Feature

How to boost the bottom line: get the best out of your department

Studies show that introducing effective workplace policies can cut costs and improve the productivity of your staff.

Redesigning work patterns around the contributions and competencies of staff and reinterpreting the concept of the office can increase productivity by keeping staff happy.

Last year Royal and SunAlliance reduced its UK cost base by 3% in six months by introducing measures that focused on work style, rather than job function. The company moved away from a rigid nine-to-five regime, proving that it pays to create a positive workforce.

The architect of the programme was John Blackwood, founder of consultancy JBA. He is working with Henley Management College on a programme called The Office of the Future, evaluating what happens when technology, culture and facilities converge. The outcome is significant competitive advantage.

Blackwood, who is visiting fellow at Henley, points out that the office is a relatively recent invention and needs to adapt to suit the requirements of fast-changing business. "The loss of cash to finance today's office structures is a woeful misuse of resource," he said, and advocated stripping out technology that encourages people to work on isolated tasks in premium-location sites.

Reducing staff overheads is perhaps the biggest challenge to business profitability today, said Blackwood, adding that increasing productivity by just a couple of percentage points would make a huge difference to UK plc.

Consulting employees about how they want to work certainly produces results, said Marc Adams, practitioner with industrial psychologist Pearn Kandola and a former analyst programmer.Ê "Creating a climate where people feel respected and valued means people give back that much more," he said. Policies that embrace inclusivity on any level have been demonstrated to give a financial return.

Adams cited a mid-1990s Covenant Investment Management study by US analysts that compared 100 companies with the best human resources policies with the 100 worst. Those with the best equal employment practices had five-year annualised returns of 18.3%, easily outperforming the 7.9% of the worst firms.

The Chartered Institute for Personnel and Development (CIPD) in the UK also confirms the correlation between a positive working environment and business performance. In research entitled Effective People Management, it commissioned David Guest, professor of HR at King's College, to explore the relationship between good HR practices and the bottom line.

After the first phase of the research, which has yet to be completed, Guest was able to conclude, "Greater use of HR practices is associated with higher levels of employee commitment and greater flexibility." In turn both HR directors and chief executives noted a connection between this and higher levels of productivity and quality of goods and services, with improved financial performance.

Guest identified 18 good people practices that included recruitment, training, consultative procedures and updating job specifications. Just 26% of the 800 companies surveyed implemented up to 50% of these, and only 1% operated 75% of them.

"A happy workforce boils down to three main issues," said Angela Barron, adviser to the CIPD and a judge of Computer Weekly's Best Places to Work Awards. "Employees want interesting and challenging jobs and they want to feel they have control over those jobs. And, perhaps most importantly, they want a good relationship with their line manager. People do not leave organisations, they leave managers."

Numbers confirm crunch factors       

  • The average cost of office space per head in London is £23,500 a year [Office of National Statistics Labour Force Survey, April-June 2001] 
  • Typically, only 50% of workstations/office space is occupied at any one time [JBA Time to Work research study, 2003] 
  • According to CIPD Labour Turnover report, "Seven out of 10 organisations experienced recruitment difficulties in the first half of 2003, with the average cost of turnover of managers being £6,807"  
  • 71% of employees would choose workplace flexibility over a pay increase [CIPD]  l 40% of full-time workers surveyed said they would be more productive if they were given more control over their time [JBA survey of 250 UK corporates].    

Forward thinking IT departments reap benefits   

Organisations that adopt HR best practice see a return in terms both of lower costs and greater business performance. For IT departments the challenges in trying to create a positive workforce are increased by constrained deadlines and budgets, pressure from end-users and the struggle to meet business expectations while dealing with the vagaries of new technology.  

Recognising these benefits and challenges led Computer Weekly to introduce its Best Places to Work in IT awards last year. With 500 nominations and 49 shortlisted entries, our expert judges have ensured that the process has been rigorous and the winners can rightly claim to be the leaders in developing positive workplaces.  

At the presentation ceremony on 5 February we will applaud those IT departments which represent the leading thinking in creating a successful and healthy workforce. In the run-up to the awards we will provide expert advice on how to create a positive workplace, and when the winners are known, the lessons from their success will be fully explained. We look forward to saluting the ways in which they have developed their workforces.


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This was first published in January 2004

 

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