.

“If you wait until right before you retire [to value your business] it’s like planning for retirement the month before you actually retire,” Carter said. “You wouldn’t do that, I wouldn’t do that, and yet millions of business owners are doing that every day.”

Business Continuity Plan Tips

As a business owner, you don’t want the first time you think about disaster recovery to be during an actual disaster. After a fire, flood or data loss, being prepared will hopefully decrease the damage done by the event, and get your business back on track sooner.

One of the best things you can do to prepare yourself is develop a disaster recovery or business continuity plan.

“Small businesses are vulnerable to failure when they’re impacted by significant events,” said Ken Katz, property-risk-control director at Travelers. “You’ll need to recover in a timely fashion, because your fixed costs continue even when you can’t open your doors.”

Factors to consider
If you don’t plan for a disaster before it happens, you’ll have to do it on the fly and make decisions when you’re stressed, Katz said. But what should actually go into your plan?

John Wise, CEO of Investcloud, a provider of cloud-based financial software and apps, said that disaster plans should assess and create plans for different scenarios both short and long term.

“They should detail key leaders and decision makers, backups and alternative forms of communication if cell towers go down or there is no power,” Wise said. “It’s ideal to have two alternate data centers — one close to access in person, and one far in the event of a larger-scale disaster.”

Thomas Phelps, CIO and VP of corporate strategy at enterprise content management company Laserfiche, said business owners make a few key mistakes over and over in their emergency-preparedness plans:

Not accounting for loss of critical people nor planning for the stress and trauma of staff
Not making the emergency plan accessible at the office, or making plans that are too generic, too detailed or stale
Failing to address communication choke points and having PR issues related to recovery
No alternative emergency operations center (EOC) or recovery sites, or having physical access issues with alternate site
Believing that outside assistance and insurance will take care of everything
Before you finalize your plan, be sure to address these areas, Phelps said.

Creating a continuity plan
Katz recommended the following steps to develop a formal continuity plan for your business:

Assess your risks. Know the threats that could damage your business, and determine how they might affect you.
Prioritize business functions. Decide the order in which certain business operations will be restored in the event of an interruption.
Develop prevention and mitigation strategies. Come up with strategies around the most important functions to prevent and mitigate the types of disasters you may encounter.
When your plan is developed, have your team walk through the steps of your disaster recovery plan to test it out. Ensure that employees know what to do, identify areas that need improvement, and routinely check plans and make updates as needed to account for staff change and lessons learned, Wise said.

“Your employees are critical to your company’s success, so it’s important to realize this and show that same consideration to ensure their safety,” he added.

While this may seem like a lot of things to keep track of, these events do happen, said Katz, and it’s best to be ready for the worst.

“It’s not often, but given enough time, something will occur,” Katz said. “It’s not a do-over activity — you only get one chance to do it right. The more you can think through what [a disaster] will look like for your business, employees and community, the more you can help your growth down the road.”

Corporate Social Responsibility Tips

Corporate social responsibility (CSR) refers to business practices involving initiatives that benefit society. A business’s CSR can encompass a wide variety of tactics, from giving away a portion of a company’s proceeds to charity, to implementing “greener” business operations.

There are a few broad categories of social responsibility that many of today’s businesses are practicing:

Environmental efforts: One primary focus of corporate social responsibility is the environment. Businesses regardless of size have a large carbon footprint. Any steps they can take to reduce those footprints are considered both good for the company and society as a whole.
Philanthropy: Businesses also practice social responsibility by donating to national and local charities. Businesses have a lot of resources that can benefit charities and local community programs.
Ethical labor practices: By treating employees fairly and ethically, companies can also demonstrate their corporate social responsibility. This is especially true of businesses that operate in international locations with labor laws that differ from those in the United States.
Volunteering: Attending volunteer events says a lot about a company’s sincerity. By doing good deeds without expecting anything in return, companies are able to express their concern for specific issues and support for certain organizations.
Why CSR matters
Liz Maw, CEO of nonprofit organization Net Impact, noted that CSR is becoming more mainstream as forward-thinking companies embed sustainability into the core of their business operations to create shared value for business and society.

“Sustainability isn’t just important for people and the planet, but also is vital for business success,” said Maw, whose company connects students and professionals who want to use business skills to do social good. “Communities are grappling with problems that are global in scope and structurally multifaceted — Ebola, persistent poverty, climate change. The business case for engaging in corporate social responsibility is clear and unmistakable.”

“More practically, [CSR] often represents the policies, practices and initiatives a company commits to in order to govern themselves with honesty and transparency and have a positive impact on social and environmental wellbeing,” added Susan Hunt Stevens, founder and CEO of employee engagement platform WeSpire.

As consumers’ awareness about global social issues continues to grow, so does the importance these customers place on CSR when choosing where to shop. But consumers aren’t the only ones who are drawn to businesses that give back. Susan Cooney, founder of crowdfunding philanthropy platform Givelocity, said that a company’s CSR strategy is a big factor in where today’s top talent chooses to work.

Examples of corporate social responsibility
While many companies now practice some form of social responsibility, some are making it a core of their operations. Ben and Jerry’s, for instance, uses only fair trade ingredients and has developed a sustainability program for dairy farms in its home state of Vermont. Starbucks has created its C.A.F.E. Practices guidelines, which are designed to ensure the company sources sustainably grown and processed coffee by evaluating the economic, social and environmental aspects of coffee production. Tom’s Shoes, another notable example of a company with CSR at its core, donates one pair of shoes to a child in need for every pair a customer purchases.

However, Stevens said companies need to really understand what their core social purpose is and how that aligns with their stated mission, to create a cohesive CSR strategy.

For example, Stevens said that Kashi, a Kellogg’s brand, wants to increase organic farming and is one of the few certified organic cereals. Since only 1 percent of U.S. farmland is actually organic, the breakfast brand worked with Quality Insurance International to help certify new organic farmers across the nation.

Practicing what you preach
Undertaking socially responsible initiatives is truly a win-win situation. Not only will your company appeal to socially conscious consumers and employees, but you’ll also make a real difference in the world. Keep in mind that in CSR, transparency and honesty about what you’re doing are paramount to earning the public’s trust, Givelocity’s Cooney said.

“If decisions [about social responsibility] are made behind closed doors, people will wonder if there are strings attached, and if the donations are really going where they say,” Cooney said. “Engage your employees [and consumers] in giving back. Let them feel like they have a voice.”

Stevens, of WeSpire, reminded business owners that the corporate world has more power than many realize, and using that power to improve the world can bring people of all backgrounds, ages and interests together.

“Given their power and sheer size, corporations can solve big social problems and have a huge impact,” she said.

How to Use Decision Matrix

One of the biggest struggles faced by business owners, leaders and managers is decision making. When faced with more than one possibility to choose from, a decision matrix can help clear up any confusion about the options and highlight points that may factor in the final call. This quantitative method helps determine the ideal solution for the organization to meet its goals, needs and wants.

BusinessDictionary.com defines a decision matrix as “a table used in evaluating possible alternatives to a course of action.” Its purpose is to help business leaders assess and arrange all of their options, especially when there isn’t a clear, preferred option. Also known as the Pugh method (named for creator Stuart Pugh), a decision matrix helps take the subjectivity out of the decision that needs to be made by carefully weighing all of the factors and criteria that are used to make a final conclusion.

“The use of a weighted decision matrixand rudimentary analysis provide a simple tool set for rapid group decision making on complex subjects,”

Creating a decision matrix
To make and use a decision matrix, you’ll need to create a chart. The different decision alternatives are listed as the rows, and the relevant factors affecting the decisions, such as cost, ease and effectiveness, are listed as the columns. Then, establish a ratings scale to assess the value of each alternative/factor combination. Each combination should also be given a weighted ranking to determine how important that factor is in the final decision.

Next, multiply your original ratings by the weighted rankings to get a score. All of the factors under each option should then be added up. The option that scores the highest is the decision that should be made or the first item addressed.

Decision matrix example
Decision matrices can be used in a wide variety of situations. In a book excerpt on ASQ.org, author Nancy Tague provides an example scenario of a restaurant that is deciding which aspect of the overall problem of long customer wait times to tackle first. They first identified four “problem” options: customers waiting for the host, the waiter, the food and the check. These would be placed in the rows of their decision matrix.

The relevant criteria about the problems, which would be placed in the columns, are: customer pain, ease to solve, effect on other systems and speed to solve. Customer pain, the most important factor for the restaurant, is given a weighted ranking of 5, while the others are given either a 1 or 2. Next, each factor combination is given a 3 (high), 2 (medium) or 1 (low).

In Tague’s example matrix, the effect on customer pain is medium, because the restaurant ambiance is nice, so it is given a 2. Since the problem would not be easy to solve because it involves both waiters and kitchen staff, it is given a 1. Additionally, the problem will take a while to solve, since the kitchen is cramped and inflexible, so it is also given a 1.

These ratings are then multiplied by the weighted rankings for those criteria. Each row of scores is then added up to come up with a final tally. “Customers’ wait for host” has the highest score at 28, which indicates that this problem should be addressed first.