Importance of Staffing
As HR professionals, it's important to consider the importance of staffing in organizations. The reality is that organizations are combinations of not just people but of course physical and financial capital as well. So people are one component but if you look at the scope of the costs associated with an organization's human capital, on average it's actually over 25% of the total revenue of an organization. Your book outlines some interesting quotes from business leaders, I like the one by Richard Fairbank especially, he says that most companies people spend 2% of their time recruiting, and 75 % managing their recruiting estates. Right? So the people make the place here, it's very important that you get the right types of people into an organization and this is where the interplay between the strategy that an organization has and the strategies that HR pursue is quite important. So you might think alright Walmart for example, a very simplistic example. Walmart is known to be a low cost retail outlet, right? So the individuals that Walmart might look to hire, especially at the retail level, are not necessarily going to be those who cost the most to employ. On the other hand, if you think about the Ritz Carlton line of hotels, you might imagine that they're not going to cut costs when they look to hire employees and this is the case. They're going to both seek and hire the best customer service they can find. And then they'll train rigorously as well, so they invest heavily in their employees. Again this is not the case, certainly not to this degree, when you look at Walmart. So that's really an elementary example of how an organization strategy, in the case of Walmart, to be kind of a low cost retail outlet and in the case of Ritz Carlton, to represent the pinnacle of customer service. So these unique organizational strategies will then work out into unique human resource, recruiting and staffing strategies.
Presidential Address to the Society for Industrial and Organizational Psychology, American Psychological Association Convention, Los Angeles, August, 1985.