• Sunday, December 10, 2023
businessday logo


Human resources: A factor of production

Human resources

Happy New Year! I know this is the beginning of February, but that greeting is still appropriate. Many people make new year resolutions at this time of the year promising themselves they will be better in one or more areas. This also happens to companies who come together almost always in January or the first quarter of the year to decide what they want to do for the year or for the next so many years.

All this is good except for the fact that the extent to which one follows through almost solely depends on the personality profile of the individual or individuals involved in the planning process.

So let us take a few steps back. The factors of production are land, labour, capital and enterprise. When people want to set up a business they are usually very concerned with finding capital, to the extent that they let it determine whether or not they start a business. By the way, money is not the only thing that constitutes capital but it is what people focus on, I guess because it enables them to purchase other things that constitute capital.

They are concerned with the quality of the equipment and furniture they will be purchasing. The entrepreneurs are obviously very key to starting a business because… they come up with the ideas and organize the factors of production. The honest truth is that the most important of the factors of production ‘Labour” is the least paid attention to at the beginning of the business. It is the most important is because your people determine how high your business will go. If you have the best of everything and the worst, ill-trained people, you will not succeed.

Many people, especially in Nigeria feel that here there is a large pool of labour because we are so many people. They say this because they see all people as labour but there is nothing further from the truth than this. Everybody may be labour but not suitable for you.

There are different types and profiles of people suitable for different types of jobs. You have no business starting a company without having an organization chart of proposed employees. We find that many people have started companies without it.

In layman terms this chart shows your people structure just like you have the structure of your machines or processes, knowing what feeds into what, how and why. This chart helps you know which position interfaces with which position. How many people you need in each position and whether or not you even need a position.

This chart is very strategic as it should be based on the proposed goals of the organization, This speaks also to your systems and processes and it will help you deliver on organizational goals. This chart should show the picture of how your organization should be structured even if for one reason or the other you don’t have all the people on the structure yet in the organization. You can grow into your structure.

The organisational chart should not be skewed towards any particular current person in the organization and could be colour coded to show the different levels that are on the same pay grade. It could also be coded to reflect the people in the same level of seniority if for any reason this is different from the pay grade. (This happens sometimes if the role is an outsourced role or a short term contractual role).

This chart should help you come up with the job descriptions of each position. Your job description includes the duties of the employee, which should be related to the duties of the supervisors of the position and subordinates in the department. These duties will also be related to the goals of each department and the systems. The descriptions should also include the skills and expected experience.

The chart and job descriptions alone go a very long way in helping you get your recruitment right both for behavior and attitude and skills and help you in succession and career planning.

I digress; my point is that labour is the only factor of production that appreciates over time, depending on how they are treated. We are always complaining that there is no good staff but this is because we don’t prepare enough for them, we take the wrong people into the wrong jobs not necessarily skill wise but behavioural profile-wise. In recruitment, we have a saying, that you usually hire for skills but fire for behaviour and attitude.

We think we can make people do things by rules and regulations and coercion and in some cases physical abuse and general human rights contraventions. My only question is ‘how is that working for you’? You may think you are having some success but if you are going to be honest, you are not. I hear comments like, ‘oh if you don’t treat them like that they will not conform’. It does not have to be like that.

I got interested in human resources management very early, I think just after I got into secondary school and became aware of what my father did. He was in charge of Human Resources in an international organization so he had best practice. Even at that age, I realized that Human Resources was the backbone of any venture. He was one of the people who fought to get IPM established in Nigeria and was president of the Institute for eight years. I used to attend their conferences even way back then. Human resource management became very interesting

Even though I am a trained lawyer I came into the management of human resources because it is my first love. When we go abroad we are impressed with how things work smoothly and seamlessly. We think how advanced they are. I put it to you that it is their knowledge of the importance of the human factor that makes them successful.

I reeled off some things that your organisational chart and job descriptions do for you. So career ‘pathing’ is how you co-plan the careers of your employees such that they can see their future with you, thereby linking their vision with yours.

Succession planning is the plan of who will succeed who on which job. We have a problem sometimes when we promote someone out of a position. This is to find a suitable replacement because we have not groomed anybody for it.

What we then do is either not promote the person or promote an unsuitable person into the position. Neither situation is ideal of course.

In this column, we will be speaking about the things we need to put in place that will help us manage our human resources so that we can get the maximum utility out of them.By the way by now many people have forgotten about their resolutions because only certain types of people keep to their resolutions. Or is this a myth. Find out next week.


Olamide Balogun

Balogun is the founder of Box & Cedar Ltd a boutique Recruitment and  HR Consulting firm