HR is now able to manage supply resource chain

The HR function has defined itself in its developing form as arbiters and advisors on human relations. Consequently leading to self doubts about whether its role is central to business or peripheral.
The conventional view that HR largely deals with issues such as motivation, morale and complex HR frame work, has to give way to HR as the resource development manager both within and outside the organisation.

In the context of an economy that is witnessing strong growth, largely powered by the service economy, the business of HR becomes one of managing the resource supply chain. A country where 600 million are below the age of 30 with 30 years of productive work life left, any lamentations regarding talent points out to poor comprehension of resource management opportunities .

The current resource management challenge in India is one of converting the “raw ” material into “value adding” material. In one reputed corporate HR is viewed as a supply chain function, which handles the role of sourcing, processing and delivering “value adding” resources. In this process the function assumes the responsibility of first adding value to the “raw” employees such that they, in turn, can “add value” to the shareholders and the customers.

All principles of supply management are applied by us in this process. We start by identifying the various class and maturity of skill which is required for us to deliver products and services. This is then followed by a set principle that is, at what price a particular skill is productive enough to be acquired and deployed.

The normal refrain that market determines the price of a resource is misplaced, since the price of acquisition of a resource is meaningless without working out the equation of the “number of x times” the value it can add to run a business by having input costs which far outstrip the possibility of any surplus that can be created by being in that business.

Thereafter they carry out a very systematic monthly assessment of the overall and sectoral demand-supply situation. This will call for a deep understanding of the level of attrition within the organisation, historical trends, the critical from the non-critical, what is the market level of attrition in various other organisations, which skills are more vulnerable, what is the new supply in terms of freshers coming into the market, which are the sunrise skills, what is the supply coming due to churnout of non-financial service industry, what are the alternate sources and markets for skill acquisitions etc.

They run a resource forecasting meeting in the third week of every month where they have a tentative forecast for the quarter and a firm forecast for the month ahead. Since they have a very robust skill indenting process and a method by which they prioritise which skill is more critical for the overall achievement of the business objectives. Thus they are capable of raising a clear monthly recruitment plan for the month.

When they started four years back, they were happy with 50% forecast accuracy and today it has reached 80% accuracy between forecast and fulfillment. Each business/skill has a preset reorder level and Economic Order Quantity (EOQ) for the batch to be taken up for processing.

This does not apply to the high value yielding and critical resourcing needs. Actual recruitment process is an assembly line process. Each of the main recruitment functions is a separate process line that is indenting, forecasting, CV accumulation, bucketing CVs into skill and level buckets, testing, profiling, interviewing, offer making, closing out and inducting.

This helps to acquire a level of specialisation and productivity for each of the processes. This also helps to assign the right class of HR resource to each of these processes. Otherwise a high-value HR asset will be deployed to do the administrative work of arranging tests or interviews, while this asset should actually be maximising value by interviewing and handling the post-offer closing out process. Each class of HR asset should handle the appropriate level of value adding work. This also helps creating batch sizes which are economical for productivity to be maximised.

They have over the last two years also invested in reducing holding cost of “raw materials”. One of the key supply chain metrics for is speed-to-job and is tracked through “first-day first-hour productivity”. The reason the industry laments lack of talent is the industry readiness and not unavailability of people.