4 September 2009

If you consult most dictionaries, you will find that "assets" are defined as inanimate things that are owned by a person or an organisation.

Why then do so many organisations claim that "Our people are our greatest asset" when clearly they, by definition, cannot be?

In the wake of WorkChoices in Australia and the GFC from a global perspective, there has been a huge push for change in corporate behaviour with an increasing emphasis on social accountability and collaboration with employees in decision-making.

If you look at it from a human resources management perspective, what we are seeing is a shift in emphasis to "human" as opposed to "resources" which is too often where the corporate focus has been seen to be over the past 25 years.

Some organisations have twigged to this issue and have dropped the term "human resources" in favour of "people and culture" or "people services" or like terms because they are genuinely committed to relationship-based management or at least want to be seen as people orientated rather than just having a focus on resource/headcount/assets.

So when organisations claim that their people are their greatest asset, what are they really trying to say? Is it:

• Our people provide fantastic service or
• Our people are our greatest competitive advantage or
• Our people are fun to work with or
• Our people are our most important investment or .......................

This (re)definition of the employer brand is perhaps one of the biggest challenges that businesses face as we emerge from the GFC and, in Australia, from WorkChoices.

The push for social change in employment is one factor that requires organisations to reconsider their people strategies honestly and with some degree of urgency - that message is coming consistently and loudly from Government, peak business groups such as the Business Council of Australia, the more enlightened unions and respected business academics.

Thomas Kochan, an advisor to US President Obama, recently attended a World Congress of the International Industrial Relations Association in Sydney as part of a US Mission which had this to say about DPM Julia Gillard's speech:

• "She delivered a clear message to the business and labor leaders attending the Congress and others who would read about her speech: the legislation is only the first step. Now its time for business, labor, and government leaders to get to work on building the workplace culture and relationships needed to make this legislative framework pay off for workers, employers, and the economy by finding new ways to train, reward, consult and work cooperatively together.” and
• "Other nations as diverse as France, Brazil, Denmark, and Korea are following Australia’s lead in modernizing key aspects of their employment relations systems through debates that build widespread public awareness of the connection between employment relations and economic vitality. We can and must adapt this central lesson to the U.S. if we are to achieve a sustainable economic recovery and build an employment relations system attuned to the needs of the 21st century workforce and economy."
  

What this says is that it isn't just about WorkChoices or just about Australia - it is a major global paradigm shift requiring a whole new management perspective and there will be no going back from it. A copy of the US Mission's paper can be downloaded below.

Additionally, notwithstanding the GFC, skills shortages still exist and will get worse so a well-defined and attractive employer brand will be critical to effectiveness in engaging and retaining the people needed to achieve business goals. That brand has to be relevant to this new employment relationship paradigm if it is to have any prospect of being successful.

For those organisations which might want to do business with government or participate in government-funded works or programs, pre-qualification as an ethical and compliant employer is likely to be necessary - how will you demonstrate this?

As organisations adapt to these changes in business thinking, they are also likely to be looking for customer and supplier relationships which are a fit with the new way that they do business and manage people; this is after all the way that their people will think and the "quality of people relationships" will be a key driver in selection of business partners.

And then we have Gen Y - if you want to engage and retain the right people for your business, don't spout platitudes and be real about your value proposition as an employer in word and in practice. Otherwise they will spot the contradictions and they won't engage with you (or not for long anyway).

The bottom line with all of this is that, whatever business you are in and whether or not you are supportive of the Labour Government's Fair Work legislative changes, those who do not adapt to this imperative for cultural change will be left behind.

If you are interested in exploring ways in which you can take that step forward in this new environment, call Peter Maguire on 0438 533 311 or email us at enquiries@ridgelinehr.com.au

 Kochan Down Under Report.pdf