Similar to my article on sales strategies, Human Resource Management can be broken down into four distinct areas. Those areas will help you target specific employees, should be deployed for different jobs, and targeted with different benefits and compensation.
When we divided sales strategies up, we built a 2×2 square that used current products, current markets, new products, and new markets to make 4 categories and ways in which we can grow our businesses. For human resource management, we will use Internal Labor, External Labor, Lower Cost, and Higher Differentiation as our four categories.
When combined together in pairs, we get four distinct strategies for hiring. The first is internal labor at a lower cost which are called Loyal Soldiers. The second is internal labor at a higher differentiation which we call Committed Experts. The third is external labor at lower cost which we call Bargain Laborers. The last is external labor at higher differentiation which we call Free Agents. Loyal Soldiers are company loyalists and are targeted as hires early in their career, they are seeking reliability and stability with the company and want to remain with that company for the long haul. The hiring company would plan to invest in training these workers across multiple skill platforms and intend for them to stay with the company for the long haul. This should lead to low turnover and even staying to retirement. These employees should fit the company culture and should show potential and motivation. Compensation for these employees will typically be similar for all and will have benefits for loyalty. Typically you will see these employees with a base pay, good employee benefits, profit sharing, stock plans, and bonuses.
Committed Experts are ladder climbers and could begin their careers as loyal soldiers that showed the promise to promote to a new level. They could also be a new hire with advanced skills, but is seeking long term employment and stability with one company. Development of these employees is the most important element. Resources should be spent on training them for the long haul to encourage low turnover. They should fit the company culture and their abilities should closely fit the job and they should show the potential for specific expertise. Compensation for these employees will utilize long term incentives and will reward high performance. Typically you will see them with an at risk compensation like base pay plus commissions, good employee benefits, merit based pay, profit sharing, stock plans, and bonuses.
Bargain Laborers are warm bodies and can be temporary employees that aren’t expected to be long term hires. Typically these positions require lower skill and they may be hired for a season or specific set of jobs. These positions see high turnover and frequent layoffs. These employees do not need to fit the company culture, but should show potential and demonstrate dependability. Compensation for these employees will be lower but consistent. Typically you will see a base pay, maybe even minimum wage with piece rate pay, and little to no benefits. Free Agents are stars and have specific expertise that is not found on a current team member. This is talent that is brought in from outside the organization and usually costs a premium to acquire. They require little training and can be plugged into their role immediately. These employees will see higher turnover and may leave voluntarily for other opportunities. They do not need to fit the company culture but absolutely need to possess the skills to fit the job they
were targeted for. They should show focused on short term incentives. Typically you will see at risk compensation based on commissions, merit based bonuses, piece rate pay, an aptitude and desire for achievement. Compensation for these employees will be higher and will be and performance bonuses.
Knowing which of these types of employees you want to target for an opening will help you in your recruiting and hiring practices. The setup of your hiring practice is important to know as well. Do you hire in batch or flow processes? In a batch process, you are looking to fill a specific opening and you are recruiting applicants in a group. In the flow process recruiting is an ongoing process and openings are filled when the right applicant is found or a position is created for the right applicant when they come along.
Knowing which of these types of employees you want to target for an opening will help you in your recruiting and hiring practices. The setup of your hiring practice is important to know as well.Aaron Morrow / NARSA President
Are you posting a realistic job preview? While making the job sound more glamorous or easier you might attract more applicants, but chances are they will be the wrong fit for the job. Giving a realistic preview of the job will help reduce turnover and find long-term employees.
Where are you posting your job openings? Are you using a broad or a focused approach? Broad approach will lead to number of applicants that will be narrowed down through the interview and selection process. A focused approach will seek out fewer applicants but will have targeted knowledge, skills, or abilities (KSAs). Broad approach will work well for Loyal Soldiers, Committed Experts, and Bargain Laborers. The focused approach will work better when targeting Free Agents.
Each position and within a company may require a different employee type, but being aware of which type would best fit the opening will help you design your hiring plan for that position. Make sure you have a realistic job preview, make sure you know whether you are planning a batch or flow process, make sure you know whether you are doing a broad or focused recruiting effort, and most importantly which category of employee are you targeting for this position.