When purchasing a new IT system companies pay a lot of attention to what sort of return on investment they will get, especially when shelling out thousands if not millions of dollars. As such, it makes sense to consider what return on investment you are getting from the people you employ, as they too are a financial investment for your business. In almost any business, the CIO is responsible (directly or indirectly) for highly skilled staff members – the technical guru’s, system software experts and analytical people. These team members’ salaries are, on average, in the ‘high income’ bracket, as they are your company’s largest investment.
When you hire someone for such a position, he or she must possess the right capabilities, qualifications and experience for the job, as these people will influence decisions made on new systems and/or software implementations and upgrades.
We spend an enormous amount of time and go into great detail in analysis when purchasing a new computer system or software package. Why? Because the size of the investment justifies the effort. When you’re looking for a candidate to fill a position, do you put the same level of detail and analysis into the process? And once they are on board, do you continue to analyse their performance and output? If the average salary for a highly skilled staff member is $100k per annum, over a five-year period you will spend half a million dollars. What sort of return on investment do you expect, and more importantly, how have you planned to get it?
So, if we have identified the requirement for a return on your “people investment”, how can you go about implementing it?
Kiwi businesses need better leadership
Earlier this year Clarian Human Resources undertook the Great New Zealand Employment Survey. We found that 45 percent of employees believe that there is ineffective leadership in their organisation, while 43 percent believe that their superiors have unclear expectations of their staff. Both employers and employees told us that internal conflict and ineffective leadership are preventing excellence.
When employees perform poorly, their managers do not manage this effectively. Twenty-five percent of employees felt their leadership teams had not set performance expectations for the organisation. The irony? Employers felt they had communicated well. So what are the answers?
Solution one: Invest in your team
A great CIO (or an executive in any position in a company) invests heavily in his or her people. Generally, employees that are paid well are hungry to learn and to improve themselves – which can only be good for business. Our survey showed that employees want to learn more, and their preferred method of learning is on the job learning (82 percent) and internal programmes (76 percent), while 75 percent of employees also want to see coaching and mentoring as part of their development.
Do your people have the option or opportunity for professional development? Return on investment can be achieved if you develop the candidates you employ. You will find your employees will be happier, more likely to be loyal, and will become better at what they do.
You want a well paid employee to be achieving highly for your business and be a person who wants to continue to learn and develop. Does this model fit your existing staff members or the person you are looking to hire? Ask them the question, “What do you want to be doing in five years” and explore learning opportunities so how your staff progress will not only benefit them, but the organisation as well.
Your employees have a wealth of knowledge. Your company has spent money building it up so be sure not to let this knowledge walk out the door. The survey found that 53 percent of people left employment within two years, and 10 percent in the first six months. Think of the cost this would be to your bottom line, with having to train each new staff member. For CIOs and their teams, information is critical. What is your attrition rate and how well documented are your processes for handing over functions to new employees? If you are investing heavily in these people over a period of time, be sure to understand what makes them tick and what makes them want to stay with your organisation.
Solution two: Communicate (and communicate again)
The best way to keep your team and to keep them engaged is to communicate. Communicate, communicate, communicate and then communicate some more. When you talk to your staff, they should feel that the exchange has been effective for them. Interestingly, 65 percent of employers reported they had increased communications during the past 12 months, but 60 percent of employees reported that they had experienced a decrease or no change in communications in the same time period.
In order to get someone to work smarter, harder or even faster, measure them. If you employ people in the high-income bracket, they are looking for a challenge and may even thrive under pressure. Set benchmarks and be sure to reward based on performance. Make sure you understand what works for your staff. Some might prefer monetary reward, others a better work-life balance. Asking the questions, setting performance targets and, most importantly, following up on them, is the way to get the results and the long-term benefits you want.
Solution three: Know when you need help
Each of us has his or her own area of expertise and CIOs are particularly specialised in their fields. Sometimes it pays to get people in from the outside who can assist you with people management issues. Just as you may outsource for your servers or for your e-commerce system, you can outsource HR. You can get the help you need on an on-call basis and build your own human resource management skills at the same time.
Clare Parkes is the managing director, Clarian Human Resources where her team has been involved with a range of New Zealand companies. She is a member of the Chartered Institute of Personnel and Development in the UK.