Workers are softly rebelling, creating shifts and changes within companies that remind me of the beach erosions caused by storms. No matter how well developers plan and execute, nature eventually determines the landscape. Human nature, like any natural system, is powerful and complex. When unleashed it can strike with deadly force or it can slowly and systematically pound away until the landscape changes.

Today’s workers are slowly altering their workplace environment by their behavior. Their deeply held beliefs in self-reliance, independence, life balance, and individualism support their actions. Many attribute these beliefs and behaviors to the generation of 23- to 32-year-olds--Generation Xers. However, I disagree. Changing the workplace is not just one  generation’s agenda. These behaviors and beliefs are cross-generational responses to life’s changing demands. By studying and understanding these evolving trends, human resource professionals can redefine their roles and become key leaders in helping their organizations prepare for and manage their people power. However, to accomplish this goal, HR must transform. Here’s why.

Disturbing Pattern

When I consider all the retail organizations that I have studied, surveyed, and worked with, a disturbing pattern emerges--weak human resource departments. Most retail companies do not view the HR department as a strategic business partner or as an indispensable part of the organization. My executive assessments usually show merchandising, finance, or marketing in the top spot when I rate each department’s value and contribution to the company’s success as perceived by the company. HR inevitably ranks last, coupled with loss prevention.

I believe these ratings do not reflect HR competence but their perceived relevance. Senior management generally cites numerous examples of personal benefits and company values when asked specifically about HR’s contribution. Meanwhile, management rarely involves HR in company strategic planning and hardly ever asks HR to contribute to marketing or growth decisions. HR is involved when it’s time to implement. In its current corporate position, management views HR as an expense--a drain on company profits. It needs to become a profit center.

In this essay, I will discuss why and how HR must change and the quality-of-life issues affecting business today, show the significance of HR expertise, and demonstrate how HR as an integral part of the company gets direct results at the bottom line.

HR transformation begins with every HR practitioner. It starts with a clear, deep understanding of people and their quality-of-life choices.

Quality of Work Life

Work to live or live to work? Employees’ opposing views complicate management. Many older managers perceive younger workers as having a poor or nonexistent work ethic. Younger workers say “get a life” and refuse to be caught in what they perceive as an imbalanced existence. Younger managers face difficulties with older workers who are unwilling to accept change.

My research, however, reveals that both sets of workers are quietly influencing each other. They see similarities in their beliefs. Older workers often regret the dues they paid to the company at the expense of family and happiness. They now want a fuller life. Younger workers want to control the work that affects their lives. They want flexibility. Both are faced with family pressures and responsibilities, such as child care or parent care or sometimes both. Today’s workers reflect a hybrid of values, beliefs, and behaviors--not as a result of age but of the quality-of-life issue.

Our recent study of 1,400 retail executives, managers, and associates of all ages reveals some current beliefs:

• 42 percent would leave their job and follow a good boss rather than build a new relationship
• 76 percent would leave their present job for less money to work for a company that offers personal development and flexibility
• 58 percent believe that an outsider has a better chance of getting the job or promotion that they want
• 72 percent of managers have no clue about their future with the company
• 81 percent feel that the way to the top is strictly political
• 84 percent--the most important finding--like what they do but not where they do it. Specifically they cite company policies that inhibit creativity, rules and procedures that make no sense, and executives who exist on a planet called entitlement.

Our survey also discovered:

• Many retail companies forecast that part-timers will account for as much as 80 percent of their workforce.
• Part-timers’ overall job performance scores were approximately 30 percent higher when compared to full-timers’.

In the recent past, many workers, on all levels, would simply leave their employers if their needs were not met. This trend is now reversing. As the figures in the study show, even though work conditions can be disappointing and frustrating, many workers are opting to stay, chip away, and transform the company. They find this task challenging, stimulating, and “cool.”

Many believe that they can force the company to change for the better, specifically by creating loosely organized, cross-departmental teams that, in their own venues, contest existing policies and politics. One company’s team dubbed themselves “The Terminites” [not a misspelling].     

In addition to polling fellow workers on issues ranging from schedules to meetings, they pooled money and quietly hired a labor attorney as an adviser. Management made changes. Afterwards the CEO told me, "I didn’t know what hit me. But when I put my ego aside, I realized they made sense. They were prepared, had hard facts, and were extremely polite. We need more of this type of caring."

Erosion in the labor pool is also forcing retailers to re-think policies and demands that no longer work. Consider these current real life examples of practices that employees question and many refuse to accept:

• A policy that requires every store manager to work three weekends every month. Reason: That’s our busiest time.
• A silent standard that working a normal eight-hour day means you are not serious about your career and should not expect to get promoted.
• A career path that forces an employee to learn jobs in which he or she has no interest or natural aptitude.
• The practice of treating part-time workers as a necessary but insignificant commodity.
• Annual reviews based on outdated job descriptions irrelevant to work performed.

Our surveys show that many of today’s younger workers exhibit persistence, and older workers are adopting this newfound attitude. They believe their desired changes are good for everyone--company and employees. If they don’t win change immediately, they regroup, rethink their strategy, and try again. They believe in speaking the unspeakable, in being pragmatic, not cynical. They want to be treated as customers, not commodities. Many senior managers complain about the arrogance. Today’s workers view assertiveness as their right. They prefer to persist rather than quit because they know it doesn’t get better elsewhere.

By understanding today’s workers, HR professionals can help companies find ways to balance employees’ increasing work and family challenges so they are satisfying and profitable to both employee and employer.

HR’s Strategic Roles

Workers and line managers, not necessarily senior management, are forcing HR to transform. They are questioning traditional orientation and training programs, requesting more learning tools, and demanding faster response and communication. They are forcing HR to be what it should be--a resource. HR professionals have no choice. They either become engineers and developers predicting and responding to these lifestyle and attitude changes, or they will eventually disappear from the retail landscape.

Future HR management will shift most of the routine, time-consuming bureaucracy to technology. They will emphasize the human element. The new HR will focus on personnel retention and development. HR professionals will be coaches, counselors, mentors, and succession planners. They will also be the knowledge source for increasingly complicated labor laws and government policies. The new HR will promote and fight for values, ethics, beliefs, and spirituality within their corporate community. They will effectively build relationships with the outside community, schools, nonprofit organizations, and families.

To succeed, HR must be a business driven function with a thorough understanding of the organization’s big picture. It must be viewed as a strategic consulting partner providing innovative solutions and influencing key decisions and policies. To examine the strategic vitality of your HR department, consider the diagnostic questions at the end of the following role descriptions.

Trusted Insiders

HR practitioners prove personal credibility through careful attention to the minor day-to-day activities that seemingly go unnoticed. HR’s response time, quality and effectiveness of casual communication, rule enforcement, openness to diverse opinions, and personal conduct contribute to employees’ perceptions of HR’s professionalism and trustworthiness.

HR professionals earn trust by:

• Being well informed
• Taking a position on issues
• Communicating directly
• Demonstrating high integrity
• Challenging the status quo

Ask: Is HR viewed as a partner or an enforcer? Do employees seek out HR as a confidante? Does HR participate fully within the inner circle of management?

Quality-of-Life Experts

HR becomes the in-house expert on workers’ time requirements, family and social obligations, team responsibilities, and developmental needs. It learns how workers perceive the company and its management. With this competence HR provides alternative insights on business issues, educates management on the consequences of new policies and directives, and influences decision making.

Ask: How will our employees react to this decision? Are we sending clear, consistent messages to everyone? What is the ratio of cost to productivity gains in our decisions? Are we demonstrating heart and soul?

Job Matchmakers

HR installs systems that measure an applicant’s beliefs and values for comparison to the company’s beliefs and values. HR assessments match applicants’ behaviors, attitudes, and job suitability to position templates. This replaces "gut instinct" hiring decisions, which significantly improves employee retention rates.

For example, I consulted with a mid-western retailer to help reduce turnover and boost retention through a more effective hiring process. We developed position templates and taught hiring and Insight-interview(R) techniques. Within one year, the test stores retained 76 percent of new hires while non-test stores retained only 34 percent. The test stores also reduced interview time from an average of 45 minutes to 20 minutes. Cost savings were in the mid-six figures.

Ask: How are employees selected? Who currently creates job descriptions? Does our current process match person to position? Have we recently trained our interviewers in effective techniques?

Company Communicators

CNN began with a simple idea--provide the world with news on a 24-hour basis. So can HR. Too often HR is viewed as a management puppet that dispenses information on command. To change this perception, HR consistently works with senior management to communicate policies, decisions, and plans with honesty, sensitivity, and timing.

Ask: Are our messages tailored to our audience? Do we include background information and fully explain our reasoning? Are our workers first to know, or do they receive information from the news media or the rumor line?

Information Source

HR becomes the information source rather than the recipient. It stays immersed in facts from all key areas of the business--including marketing strategies, expansion plans, customer data, P/E ratios, sales focus and results. It creates and maintains a safe environment where workers can come for information that they choose not to get elsewhere. Resource is its last name.

Ask: Is HR the first place workers come for answers or clarification? Does HR consistently answer questions correctly? Does HR think in terms of commercial success?

Prepared Mediators

HR builds its own "doplar radar" to help predict tumultuous activity that can forever change a company’s landscape. Some of the predictable storms include, but are not limited to: sexual harassment grievances; gender, age, or race inequities; biased performance reviews; probation and termination policies; and compensation discrimination. The radar’s effectiveness is a result of a foundation of strong established trust and sensitivity.

Ask: Is HR attuned to daily ofice interactions? Does HR teach and maintain--with strong corporate backing--a "no exceptions to the rules"  policy across position lines? Is HR well versed in current behavior rules, laws,  and guidelines? Is it well connected to experts on these issues?

Business Sleuths

Competition awareness is a given. HR goes beyond. It studies similar industries and is curious about banking, hospitality, entertainment, communication, technology, and automotive. All of these have customers. All employ people. All struggle daily with worker and customer issues. My point is that HR practitioners are well served when learning lessons from varied sources.

In the words of one CEO from a major retail company: "Increasingly I look to my HR executive for advice. But I also expect that advice to be backed by facts and examples. Her ongoing involvement in professional organizations outside of retailing provides her with a unique perspective and information that is of great value to me and to the company"

Ask: Does HR regularly network with HR professionals from other industries?   Participate in conferences and meetings not limited to HR issues? Promote an ongoing company policy for learning and development?

Business Strategists

HR challenges policies--written and unwritten--if they no longer make sense. It demonstrates how proposed changes will affect the bottom line. It takes a risk.

For example, a senior VP of HR in a southern-based department store chain wanted to eliminate a long- standing company policy against job sharing. The senior executive committee opposed the change because they considered the time put in equivalent to hard work and dedication to job and company. The VP stood his ground and argued that this policy caused productive and good management people to leave. Proving that these employees left even though compensation from the new employer was lower, he gained the committee’s attention. He then successfully argued that two people sharing the responsibilities of one position would improve productivity, increase output, strengthen decision making, and serve as a role model for teamwork. He explained that employees with added responsibilities of child or parent care often could not afford to hire help. Job sharing provided the solution. He also stated that putting in "face time" demoralizes employees and makes no sense to today’s workers who insist on a balance between working and other life pursuits.

Results became evident quickly. Turnover in junior and senior management was reduced by 38 percent last year and is decreasing even further this year. Profit margins in the shared job areas have improved, and the unmeasurable results of higher morale and stronger relationships have become evident.

Ask: Can we find a better way to do this job? How can we innovate but still achieve our business objectives? What can we explore to positively affect both worker and company bottom lines? What is the worker’s bottom line?

Education Customizers

A new approach begins with the premise that workers need to learn only what they need to learn. HR rethinks training and education programs that assume all workers require the same training. It provides employee education by first assessing what the individual knows and does well. Then, HR provides the tools that allow individuals to pace and control their own learning. Following training, HR assesses and measures improvement. Large retailers currently use interactive CD-ROM or CBT [Computer Based Training] programs. However, even smaller companies are beginning to use and see the benefits both as cost savings and a skill improvement method. HR shows that it is more than a training department. It is in the business of developing and retaining productive workers.

One HR executive compared traditional program development and training delivery costs to worker education through CD-ROM technology. Her analysis was an eye-opener and resulted in a larger budget and a stronger partnership with the CEO and CFO.

Ask: Are we implementing strategic business educational plans? Have we produced measurable results? Are we cost effective in our delivery? How must the function and responsibilities of trainers and program developers change?

Management Partners

HR builds partnerships with line managers and executive management. It shows each manager’s impact on each employee.   It provides opportunities for managers to learn leadership skills, then assesses their employee retention rates. As a result, HR improves departmental recruitment, employee satisfaction, and company profits.

Our recent research points out that the biggest deterrent to successful recruitment of college graduates is their perception of the retail industry gained from part-time retail job experiences. At fault are inadequate store managers who mismanage young part-time workers and cause disenchantment with retailing.

Ask: Are managers held accountable for people development? Who are they coaching? Who are they mentoring? Do they ask for HR help in analyzing employees’ needs?

Techology Experts

HR studies, analyzes, and lobbies for company investment in HR technology. Many retail HR departments are woefully behind in software, systems, and technological tools simply because budget allocations generally favor profit producers rather than HR administrative functions. Few retail organizations truly believe that investment in improved HR systems will significantly improve productivity and profit. Yet in the companies making this investment, the benefits include reduced operating costs, greater efficiency in service, improved communication at all levels, shift of priorities to development of people instead of paper, and elimination of costly duplication of work. In one retail organization with 48 department stores, a computer-based hiring system reduced hiring costs by 52 percent and improved employee retention by 38 percent within two years.

• Does HR have an identity? What is it known for?
• Does HR predict outcomes, inform management, and communicate a strong point of view?
• Do both management and front-line employees trust HR? What’s the proof?
• Is HR a constant, reliable information source? How do we know this?
• Is HR verbalizing and living our company values? Do all employees clearly understand these values?
• Does HR read and understand the company balance sheet? Does HR know the company’s profit to earnings ratio?
• Does HR know and understand the focus and vision of other key divisions-merchandising, marketing, finance, MIS, and others?
• What are our CEO’s chief concerns? Why? What are the three top business objectives of HR this year? How are these linked to the company objectives?
• What is HR’s focus in training and development? Are current educational programs producing results? If so, have these results been documented and communicated to senior management and all employees?
• Is HR teaching managers how to grow talent and lead people? Are managers held accountable for employee retention and development?
• How does HR’s education and development strategy influence individual behavior?
• What are the costs of employee replacement at all levels? Is everyone aware of these costs and their impact on profitability?
• Is HR a truly diverse and unbiased organization?
• Does HR teach tolerance and respect for differences in others? How? What evidence is there that these efforts are working?
• Does HR have a clear and well-understood succession strategy?
• Does HR provide individual leadership and executive coaching?
• Are the core competencies of all jobs well defined and measurable?
• Are reward and recognition programs in line with employee needs? How do they compare to our competitors’ programs?
• Is HR a professional communicator who tailors all messages to each audience?
• What recent investments have been made in technology and systems? How proficient is HR in using them and monitoring results?
• How does HR learn, develop, and nurture an individual’s growth as a professional?
• Is HR delivering or just doing?

Ask: Which tasks and goals would most benefit from a shift to technolocgical systems? What are the state-of-the-art tools? How will customers benefit from this investment?

In Conclusion-A Message for CEOs

My final message is directed to chief executives. HR professionals cannot accomplish this transformation alone. They need your direction and commitment. Your HR executive is your link into your entire organization.

Have you created a safe environment that allows this individual to tell you the truth?  Does he or she trust and believe in you? Maybe this example will relay my message best.

A retail company--147 stores--was being acquired and restructured. The CEO was meeting with approximately 400 managers to announce the news and address the inevitable questions of workforce stability. He knew that retaining many of the talented people was part of the acquisition deal and critical to a successful transition. He also knew that the best always leave first. Professionals drafted his speech, which he edited.

A draft of the speech found its way to the HR director. After reading the planned speech, she knew that it would not be well received by the meeting participants and would probably result in negativity, fear, and a quick loss of good people. She felt the CEO was not addressing every attendee’s primary concern: what  about me? She had two worries--the employees’ feelings and the CEO’s resulting image.

She also knew that criticizing the speech was not an option because the CEO obviously was focused on the reaction of the board, the shareholders, and the media. Taking a big risk, she stayed up all night writing a speech that she felt would be forthright, caring, visionary, and direct. The next morning she requested an emergency meeting with the CEO. He gave her 15 minutes. Handing the re-written speech to the CEO she said simply, "Please just read this and then I’ll explain." Questions, not explanations, followed. The most memorable was, "Why did you do this?" Her answer was simple: "I was afraid of the consequences for you and for the company."

For profits, you need people who perform. Period.

Readers who have questions or comments about this article may e-mail Ms. Kabachnick at: ASKTERRI@aol.com.

Jay A. Scansaroli and Phillip R. Smith, Arthur Andersen Publisher

Center for Retailing Studies

Leonard L. Berry, Editor

Shirley E. Bovey, Associate Editor

Cindy Billington, Business Manager

The Retraining Issues Letter is a bimonthly essay co-publlshed by Arthur Andersen and the Center for Retailing Studies at Texas A&M University.

The Arthur Andersen WorldwIde Organisation provides professional services in accountmg and audit, tax, management information consulting, and professional education to clients through 300 locations in 66 countries The firm provides services tailored to the needs of retailers from the small closely held to the largest companies.

The Center, founded in 1983, is a bridge between the academic and retailing communitles.  It is housed in the Department of Marketing, Lowry Mays College & Graduate School of Business, Texas A&M University.

Center programs prepare students for careers in retailing and provide education and research to retail firms. The privately funded Center is committed to excellence in retall education, research, and service.

Readers interested in obtaining back Issues of the Retailing Issues Letter  may contact the Center for Retailing Studies, Department of Marketing, Texas A&M University, College Station TX 77843-4112.

Telephone: 409 845 0325 Fax: 409 845 5230 www.crstamu.org