Thursday, 6 November 2014

Brain Drain

My thanks to Josephus for a couple of recent reports and articles on matters close to both our hearts. The first was an item on the finally published report on the tragic deaths of firefighters in Warwickshire in 2007. The report states, inter alia, that the Fire and Rescue Service training system had become limited in scope, and required significant review. It went on to say that the "Integrated Personal Development System" (IPDS) "competence based scheme" was not meeting the services' expectations as personnel were training to complete "portfolios" rather than focusing on "firemanship".

Funny that, this was exactly what both Josephus and I identified and argued when the scheme was first "rolled out" with great fanfare as the future of fire and rescue service training. The reality is that both of us were long enough in the tooth to have witnessed the failures of so-called "on station training" and "learning on the job" when not reinforced by formal progression training with examination and practical assessment. No amount of "ticks in boxes" can ever substitute for experience reinforced by knowledge, yet the champions of IPDS (all, one might add, rewarded with 'Honours' or very nice promotions and postings for their efforts) publicly declared that "knowledge of theory was unnecessary, you only had to know how to 'do' something".

Tragically, their wonderful scheme is now showing just how deeply flawed IPDS is. Deaths on duty have climbed steeply since its introduction and the scrapping of knowledge based examinations. There are other factors in play as well, however, one being played out right before our eyes at the present moment. While, on the surface, the battle over Fire Service Pensions appears to be simply about changing the retirement age, it is part of a much deeper ailment. It is now openly declared that a fire fighter should not expect to spend his/her entire career in the service. One young HR Director (in my day this post would have been filled by a crusty and battle scarred SDO or ACFO), blithely told me at a meeting that she discouraged people from thinking they could expect a 30 year career and a pension. In her view it was "healthy" for the Service to have a high staff turnover. Worryingly, at least in the meeting, the CFO of the FRS concerned, agreed with her!

Which brings me to the second article. It is rather long, and can be read here with the title "Inside the World of HR" . The author opens with the experience of Tesco, just a few years ago set to take over the world - or so it seemed - but now in deep trouble financially. The article identifies one of the major flaws that has entered business in the last 40 or so years - the haemorrhage of knowledge and experience due to high staff turnovers. The author cites several studies conducted by scientific bodies which identify that fact that any organisation actually 'owns' about 10% of its "knowledge" - the other 90% is in the heads of its employees. Now most employers will argue they "own" that as well, but the fact is they don't, and can't. Each individual has developed special and unique experience, it cannot be transmitted in any other way than the much maligned "sitting next to Nelly" system of sharing. Add to this now the most revealing findings of the studies cited in the article I've linked.

Most major organisations have a 15% per annum change of staff. The authors of the study from which that comes argue that this is a success; according to them, it makes business more flexible and less likely to be "locked into" the past. However, what they don't acknowledge is that it takes, on average, only 7 years for any organisation to undergo a complete change of staff at that rate. With that goes all knowledge of what worked and what didn't work in the past. Thus, as with Tesco, wheels get reinvented, mistakes get repeated and ultimately, a successful and healthy business ends up in trouble.

The reason is quite simple. It takes at least a year (in the FRS it is regarded as 2 years for a recruit firefighter and, in the past, a further 4 years as a firefighter before you could be considered for promotion) for a newcomer to an organisation to learn the ropes and become fully productive. Now comes another devastating statistic - in all the studies cited the maximum length of time most spend in an organisation is 5 years. So, as an employer and, if I'm lucky, my new recruit today, will have just reached his/her most useful range of knowledge and experience when they depart, taking 90% of the knowledge and experience I could use, with them. As the author of the article shows by example after example, this haemorrhage of knowledge and experience is steadily destroying organisations.

There are a number of factors at work here, among them the prominence and power of accountants who see everything in the short term and in terms of "cost". Pensions "cost" so the solution, for an accountant, is make sure you have only the minimum numbers qualifying for one. Experienced and long serving employees "cost" in terms of higher salaries, benefits and "on costs" such as pension contributions - so reduce the number you have on the books as much as possible. Then there is the whole question of "management" as a "profession" (and I'll confess that I have a number of "Management" qualifications). The academic belief that there is such a profession is, in my view, serious wrong. "Management" is a function, not a "profession", and, if one cares to look at the most successful managers in the world they are all people who have a very wide understanding and deep experience of the things they manage. If you want examples of poor management practice, look no further than an organisation which has "generalist" managers parachuting into senior roles with little or no understanding of what they are managing.

I was amused to see that the author of the article I have linked, cites the UK Civil Service as just such an example.

How does one fix this situation? I'm inclined to think it will require a major shift in thinking, and a return to the idea that a career is for life and not just a short term step on the ladder to the next "job". It will require a total rethink in what is being taught in MBA and various other "Management" courses, and it will require a complete change of direction in "Human Resources" so that the value of retaining staff, and the knowledge and experience they hold will be seen. It is perhaps too much to hope for that the "short-termism" of our western business culture can also be eroded and the longer vision held by other cultures adopted.

Answers on a post card please ...

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