Much as it aspires to be the most common tactics among business houses and even large corporates, the tool of staffing an operations with just the adequate workforce has grown out to be the single most area of concern and a serious question as to whether it at all propagates savings on cost. Assuming a business has a vision and that involves a professional operational mode, a decent expansion strategy and a quest for a healthy identity, primarily such businesses have a fair infrastructure of operations. When revenue is looked upon at a gross level, the business is automatically divided into revenue segments and the natural consequences are these segments are immediately measured in terms of their viability as cost and profit centres. Owners, promoters, stakeholders and CEOs lend out their visions along with their demands and the onus falls on the descending hierarchy of the business workforce to put things in place. Notwithstanding the fact, that majority of this workforce have a complete inclination in standing by the vision of the business and some even take a step forward by being passionate about it as well, the delivery commitment to the most important demand of business – “Profits” often bend the thinking of businesses to the extent that they prioritize on various aspects of cost cutting.
My observation during our assignments for business process optimization of several organizations, clearly had one single fact highlighted. One of the main defects of optimum delivery were under-utilization of the overall workforce potential. The most remarkable revelation was that all of these organizations had just the exact workforce required for their operational deliveries. Each and every time, the summary of our surveys indicated that the workforce was either exhausted, distracted or dissatisfied. Organizational policies and treatments often took care of the dissatisfaction factor but the serious concerns were distracted and exhausted employees. Even more surprising was the fact that there were no dearth in their willingness to perform, but just that, either they were exhausted or completely distracted and without a clue as to where they needed to head. Let me mention here that, when I talk of distraction, I am not indicating a gross level of inattentiveness but a continuous and nagging tendency to lose focus somewhere down the line.
Our optimization processes involved primarily defining the areas of optimization and then getting down to analyse the causes and defects. Once those were ascertained, we devised a strategy and implemented the same and followed up with a close measurement of the tangible impact the strategy had on the overall operations which also included revenue. The process often spread over three months and sometimes extended up to a year depending on the volume, size and criticality of the project. During analysis, we often found out that the performance indices of many employees were short by a gaping percentage in spite of their strong willingness and commitment to their job. Considering for instance, in one of our assignments, we observed that our reports indicated that the root cause of these gaps were exhaustion and also distraction from the objectives. The employees felt drained sometimes and hence some departments even saw high leave and sickness trends. Some departments had employees who after a certain extent went into an automated mode without knowing the exact purpose of working. In both cases the output reached an optimum but way below the potential.
We did a deep dive and arrived at a unique conclusion. Each and every department had staff shortage (adequate as per the organization) to the tune of about 10% to 14%. In order to verify our findings, we selected 4 departments at random and allotted some extra staffs. After a month of operation, we measured the changes and we were surprised to see the results. We did expect to see change but the results were overwhelming. The gap between the percentage of apportioned expenses and the percentage of apportioned profits were between 4% to as high as 10%. So allotting overheads on account of workforce was actually helping the organization increase its profits at a much higher percentage than the increase in their expenses.
The strategy was soon adopted for all departments and the results were as per expectations.
The changes were more impressive when we implemented our other strategies involving workforce development, cost centre analysis, standardization and a control mechanism.
Businesses, I have observed, have an inherent tendency to focus on optimization on their profit per employee figure. In the process, they tend to take their most important resource for granted and as a result the yields suffer. This reminds me of the marginal curve that we studied in economics and it stands so true in this scenario as well. Luckily for the nature that we human beings are of, we have the capability to revive our energy, revive our zeal, and revive our spirits when we are given the opportunity to take care of ourselves unlike others who have only one mono-directional journey of depreciation. But the question is, do businesses actually need to get to the point where they start over utilizing their human resources? I would very strongly opine, that in the negative.
Human resources are a boon to the business world and perhaps a unique resource that can change the fate of businesses and take them into different frontiers of success and stability. Businesses complain of attrition but don’t pay attention to the root causes of attrition, instead employ various means to treat the manifestations. The carrot and stick theory has passed its era of existence and it is time businesses all over the world realize that if an employee needs to be deserving to work in a business, the business also needs to be deserving to retain that employee. The equation is bi-directional and if adopted correctly can revolutionize the way businesses operate and revolutionize the success stories of businesses globally.
Subhopati Sanyal (COO – The Nistula Group)
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