Category Archives: Business

The Single Best Incentive You Can Offer Millennials!

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The world is millennial crazy. If you read this blog you know I think about 99% of the millennial stuff is pure B.S. (we were all young once, it’s mostly great, but sometimes sucks, buy a helmet!), but every once in a while I find something that really hits home.

Student debt is the real deal!

I’ve gotten up close in personal with this. I have two kids in college who are just starting down this debt path. I also have a brother who is a millennial who gets punched in the gut each month he has to make his mortgage-sized student loan payment! Great white collar, professional career, well paid, can’t even think about buying a house. That sucks!

Take a look at his chart:

So, if you truly want to attract great millennial talent you need to do a couple of things:

1. Offer as a sign-on to pay off their student debt.

2. Offer home buying, mortgage assistance.

Why? Turns out employees who own a home, stay around a lot longer, are more productive, and I work for a company that cares enough about me to help me with my student loans and to buy a house, I’m probably a bit more engaged as well!

Here’s the other dirty little secret we know in HR. Let’s say you have a program that pays off student loan debt for employees. With those agreements, you usually have an amount per year payoff (I.E., We pay off $30K, you give us three years of service, or pay us back the money, or something along those lines).

Very few employees leave you after they’ve been employed with an organization for three years. Three years is that tipping point where you decide you’re all in, or all out. So, your job as an HR leader is to get them past three years! Okay, every organization has their own tenure tipping point, but on average most are around three years. Go find yours!

One other item from the chart that sticks out like a sore thumb? No college degree means you’ll more than likely never own a home. That sucks! Guess what, we all have people in our organization without college degrees. These folks need our help with major financial situations, like buying a home, more than any of our employees.

We should be able to figure this out as well. What would stop an employer from offering home buying assistance, for years of service, to their employees? Nothing. But we don’t do it because we see ‘those’ employees as easily replaceable. So, why put in the extra effort?

Employees are our most valuable asset, well, unless, you know, you only make $15 per hour, then you’re just an asset, not really that valuable. Isn’t that what we’re really saying?

Long, story, short: Help your employees buy homes. You’ll never regret it.

 

Be Careful What You Incentivize! You Actually Might Get It!

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I’m fascinated in how we compensate and incentivize employees. Not the actual process, but the decision-making process behind the what and how we do it. In my experience, how this usually goes is a two-level process:

First Level: Someone has a hunch, or it’s being done this way somewhere else.

Second Level: Someone in compensation searches for data to justify the hunch or data that agrees with what you want to do.

Real scientific, huh!?

Let me give you a real-world example that most of us are familiar with. We have a prison problem in America. We can all agree on this, correct? Prison populations are exploding and continuing to grow at an alarming rate.

Popular ‘theory’ says the reason behind this are based on a few situations. First, the war on drugs has caused the increase in more inmates in prison. Seems fair, we definitely hate those drugs. Second, for-profit private prisons have turned prisons into a business and this keeps prisoners in longer than they need to be. Third, minimum sentences and three-strike policies have people in prison for life for minor crimes and drug offenses.

What if you were to find out none of this is actually true? That in fact, the real reason we have exploded our prison population over the past two decades is because of one simple incentive program. This is probably going to piss you off!  From The New Yorker:

“So what makes for the madness of American incarceration? If it isn’t crazy drug laws or outrageous sentences or profit-seeking prison keepers, what is it? Pfaff has a simple explanation: it’s prosecutors. They are political creatures, who get political rewards for locking people up and almost unlimited power to do it…between 1990 and 2007, while the crime rate began to fall, the number of line prosecutors went up by fifty percent, and the number of prisoners rose with it. That fact may explain the central paradox of mass incarceration: fewer crimes, more criminals; less wrongdoing to imprison people for, more people imprisoned….

Meanwhile, all the rewards for the prosecutor, at any level, are for making more prisoners. Since most prosecutors are elected, they might seem responsive to democratic discipline. In truth, they are so easily reëlected that a common path for a successful prosecutor is toward higher office. And the one thing that can cripple a prosecutor’s political ascent is a reputation, even if based on only a single case, for being too lenient. In short, our system has huge incentives for brutality, and no incentives at all for mercy.”

Go read the full piece in The New Yorker, it’s loaded with statistics to back up these real reasons for prison growth, and it’s an exceptional example of you actually get what you incentivize!

Many times we come up with incentive plans based on a short-term situation we want to change, but then years later those short-term incentive plans are still in place, and driving behaviors we never wanted or intended.

The other stat I loved from the article that we never hear in mainstream media or from our politicians is after the age of 40, most crime just stops. Basically, crime is young person’s game for the most part. If we were to release all prisoners at age 40, we would basically see no increase in the crime rate, but this will never happen. Why?

Because it only takes one. It takes one person getting out and committing another horrific crime and we all go, “See! It doesn’t work!” And, if it was someone I know, or god forbid my family, I’m probably right there with you. So, we lock up 7 Million Americans!

Be careful what behaviors you’re incentivizing, my friends, you actually just might get them!

In Human vs. Machine – You need some Machines on your team!

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The Spring SourceCon Conference recently took place in San Diego. If you don’t know what SourceCon is, it’s basically the one place in the world sourcing pros get together to share the secret sauce!

I’ve never been invited, but I hear it’s really awesome. (The “I’ve never been invited” is somewhat of an inside joke as I know I don’t have to be invited to attend if I want to go!)

SourceCon is your NOT normal talent acquisition, recruiting type conference. You just don’t show up and go to lame sessions, then go home. They’ve added a ton of hands-on learning, so when you go home, you actually got better for coming.

One thing the SourceCon folks do is also hold an annual contest called the Grandmaster Challenge. The competition pits anyone who’s interested against each other in a sourcing challenge to see who can solve the issues the fastest and most accurate.

This year the challenge was tabbed Man vs. Machine as SourceCon decided to pit sourcing technology against real-life sourcers to see who’s better. The technology chosen to compete against the humans was Brilent. Brilent is a candidate matching tool that works with your ATS (I wrote about them in May 2016 – I really like their tech!).

The basic challenge presented was this:

  1. Download a folder of three jobs: Ground Service Agent, Systems Administrator, and Product Manager. The jobs were real but altered from when they were originally posted.
  2. Download a trove of over 5,500 resumes.
  3. Search thousands of resumes and find the people who were hired, interviewed and sourced for the roles; by an undisclosed company.
  4. Points were given when the right resumes were found and classified correctly. (i.e. This person was hired. This individual was interviewed. Et cetera.) Points were also given if contestants found the right resume but categorized it incorrectly.

Brilent uploaded the resumes and did the analysis and returned the results in 3.2 seconds! Yes, that’s seconds with an “S”! The human participants took anywhere from 4-25 hours of research to produce their results.

The machine, Brilent, ended up getting third place because the platform got some of the candidates right, but not all. Humans took first and second, for finding virtually the same list, but a little more accurate.

For my money, the machine won by a landslide!

The reality is, we’re talking about sourcing and new hires. None of us really know who is actually going to be best performers once they’re hired, so I’m not even sure just because the humans were able to find the actual hires made, that those hires will even be any good!

In 3.2 freaking seconds, the machine gave me a really solid list to work from. Or I could have waited for hours, for almost the same list. Machine – 1, Humans – 0.

I just can’t even imagine this is a conversation about who really won here. We won. We won because we can now take a tedious skill of screening and get almost the same results in a fraction of the time. This allows us to have more capacity to increase talent pools, attract higher level talent, build a stronger brand, etc.

I love having great sourcing pros on my team, but I also need to get me a couple of those machines!

Body Language Matters in Recruiting Great Talent

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So, possibly the greatest basketball coach of all time is University of Connecticut’s Women’s Basketball coach, Geno Auriemma.  He currently has a 109 game winning streak in NCAA Division I basketball. Many of his current players have never lost a collegiate game!

You have no idea how unreal that streak is. It’s not like he can just recruit every top player, every year. He might get three or four of the best high school players, but other schools are also getting great talent.

Geno has something that only a tiny few great coaches have. Watch this short video to see it in action:

Couple things about this:

1. He says when he watches game film he watches what the kids on the bench are doing. If you’re at that level of detail, you’re going to be successful! I can guarantee you Nick Saban does the same thing. Tom Izzo does the same thing. Bill Belichick does the same thing.

2. If you’re interviewing for a job, the moment you pull into the parking lot, you better believe your actions are being evaluated, and almost 100% of those actions are body language!

If you hire an Eeyore, you’re going to get an Eeyore. Don’t think somehow they’ll change from the interview. If someone can’t have good body language in an interview, they’ll never have it coming to work and grinding each day.

Most of the jobs we hire for are basically skill-irrelevant. What we truly need is someone who comes to work each day with enthusiasm, is open to learning, has the ability to learn quickly, and plays well with others. I can teach you the rest. I can’t teach you to have great body language. That’s on you!

What if you could predict all of your Turnover? #UltiConnect @UltimateHCM

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Out at Ultimate Software’s Conference, this week and one of the cool features that Ultimate has within UltiPro is Retention Predictor. Ultimate has done a really good job at going out and buying some great data analytics companies and implementing that tech and talent into their organization.

So, what’s Retention Prediction? 

The concept is that if you analyze enough of your employee’s data points you’ll see trends that show if someone is highly likely to leave your organization as a voluntary term. As an organization, we really want and need to know data this to help retain our best performers.

UltiPro delivers a ‘score’ of each of your employees showing if someone is a flight risk based on their level of performance, so that you can filter, if you want, by high performers to low performers. The notion being, you definitely want to ‘save’ your high performers.

So, how do you save an employee that shows up as a High Risk? 

UltiPro will then deliver to the manager of the employee at risk specific “Leadership Actions”. These actions are recommendations of things the manager can do to help retain this employee. Currently, UltiPro has over 50 actions built into the system, and you can build in your own actions if you want for specific things you might want to do in your organization.

Does this really work? 

I spoke with multiple Ultimate Software customers who raved about how this one feature has literally changed their entire culture! One great example is Gregg Paulk, an executive at Anderson Center for Autism in New York.

Anderson had high turnover of their support staff, and also had an issue of lack of quality leadership training. Before they began using UltiPro’s Retention Predictor they had 30% turnover. In the two years since turning on the prediction feature, they’ve lowered their turnover to 15%! That’s giant! That’s real money that can now be used in other ways to better their organization and increase student care.

Anderson also saw higher engagement with their managers because they were now being able to deliver each manager specific actions to help them retain their staff, and ultimately help them become better managers of their team.

Paulk said one of the challenges in implementing anything like this is always the potential of false positives. One of your employees comes up a high flight risk, but in reality, they’re not. Yes, this can happen and will happen.

He said the key for them was to get their managers to understand how data prediction works. Yes, we’ll have a few false positives, but the majority of the data will be highly accurate and the percentage that is correct is so high, you can’t ignore what the predictions are telling your team.

What I really like about this feature is it puts HR into an immediate strategic position within the organization. It helps to make your entire team proactive and stop reacting to turnover as it happens. Your organization can finally become proactive in developing your team and leaders, which will naturally just help you drive a more dynamic culture.

What’s next? 

Ultimate Software is not just sitting on this, their data team is off the charts brilliant and they’re already working on their next generation product called “Perception” that will add in even more unstructured data into the algorithm and make these predictions more accurate, faster.

Check it out. I was super impressed by the accuaracy and real-life outcomes of this. It’s definitely a game changer for organizations.

3 Ways to Get Rid of an Overpaid, Underperforming Employee

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One of the biggest issues we face as HR Pros is trying to get rid of our overpriced employees.  Let’s be real, we made our own bed with this issue!  We were the ones going to our ‘comp’ guy, going “No, we have to go over the range, this talent is worth it!”  Now you’re living with an employee making $20K more than the rest of team and all hell is breaking loose!

To be fair, we aren’t the only ones who do this.  Pro sports are classic for overpaying talent.  You sign a player to what looks like a great deal, but by year 4 or 5 all of sudden you wonder how do we get rid of this stiff!

This happened recently with the NFL’s Houston Texan’s in the signing of Brock Osweiler. Osweiler played great for a few games with the Denver Bronco’s behind an injured Peyton Manning, and when Osweiler became a free agent the Texan’s offered him a four-year, $72 million dollar contract.

He then fell to earth and showed his short success in Denver wasn’t a trend as he performed way below average and the Texan’s were forced to trade him to Cleveland in hopes of salvaging anything from this bad signing.

Let’s assume your overpaid employee isn’t horrible but has become just average.  Sound familiar?

How do you get rid of an overpaid, high priced, average employee?  I’ve got a few ideas:

1. Buy Out/Severance/Job Elimination – These aren’t all the same but these can be used to help you with this issue. For those HR Pros who have never used these options, you’re missing out.  Let’s be clear, it costs money but it also gives you legal protection and gets rid of a problem very quickly. Don’t blow this option off, you would be shocked at what amounts of money an employee would accept to go away.  Start low in your negotiations! Make sure you work with legal to get the right paperwork drawn up to protect yourself against future litigation!

(I’ve been able to get middle management levels folks to go away for $25K!  A huge positive impact with the team, productivity, engagement, etc.  Best $25K I’ve ever spent)

2. Put them in a box – Most of our leadership teams suck at accountability. To get rid of an overpaid person you need to turn up the accountability to an uncomfortable level. This usually pushes them out the door. You can’t let off the gas with this tactic. You really have to follow up on the accountability until the person bails.  This can be painful and loud, and usually isn’t the cleanest way to get rid of person. If they’re smart, they’ll know exactly what you’re doing and could cause further problems then your overpay issue! Ironically, most HR Pros use this technique, over all else.

3. The Breakup Conversation – I’ve also had some good success having the breakup conversation.  Face-to-face, nothing in writing, close the door and just get ‘real’.  “Tim, we need to talk. You’re making $20K more than the next highest person on the team, and you’re not delivering that level of compensation.  We’ve got to do something. That could be you leaving in some form, or what do you think?”

I’ve been amazed what my overpaid workers have come up with in terms of possible solutions.  I’ve had people retire after these conversations. They’ve put themselves into a tighter box than I ever would have created. They even offered up taking a pay cut because they love the company and the job and realize ‘we’ made an error and it’s become a problem.  I’ll be honest, in my career pay cuts rarely work out so be cautious using them, but breakup conversations can lead you to a solution!

Working from Home is One Big Lie!

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Right now every single one of your employees is saying they would prefer to work from home! You’re doing everything you can to add work-at-home options to as many roles as possible, because this is the single hottest trend in workplaces, and it’s the only way you can attract talent to your organization.

By the way, it’s a big lie!

Actually, you have a very small percentage of employees who are saying they want to work from home, but they’re very loud and vocal, so it sounds like everyone. You also have a very small number of roles within your company that can be effective as a work-at-home role, based on a number of issues specific to your organization and your roles.

When you do the math of a small number of people who actually want to work at home and the small number of roles you have that could do this, you don’t have a real problem. You have a made up problem.

How do I know this?

Because most work-at-home people are actually choosing to ‘rent’ shared outside-the-home workspace. Organizations like WeWork and Factory are exploding in the co-working space. These are shared workspaces for the startup generation types, who are mostly working as individual contributors but want to be around other people who are also working.

In every mid-sized to large-sized city, you can find coworking organizations who are offering space. Why? Because this is what people want. They actually get motivated to be around other people who are working.

Working at home in your underwear sounds great until you get beyond the vacation phase.  At first, working from home seems like this great idea. All the freedom to work when you want, with little distraction, and ultimate flexibility. What most people find is this ultimate ‘freedom’ is something they are not very good at.

Working at home is one GIANT distraction. Oh, I should throw that load of laundry in. Hey, who’s driving down my street? Why does my neighbor wear Crocs outside to get the paper? I should make a good lunch today, then go for a run. Is that laundry done? Okay, Rocky, I’ll let you outside again, but I can’t play right now, I need to work!

Everyone believes they can work from home. 100% of people. About 2% of people are actually effective at working from home. What you find is 98% of people have almost zero self-insight into themselves. Being in a structured work environment actually, helps them be more productive, get things done, and meet the needs of the role you’re paying them to do.

Work-at-home and being flexible are two very different things. Being flexible means allowing an employee to add in some personal stuff that needs to get done during the day, knowing they’ll meet their work obligations without issue. Don’t confuse these two things. Being ‘flexible’ with your employees doesn’t mean you need to go full work-at-home mode.

What you’ll find is the employees will love it, you’re managers will hate it, and less work actually gets done.

Now, wait for the comments, because the work-at-home set lose their minds on posts like this! Why? Because they’re working from home and have time to read blogs about how they shouldn’t be working at home!

Free Frozen Yogurt is Always a Great Union Buster!

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If you’ve read any of my posts over the past five years you know I really don’t think too highly of unions. Unions today, especially the UAW, are basically in bed with major corporations, doing almost nothing for the members that pay their dues and keep them in business. Which is why I loved Elon Musk’s response when the UAW came knocking on Tesla’s door.

The Tesla CEO also lambasted the efforts of the United Auto Workers union to unionize Tesla employees at the company’s factory in Fremont, California, calling the organization’s tactics for doing so “disingenuous or outright false.” Musk alleged that the UAW’s “true allegiance is to the giant car companies, where the money they take from employees in dues is vastly more than they could ever make from Tesla.”…

Musk’s email includes a point-by-point rebuttal of a number of Moran’s claims. Regarding long hours, Musk said overtime has actually decreased by 50% in the last year, and that the average employee worked 43 hours a week. Regarding compensation, he noted that Tesla factory workers earn equity, and therefore, over a four-year period, earned “between $70,000 and $100,000 more in total compensation than the employees at other US auto companies.” On issues of safety, Musk said Tesla’s incident rate is less than half the industry average, and noted that the goal is to be “as close to zero injuries as possible.”

“There will also be little things that come along like free frozen yogurt stands scattered around the factory and my personal favorite: a Tesla electric pod car roller coaster (with an optional loop the loop route, of course!) that will allow fast and fun travel throughout our Fremont campus, dipping in and out of the factory and connecting all the parking lots,” Musk wrote. “It’s going to get crazy good.”

Don’t underestimate the power of free frozen yogurt and roller coaster rides through the factory!

Unions prey on your employees who are disgruntled. We all have them and there’s really nothing you can do about it. What you can do is continue to provide great communications to your employees about what being union-free means to them as workers, and what it doesn’t mean.

Unions lose their power the more your workers are actually educated. When they know the facts (not the alternate facts!) about what truly happens in today’s world when a union takes over a plant. This isn’t the 1940s. Most organizations today, and for sure Tesla, are competing for the best talent against their competition. This forces them to be competitive with wages, benefits and even frozen yogurt.

Where most of us fail in leadership, and this is traditionally how most organizations worked to remain union-free, was you became Fight Club! The first rule in being union-free, is to not talk about being union-free, especially with employees! This actually puts you a catch up role and you look behind the eight ball when unions come knocking.

All of sudden they have the upper hand, because you allowed them to talk about unions with your employees first, so your employees are naturally going to believe them over you. If this isn’t a big deal, why weren’t you talking to us about it?!

I think most employees today get that voting a union in your shop isn’t all rainbows and butterflies. You have to have a really bad work environment for anything to substantially change. What most workers today see when a union is voted in is the immediate payment of dues, and not much more!

Would You Hire Magic Johnson?

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(this is Magic and I at a recent MSU basketball game)

You might not have paid attention to this because you’re not a sports geek, more specifically an NBA sports geek, but the Los Angeles Lakers just hired their most famous player ever, Magic Johnson, to be their President of Basketball Operations.

If you know anything about me you’ll know this:

  1. I’m a Sparty, which means I LOVE Magic. When I was 9 years old my parents let me stay up and watch him lead MSU to the National Championship. I followed him to the pros and watched him win championships with the Lakers. I think he’s pretty neat!
  2. My dream job is to be the head coach of the Los Angeles Lakers. I make this known widely. They’ve never called.

So, you would have expected I would be super happy that the Lakers went and put Magic in charge of the whole show! But, I’m not. I believe it’s a major mistake on their part. Here’s why:

– Running an NBA team is a really difficult job, that takes specific skills you only receive by coming up through an NBA organization.

– The time commitment to running an NBA team is off the charts.

– The travel commitment to running an NBA team is unbelievable.

Magic, for all of this wonderful qualities, doesn’t seem to possess any of these skills sets needed. He’s an ultra-successful business owner and an all-time great NBA player, who is well respected. He’s also on the back side of his business career, ultra-wealthy, and more than likely unwilling to travel all over the world evaluating players in small, smoke-filled gyms across Eastern Europe.

My hope is Magic, will do magic stuff for the Lakers. He’ll surround himself with the best minds in the game. The greatest data nerds who can find hidden gems. He’ll watch the Moneyball movie and understand he can’t do this on gut instinct and his unbelievable charm. Because that won’t work. Most really great basketball players, put in this position, fail.

We do this in corporations all over the world. We hire the best ‘basketball player’ for a role that has very little to do with playing basketball, and then we are shocked when the ‘basketball player’ fails in a position of not playing basketball! We do this constantly in corporations! High performance in one position does not guarantee high performance in another non-related position.

High performance in one position does not guarantee high performance in another non-related position. I think we could all agree on this concept. Yet, we equate great performance in ‘mechanical engineering’ with the potential to be a great ‘manager’ of mechanical engineers. We somehow think those two things are similar. Mechanical engineering and Managing people. They’re in fact, very different things.

I would hire Magic Johnson for a lot of positions, but running my NBA team is very high on that list. Yes, he’s the greatest employee our organization has ever had. Yes, he knows basketball and played at an unbelievable level. No, he’s probably not the best hire to run this team. But the Magic fan in me hopes he kills it!

Moneyball Rules: Offering More Experienced Workers Less Money!

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For years I’ve been trying to get people to understand this Moneyball concept as it relates to hiring, but few really listen. I know you saw the movie, Moneyball, where a major league baseball general manager finds success by signing and drafting ‘undervalued’ players. The players are undervalued for a number of reasons, it doesn’t matter, what matters he was able to get talent on at a discount rate!

Don’t you want to hire employees at a discount rate!?

Hired.com recently came out with a survey that once again demonstrates the most undervalued talent in any market are older workers, 50 years old and up. Apparently, once you become 50 years old, you start becoming worthless! Don’t kill the messenger, “you” are the ones saying this:

Basically, our average salary offer increases every single year of age. It makes sense because as you age, you gain more experience, more experience is more valuable. Or is it?

The chart, also, shows that once a worker turns 50 years old or so, employers (but not you…) start offering those workers less money, even though they have more experience!

Why!?

This has nothing to with wages! This is pure age bias shown towards younger workers. We believe, even older hiring managers, that once someone gets to a certain age, and Hired.com shows us that age to be 50 years old, older workers start losing their effectiveness even as they gain experience.

Somehow, in our minds, that 35-year-old, with three screaming kids and soccer practice four nights a week, is more effective than the 50-year-old with no kids at home, who is willing to work wherever and whenever you need them.

So, now you can play Moneyball!

You already know that most employers in the world hate old people. Thus, there are tons of gray hairs limping around out there willing to take all of your crappy low-ball offers, and they’re probably more loyal for those low wages then any younger worker you have on staff.

Yeah, for capitalism! You get great talent at low rates. Who needs H1B’s when we have old people!

“Well, Tim, it’s not about age bias! It’s about fit and culture and inclusi… I mean, we hire the best available candidate for the job!”

I’m sure you do.

Your reality is as hiring gets tighter, you can continue to overpay for younger talent with less experience, or you can pay a cheaper wage for more experience. Sooner or later, someone is going to ask the right questions. Are you going to have the right answer?