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Kronos Excels in Talent Management

Kronos Excels in Talent Management Share on Facebook

When the news is full of layoffs every day, how can there be a skills shortage?

As Deloitte & Touche pointedly asks in the title of its future-looking research report on all industries, It’s 2008: Do You Know Where Your Talent Management Is? “The talent shortage is not a theoretical or distant problem,” assures Richard Kleinert, a principal in Deloitte. Speaking of a separate survey Deloitte did with the National Association of Manufacturers (NAM), Kleinert reports, “eighty-three percent of respondents indicated these shortages currently affect their ability to meet customer demands. More than half reported difficulty achieving necessary production levels, with 43 percent reporting difficulties increasing their productivity.”

The impending boom in retirements of the baby-boom generation can only make this worse. One mitigating factor might be to identify present employees who can be trained for better skill slots. The No. 1 problem is deciding what are the skills that we need these days, says Bill Larkin, vice president for HR solutions with Kronos Inc., a software and services provider. Larkin acknowledges concerns over American industry’s outsourcing practices, but, he says, most US manufacturing jobs are the skilled jobs. We just can’t find enough people to fill these positions, because they’re so specific.

“The issue becomes ‘how do we define the work itself?’ and retain skills ‘to do what?’” he says. Larkin advocates an approach keyed on “position management” rather than an employee-centric system. “It’s much bigger than ’skills’,” he says. “It involves what knowledge is needed, and the worker’s ability and characteristics. Each [position] carries a certain amount of those. The employer needs to capture, keep and update this data among all jobs, especially in a large organization, and then do a gap analysis of all jobs.

“A person may be needed for a specific position, but that person might [already] be in another area” of the same company. “You don’t know unless you do analysis, and then train those people, or recruit outside for the defined position.” Worker performance measurement, says Larkin, is now “more of a weekly, monthly or quarterly dynamic. Traditional annual performance reviews are starting to go out the window.”

A well-conceived, sensitively managed HR program digs down into issues that impact retaining valuable and experienced employees. Deloitte’s Kleinert cites the example of a large manufacturer “which, like all manufacturers, was trying to reduce costs—and here looking at its pension plan, a traditional ‘defined benefit’ plan.” Management was “prepared to terminate, or freeze, this plan and switch entirely to a defined contribution, 401k style, plan.

“They were pretty far down that path,” he continues, “when they decided to do an impact analysis as to what effect that would have.” They ultimately halted the move, with particular deference to their engineering staff, “a major part of their value proposition to their customers,” this being in the aerospace field, “and among their most ‘mature’ employees,” meaning those with more than a passing interest in pension planning.

“What likely would have happened, had they decided to proceed with plans to terminate the defined benefit plan,” Kleinert says, “is that they would have really disenfranchised a large section of their engineers, who already were in short supply for them, and further exacerbated the problem by watching these depart.” Instead, he says, the company was “able to retain this group of engineers for a number of additional years in the workforce.”

On a starkly different level, a similar critical need for worker retention through HR strategy existed at FreshDirect, an online fresh food manufacturing and delivery service based in Long Island City, NY. Perhaps call it a uniquely challenging retention objective when the employees typically deal with varied work shifts, mostly throughout the night in a hectic workplace, for the company to deliver on promised “perfect orders with perfect quality at a cost-effective price” throughout the broad metropolitan area.

FreshDirect says it is satisfying its employees with their own “self-service” capabilities in their job management. In this case, it begins at a basic level with touch-ID data terminals from Kronos to capture time and attendance data, plus employees’ ability to perform a variety of options: verify accuracy of their payroll data, view their schedule, check accrual balances, and even to requesting time-off. Freed from manual employee-centric processes, the company’s HR professionals can focus on performance and compensation strategies and use technology to cross-train employees for additional roles.
Sometimes, it is simply a matter of making a committed HR program even stronger that helps a company like Green Mountain Coffee Roasters Inc. (GMCR) develop and retain an experienced workforce. In 2005, the Waterbury, VT-based firm upgraded its HR capabilities to more centralized operations with a comprehensive management package. It also brought its outsourced payroll system back in-house for all 700-plus employees. And, with the help of Kronos, it built a self-service Web interface that allows employees to request shifts, access their schedules, ask for vacation time, and schedule training, among other functions.

GMCR maintains a 90 percent voluntary retention rate, this amid the company’s current 20-30 percent annual growth which adds about 100 to the workforce each year, according to Kathy Brooks, vice president for HR and organizational development. The end-result of employee satisfaction? “An improved bottom line, absolutely,” she says.

What, really, is this “critical talent” that can be so elusive when companies seek it so desperately? Deloitte, in its 2008 outlook, ascribes it to “the groups and individuals that drive a disproportionate share of their company’s business performance.” Further, this segment collectively “possesses highly developed skills and deep knowledge” not just of the work itself but also of ‘how to make things happen’.” This is also something to consider alongside the Kronos Replacement policy.

Deloitte offers a pair of stellar insights into this. Firstly, in large pharmaceutical organizations, “blockbuster drugs” are the engine to fuel growth; in 2004, Pfizer’s top ten products each generated more than $1 billion in sales. “Needless to say, Pfizer pays particular attention to the researchers and clinicians who drive this development.”

Secondly, an outside analysis about FedEx suggested that the couriers who pick up and deliver packages might be more critical than the pilots who fly the packages through the night. The couriers have direct contact with the customer and must make continual decisions that impact the efficiency and effectiveness of the supply chain. Kleinert of Deloitte agrees that “there’s an apparent disconnect between, on the one hand, how it is possible there’s this skill shortage when on the other hand, you still hear about layoffs today.

“What’s important to realize is that the manufacturing economy within the US is huge and there is a natural ‘churn’ within it. So even though, in aggregate, it may be experiencing a shortage of employees with the right talent, there is simultaneously going on a lot of churn and layoffs and dislocation. That’s always going to be the case.”

The key now is finding employees with what Kleinert terms “the right ‘mix’ of skills, both technical and non-technical. Increasingly, employers are looking for fairly esoteric technical skills combined with really good group practice skills, problem-solving skills, team skills and communications skills.”

The manufacturing sector survey confirms that engineers particularly are in short supply. “But one of the interesting things that it showed,” says Kleinert, “was that the group of employees who are in the shortest supply are not engineers, but skilled production workers. This is front-line shop floor talent—machinists, operators, technicians. They are the folks who manufacturers were not hiring and developing for a number of years. And people were not tending to go into those fields anymore.”

Kleinert laments that “by and large, manufacturers are not being particularly creative today . . . thinking that their primary responsibility is paying competitive wages and benefits. But that’s not really enough.” He cites ineffective focus on training, too often “a sort of ‘just in time’ training: What exact skills do you need today, to do your job today? But employees want a sense that they are growing, developing, and getting new challenges.”

Larkin of Kronos observes that employers who recognize different work styles, who effectively provide career satisfaction while resolving “work and personal life balance” issues, are “actually starting to create ‘competitive differentiation’ within their industry,” gaining a certain recognition as “employers of choice.”

Larkin’s own perspective on these strategies comes from being with a specialized software company which grew with the industry over its 25 years from, initially, timekeeping and workforce reporting applications to an integrated software and services “solution stack” in HR management support, now from 66 offices worldwide. He poses the overriding questions today: “Will there will be numbers shortage? Yes, absolutely; everybody knows that. Will it be a skills shortage? It depends on how you manage it,” he says. “If you manage it correctly by getting people in and planning ahead in developing and training them, you should be O.K.”

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