Plain Talk for your CIO and CFO

Recently I have been asked a question which, although simple, is still critical for the success of any staffing department: “How can I explain to my IT department that staffing is not only a department that we try to squeeze as much as possible?” Or, “How can I make sure we get the support that we require to deliver value?” This question is critical in our times, as CFOs are looking very closely now at spending and are of course trying to cut everywhere. They even might be considering an outsourcing model where it may be conceivable. So the lack of visible benefits and tools to deliver value will possibly reduce staffing to a less and less important department, and could even go as far as outsourcing your world as a whole. How can I explain to my CFO that human capital is the key to our business? One technique that can clarify the value of human capital to the corporation is to ask your VP of Sales the difference between his or her top performer and an average performer in an equivalent position. Then show your CFO the difference. A study from McKinsey & Company showed how high performers generate more results than average performers: corporate officers they surveyed believe the average difference in impact for sales positions is 67%. How can I explain to my CFO that staffing shouldn’t be seen through the cost-control compulsion, but instead through the asset creation view? The previous calculation should give you a persuasive way to explain the anecdotal example, supported by observations from a reputable consulting firm. Now let’s use a more global view to establish that your firm’s return to your shareholders is impacted by your human capital practices. For this you can cite Watson Wyatt’s recent Human Capital Index study, which shows that companies either with good human capital practices or that are in the top quartile of the Human Capital Index generated, on average, a 64% total return to shareholders over the last five years ó versus 21% for the lower quartile or the companies expending less effort on human capital. How can I explain to a CIO that I need some good tools? Hopefully you have made the business case for a quality staffing function and the impact it has on the success of your business. The second element is to arm your team with the tools to achieve this. But in the CIO’s mind, you are not the only one who needs tools. The VP of Sales may present a big ticket CRM item with clear ROI. Similarly, as we explained for the CFO, you have to be able to show your CIO that what you are providing is the foundation for subsequent strategies with high ROI. At iLogos we have worked on the ROI of staffing solutions for the past two years and I can tell you that the bottom and top lines are very impressive. We should have no qualms about comparison with the ROI for any other type of application. Yet we still hear this from some HR professionals: “Okay, this is all good, but my CIO is really down to earth ó financially-driven, not value-driven. How can I explain that I need a good tool? The best answer I believe is to make sure you speak the language the CIO can relate to. For instance, explain this to your CIO: If it is so critical for you to cut costs, why don’t we put all of your team on 133MHz PCs instead of upgrading to those fancy 1GHz machines? You’ll probably hear that it is not the same thing ó speed is of the essence. So tell him that it’s the same issue for you: speed is of the essence! If there are objections to new applications, for example, tell your CIO, “Frankly, is this last version of the Windows operating system really making such a difference? Why don’t we keep all of our company on DOS?” If your company and its IT department use maintenance tools and support software, then ask, “Why don’t we keep the version from three years ago for this year?” In other words, use a context your CIO understands as a metaphor to express your department’s needs as a way to challenge and overcome objections. With this method, you should get some response. I hope you get the idea. I look forward to hearing some of the reactions along with your additional arguments and positioning as you strive to utilize the best staffing tools to obtain maximum enterprise-wide results.

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Yves Lermusi (aka Lermusiaux) is CEO & co-founder of Checkster. Mr. Lermusi is a well known public speaker and a Career and Talent industry commentator. He is often quoted in the leading business media worldwide, including Fortune, The Wall Street Journal, Financial Times, Business Week, and Time Magazine. His articles and commentary are published regularly in online publications and business magazines. Mr. Lermusi was named one of the “100 Most Influential People in the Recruiting Industry” and his blog has been recognized as the best third party blog.

 

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