Management

Know Your Internal Labor Market

What’s the Big Idea? 

In the end, it’s not the vision that makes the business – it’s the people. Yet the hiring and managing of employees is the achilles heel of many an otherwise tightly-run organization. Why? Because human beings come with many more variables than do widgets – we’re trickier to assess, our motivations are complex, and we change over time. 

Haig Nalbantian, author of Play To Your Strengths and a well-known authority on human capital measurement and management, says that all personnel decisions need to begin with a careful assessment of supply and demand. On the demand side, businesses need to be asking: 

  • What are our sales needs and goals? 
  • How many and what mix of workers do we need to meet them? 
  • Do we need more teamwork or more individual achievement? 
  • Do we need more entrepreneurial risk taking, or more diligent control?  

Answering these questions in detail is key to identifying your specific hiring needs. But that’s only the beginning.  

Supply concerns the complex puzzle of finding the best workers wherever they might be, incentivizing them to perform their best toward the goals you want them to meet, and distributing them wisely throughout your organization. Here, says Nalbantian, the key questions are:  

  • Is our current pipeline adequate to meet those needs, or do we need to develop people faster or go to the outside market to get them?
  • If we have to go to the outside market to get them, do we know where such people are and how costly it is to acquire these kinds of people? 
  • If we’re asking employees to move internally – overseas especially – are we paying them sufficiently to offset the risk they’re incurring?  

Haig Nalbantian on making smart human resources decisions. 

What’s the Significance? 

While human capital management is complex, it’s the heart and soul of any business. Too often, it’s left more or less to work itself out while leaders focus on more straightforward goals and directives. Says Nalbantian: 

Start thinking about this whole workforce domain in the same way you think about other areas of business, recognizing, and this is all important, that if you thought asset management on the financial side was complex, asset management on the human capital side is all that more complex because people are not things, obviously.  People have volition.  A machine doesn’t decide I’m getting up and going on vacation today, or I’m fed up with my boss I’m not going to work.  People do.


Image credit: Shutterstock.com

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