Business Topics

Improving HR Begins with Losing Humans as ‘Resources’

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MCN Editor Karen Zajac-Frazee “Eighty-two percent of leaders throughout distribution believe the ability to attract and retain talent is going to be the challenge for the next decade,” Dirk Beveridge, executive producer, We Supply America, told attendees of a webinar offered by Wholesale Distribution Group. 

Because of this, companies will need to start raising people and talent to the top of their to-do lists, which had not been an issue until recently. But demographic shifts, labor availability, technology skills, wage gap inflation and other factors are changing the dynamic of leading people. 

Companies will need to think differently and they will not be able to accept the status quo. In order to fully understand where companies will need to go, they will first need to clearly understand the old strategies and approaches that have become outdated. And independent, family-owned or employee-owned distribution businesses will be perfectly positioned to win this war on talent, even if they do not realize it. 

Smaller companies have not believed they could win and have convinced themselves that they could not compete against the benefits that companies such as Amazon offer, including but not limited to their pay scale. ”We’ve convinced ourselves that because we’re a family-owned or smaller business there’s not the upward mobility in our businesses. We’ve convinced ourselves that we can’t compete,” Beveridge noted.

To solve this, distributors will need to go after top talent and believe they will be able to hire this talent. This will all stem from culture. “This all starts with mindset. We do have this amazing platform to help people live the lives they want to live. Mindset drives behavior.”

“In distribution we’re a product business. We’re a sales organization and we’re a relationship organization and not in that equation was the human resources business, and over the last decades the demographics didn’t say that we had to pay that much attention…Baby Boomers hired 30 years ago stuck around,” But now? “The game is changing.”  

Fixing the issue begins with rethinking the value distributors place on employees. “As of today, we must stop referring to our people as capital, as assets and resources. When we have that paradigm that our people are assets or resources, we use them in different ways than if we see the humanity in them, and we talk about the humanity of them,” Beveridge explained. Therefore, the current terminology and its value must be rethought.

“Rather than calling our people your greatest asset, I think they are your greatest strength and that will drive a lot of things,” Beveridge suggested.

In addition, companies will need to embrace the changing needs of their employees.

“Eighty-seven percent of us believe the needs of our employees have significantly changed, yet we still see people pushing back about hybrid work, we still see people pushing back on talking about wellness- and health-related issues. We see people pushing back about redesigning work to take care of children who need to be dropped off at 9:00 and 3:00. We must embrace and understand the changing needs of our employees,” Beveridge contended.

What will be the right leadership going forward? First, the very nature of leadership will be changing more rapidly than most will realize. Second, humanity will play a larger role in leadership. 
“Every individual who we look at not as an asset but as a human being wants to know that their work is meaningful, that it’s making an impact. They want to know that they have the opportunity to grow and fulfill their God-given potential,” Beveridge noted.  

This idea has led into the whole rethinking of the HR function. Some have thought  the HR name should be redefined. “If we focus on the person, not as an operator, not as a piece of equipment or a machine operations, I think we can do more to unleash that spirit within the individual to perform at high levels, to drive maximum value and productivity for the business. It’s people first,”  Beveridge observed.

Many times people have talked about wanting their employees to feel inspired and have felt that they have been doing more than just regular work, but some people have viewed this as soft. Beveridge disagreed, “It’s the profit that allows you to create six million jobs in distribution. It’s the profit that allows you to contribute to the local community. It’s the profit that allows you to invest in the future to hire more people.” He added, “I do believe that conversation has always been a profit sometimes at the expense of the people. When you look at today’s conversation at optimizing human capital development, the conversation is all about driving outcomes that are good for the company. There’s no conversation about driving outcomes for the person, for the human being. I believe I know from the cultures I’ve seen… I know that with the people first, culture grows and develops people to fulfill their potential to thrive. I know that drives profit as well.”

Those CEOs who have been so focused on culture and doing the right thing for the people have gone out of the C-suite and have made calls and visited with employees, and people want to be a part of that.

So what will be a significant focus going forward? Beveridge inferred that B-Corporations will be significant moving forward. “B-Corporations are C-Corporations just like everything else, but you are committing to contributing to more than the bottom line. It’s what a lot of these distributors are doing already.”

“There is a model called SPICE which says we are going to contribute to society. We are going to contribute to our partners, we’re going to contribute to investors, we’re going to contribute to our customers, and we’re going to contribute to our employees. This model sums up everything,” Beveridge shared.

Companies will need to be a force and get their stories out there, as the future will be asking more of the CEO than just the bottom line. The upcoming generations will need to prioritize what will help the world as they will want their work to matter. Beveridge commented, ”What a great evolution of capitalism.”

Moving forward, organizations will need to use a couple of strategies. According to Beveridge, the first strategy will be mindset. Companies will need to believe that they will have the ability to attract and retain quality talent.  The issue will be that many companies will not know how to do this or they will not have not done it yet. Next, companies will need to elevate HR to the C-Suite so that all employees will have a voice. In addition, there will be customer centricity which will mean that distributors will focus on customer experience and will help them to grow. 

However, the higher-ups will need to adopt this mindset. Employees will need to take ownership and continue to perform as individuals who will continue to grow, develop and go over and above. They  will need to be curious and want to add value to customers and the team. Also, employees will need to seed conversations with others.

Some companies will meet their employees where they are at and understand the varying needs that must be addressed to meet their potential. “This is a great challenge – we would need to think harder, work harder, listen harder.  Employee engagement drives customer engagement,” Beveridge implored.

Part of the challenge will be that many reward systems will not be aligned to reinforce the goals. “You need to have incentives. You have to think deeper about compensation, and there must be a team and company component part of it. There must be individual and team incentives. It can be recognition and transparency and employee development,” Beveridge suggested.

Beveridge said companies have done a good job of growing and developing 20 percent of their people, mainly the sales teams and emerging leaders. “It is incumbent upon us to rethink HR strategies to help not 20 percent but 100 percent of our employees thrive professionally and personally. We do that by helping them grow their potential.”