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Performance Management: Finding the Staff vs. Spend Balance

Posted by: on 23 August 2017 in Human Capital Management, Human Resources, Payroll

Recently, Facebook had a problem with harmful posts that violate the social giant’s terms of service making their way onto the two billion strong network, causing problems for users and law enforcement alike. As noted by Tech Crunch, the organisation plans to address the issue through a combination of technology and performance management spending — 3,000 people will be added to its operations team, joining 4,500 already in place. Even for a tech leader like Facebook, this is a big investment, but one it must make to address emerging media issues. But what happens when challenges aren’t so easy to spot? How do finance and business leaders find the ideal staff/spend balance for their organisation?

3 Universal Pain Points

While every business faces unique challenges there are universal pain points, which are problems or opportunities that suggest that hiring new staff is the ideal path to effective management.

1. Stressed-out staff

Is your staff showing signs of overwork? Professor Andrew Stewart from University of Adelaide said in an ABC article, “Australians are among the world’s hardest workers”. This has some irony since Australia led the way in creating standard working hours, more than a century ago in the 1850s.

Overworked staff may not come to managers directly, but leaders keep an eye on sudden spikes in sick days and vacation time taken, along with an ear to the ground at the water cooler — if there’s general dissatisfaction about working conditions, find out why. Often, the problem is tech-based: IT services aren’t working as intended or there’s frustration around access requirements. But if finance leaders can verify that staff have been putting in extra hours and still can’t keep pace with demand, it’s time to consider hiring new employees.

2. Meeting new or changing expectations

Amazon’s decision to roll out a full retail presence in Australia is arguably one of the most talked-about business ventures in the Australian market in decades. As Amazon builds operations in Australia, it has been on a hiring spree. Why? A significant part of  Amazon’s strategy is to reshape online shopping and customer price expectations across the country, this requires excellent technology — and a large team of expert local staff. 

3. Pervasive problems

Sometimes, problems happen. In the case of Facebook, its massive user base and global reach put the network at risk of handling and displaying inappropriate content. And while most finance leaders won’t come up against something quite so far-reaching, social media remains a good example. If customer concerns aren’t being addressed quickly enough, or if your website has become a haven for Internet “trolls”, investment in more human oversight may be the ideal remedy.

The Real Costs of Performance Management

For finance experts, identifying more staff as the performance management solution leads to questions about initial, ongoing and long-term costs. First, consider training: How long does it take to train new employees, and how much assistance do they need from existing staff? What kind of instructional materials and equipment is required? How are new staff evaluated? Here, your biggest cost outlay is time: Time for new employees to get up to speed, current staff to monitor their performance and managers to evaluate their overall success. If you’re in a period of massive change one way to give your HR team more time to focus on strategic activities could be through business process outsourcing. A common area many organisations consider outsourcing is payroll — here are eight important questions to ask when evaluating if a managed payroll option suits your organisation.

That leads to the next consideration — salary. Are you planning to offer competitive rates or beat the market to attract the best talent? What does your raise structure look like, and are you hiring hourly employees or opting for salary? The organisation may have enough work for more full-time employees over the long term, or you could be better served by contract-based experts. But do you have systems in place to manage a new, more flexible workforce? The right time capture, rostering or leave management tools and processes can reduce costs, risks and manual effort required to manage employees — increasing your productivity. With an estimated# 70 per cent of operating costs coming from salaries, overtime and other compensation – any payroll error could be a significant risk to your profitability and growth

Finally, consider the costs of retention. What benefits will you offer new hires, and how do they stack up against other organisations? Here, benchmarking data is essential; without a sense of what other firms are doing in the same space and why, you’re at risk of losing great employees because they don’t see enough value-added benefits in your workplace.

Bottom line? Sometimes, more staff is the best answer. For finance leaders to feel confident about this kind of spend, however, it’s important to consider both the problem and the price — will new employees solve the issue, and what’s the real cost of bringing new employees on board and keeping them satisfied? Armed with the right knowledge, performance management becomes a question of benefit tempered by balance for maximum return.

#The advantages of workforce management’, (2014), HR Magazine

 

This post was originally published on ADP Boost.

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