Potential Concerns for Talent Management for their Human Capital Assets over the next several business cycles.

Potential Concerns for Talent Management for their Human Capital Assets over the next several business cycles.

A few vital signs and points to consider as we look at productivity in the workforce in Q4 and Q3 for 2010 and why this is important regarding cash hording and hiring for new employees. In the Wall Street Journal, Friday February 11, 2011, (P2) states: “With corporate America sitting on

large piles of cash and manufacturers

seeing a surge in exports to fast-growing emerging markets, signs are mounting that some of the benefits will start trickling down to employees.” Yes and… “It’s good for the economy, and it’s good for growth,” Mr. Bethune said. “But it’s going to exacerbate the inequality between those who are employed and those who are unemployed.” (See enclosed article or URL) In the Wall Street Journal, Friday February 4, 2011 – under the heading Vital Signs (P1) states: “U.S. workers were more productive in the fourth quarter.

Productivity, as measured by output per hour, increased at a 2.6% annual rate, up from 2.4%

in the third quarter and a bit better that the historical average. But lean work forces and aging equipment may limit many companies’ ability to keep increasing productivity in the year ahead.” Source: WSJ printed version, February 4, 2011 – (P1). The rest of the article is on A2 entitled:

Productivity Rise Offers Job Hopes.

The online version of this story is reviewed and posted online on February 3, 2011. (See enclosed article or URL) “For the full year,

productivity was up 3.6% in 2010 and 3.5% in 2009.

For the year the

labor costs fell 1.5%

after a similar drop in 2009. That is the first time since 1962-1963 that unit labor costs fell in two consecutive years, a Labor Department economist said.” (P2) In the Wall Street Journal, Friday November 5, 2010 there is a section on the front page of the paper that provides the quarterly change in productivity based in labor. Based on the results although there has been a slight uptick overall the

American worker’s productivity, it appears to be at capacity based on a lean workforce.


The real key of this message is the ability to keep increasing productivity without hiring and spending money to replace existing equipment.

When you look at the piles of cash companies are hording, pushing workers harder, providing some selective incentives to retain employees, the question then becomes what could be done to increase productivity and retain and enable employees to stay where they are? Invest in them and hire new workers to take the pressure off in key business areas. Vital Signs –“Workers were a bit more productive in the third quarter. Productivity, as measured by output per hour, increased at a 1.9% annual rate. That reversed a 1.8% decline in the second quarter but was still less than the average gain of 2.4% since 1990. Many companies’ ability to increase productivity from their lean work forces may be limited in the quarters to come. Source: Labor Dept. via WSJ. “

Companies can put off new hiring, and still improve productivity

, by using more machines or automated processes, among other things. “ November 4, 2010 print version. In the Wall Street Journal, November 10, 2010 in their Vital Signs section paper version, page one: The competition for jobs is intense. For each U.S. job opening at the end of September, there were five people looking for work, according to Labor Department figures. That’s an improvement from the end of last year, when there were more than six job seekers for every job opening. But in 2007, there were fewer than two unemployed people per job opening. (P1) Call to Action If we take into consideration the productivity output of the American worker based on the latest labor indicators of 1.9% as of November 5, 2010 and the comment made that increased productivity may be limited due to lean workforces from the WSJ Vital Signs report in 2010. If we then apply these finding to the burn out factors that the Talent Management teams face today; what could we begin to hypothesize about these concerns? If we also add to the review the February fourth and eleven 2011 articles and data we will see the Labor indicators still being low and in some cases high cash hoard in some companies. We can begin to see a gap in production, employees, hiring and equipment purchase – yet no true movement. What to do? Develop a change leadership plan to develop the needed change in the mind-set of the leadership to begin looking at the different tracks/class of employees, A, B, and C with the eyes of increasing efficiencies and production in the company,

move the 30% efficiency rates to a minimum of 50% efficiency rates within year one, year two with an expectation of 70%, year three in the 95th percentile.

In summary, begin to hire to take the stress off existing employees. Do not subjectively separate Human Assets into separate tracks. Begin an internal Change Leadership and Organizational Change management and invest in all employees as an asset, spread the investment equally. Determine if the efficiency rate of 30% increases for the organization. Assign people to the roles they are qualified for and where they have strengths. Provide meaningful work assignments to all workers. Not all workers will be leaders yet give each person the opportunity to reach their human potential in the work environment without tracking them. Bartash, J. (2010). Vital Signs. Unemployment workers per job opening. The Wall Street Journal. Wednesday, November 10, 2010. http://www.marketwatch.com/story/weekly-jobless-claims-drop-24000-to-435000-2010-11-10-841570. Bartash, J. (2010). Third-Quarter U.S. Productivity Climbs. Vital Signs – Labor Dept. Wall Street Journal, Friday November 5, 2010. Dow Jones & Company. http://www.marketwatch.com/story/third-quarter-us-productivity-climbs-19-2010-11-04. Sparshott, J. and Di Leo, L. (2011). Productivity Rise Offers Job Hopes. Wall Street Journal. February 4, 2011. http://online.wsj.com/article/SB10001424052748703652104576121843066398666.html?mod=ITP_pageone_1 Whitehouse. M. (2011). Higher Pay Gains Seen for 2011. Wall Street Journal. Friday February 11, 2011. http://online.wsj.com/article/SB20001424052748703716904576134310758664604.html.

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About Linda Savanauskas

An accomplished talent management professional with experience in curriculum design, development of learning strategies, and professional skills development training programs for the workplace. Collaboration in training programs includes small and medium size businesses (SMB) to larger organizations from Raleigh to Charlotte, North Carolina. Virtual instructor led training can be offered to any location.