The Future of HR, again.

2014 will be the year Retention returns to HR.

Retention almost died during the great recession.  For almost 10 years HR pros were able to roam the halls of their organization and almost never had to worry about the issue of retention.  There weren’t many jobs.  Most people in times of hardship, hunker down and don’t move.  It was like a perfect retention storm! There are HR Pros who graduated out of HR programs, started their careers in the past 5 years, that have never known a time when retaining your employees was the number one priority!

That is about to change.

This year Retention of Employees will once again become a major issue that HR will be looked at to solve.   Here are some important things to remember when you begin to look at ways to retain your employees:

1. “It’s really easy to do.” That is what your executives think, so you’re in trouble.

2. You will get blamed for high turnover.  Buy a helmet, life sucks that way.

3. You will blame your crappy managers that you haven’t given any management training to in at least 5-7 years.

4. You will tell at least half the people in your organization – “We don’t have a retention problem, we have a compensation problem.” You’ll be partially right, but won’t have the competitive data to back it up, so you’ll come across a a whiny victim.

5. You’ll make at least one info-graphic trying to explain ‘Retention vs. Turnover’ to your executives.  It will fail.

6. At least one executive will come up with the brilliant idea of ‘Retention Bonuses’ and think $1,000 at the end of a year will stop people from wanting to leave your organization.  Everyone who stays throughout the year will get a $1,000 bonus but won’t know why they got it.

7. To combat your inability to retain employees, you’ll blame recruiting for not being able to find talent.  This will work until your head of recruiting gets fired and the new head of recruiting comes in and says this one line – “The best recruit is the employee we don’t have to replace.” Again, retention will be on your desk.

8. Employees don’t leave companies, they leave managers. Instead of recruiting, you now pass off your problem to the training department.  Managers will now be forced to go through soft skills leadership classes. You buy yourself 6 more months of retention not being your problem.

9. You’ll buy a ‘new’ assessment that claims to increase retention by picking the right people to begin with.  You’ll never really find out if this worked or not, because you’ve been changing so many things no one will really know.  But the HR vendor will take credit and you’ll start in their white paper and get asked to speak at their annual conference!

10. Retention will still be an issue in 2015, but by then you’ll turn everything you’ve done, and your 7% increase into retention, into a new position with a new company in town who has a worst problem than your old company. See #1 for your plan with the new company.

My Favorite HR Mistake

I’ve made more mistakes in my HR career than I care to even remember – I could probably write a book!

It’s funny to think about your mistakes, because I think invariably every person takes those mistakes and tries to turn them into some type of “learning”.   It’s a classic interview question – so, Mr. Sackett, tell me about your biggest mistake in career and what did you learn from it?   I even have asked it myself when interviewing others.   Just once I want someone to answer: “well, besides coming to this lame interview, I’d have to say drinking my way through college, getting average grades, and having to take positions within HR probably is my biggest.  What I’ve learned is that all those kids in band, in high school, on the debate team, really were smarter than me, and my ability to be third team all-conference point guard, in hindsight, probably didn’t get me into the career I was hoping for.”

But it never happens – no one is really honest about their mistakes – because in making most mistakes you do something stupid – something so stupid, you’d would rather not share it with anyone.  So, we come up with answers like – “my biggest mistake was working to hard on a project with my last employer, and not getting others involved, and I’ve learned while you can get the project done and on time by yourself, you really need to include everyone.” Vomit. And somehow has HR pros we accept this answer and move onto the next question, almost like that question was just a test – a test to see if you were stupid enough to actually tell us, and brighten up our day!

But, I’ve got one – I do have a favorite and two friends of mind recently made me think about it.  My favorite HR mistake – Telling someone to go after a promotion and  more money, leaving a position they truly enjoyed.  When I started my career right out of college, I gave myself 12 years to become a Vice President.  Seemed like a logical goal at the time – but in hindsight seems obviously stupid now.  It took me 16 years, and only after I realized it no longer mattered did I reach that level.  My two friends both recently had opportunities to leave organizations and positions they really liked – I gave them both the same advice – you can’t even come close to measuring the value of truly liking the job you have – you just can’t.  So, answer me this one question: Do you love what you are doing, and who you are doing it for? If it’s yes, stay put.  It’s that simple, that was my learning.  I’ve left two positions in my life where I loved what I was doing, and loved the organizations – both to take promotional opportunities with other companies.  Both times I made the wrong decision. Tough mistake to make twice

I use to give out this advice to people – go ahead and leave – you’re going to have 10+ jobs in your life, might as well move up as fast as you can.  I don’t do that any longer – in fact I spend time now trying to talk people out of taking new jobs – which I know is ironic since at my core I’m a recruiter! I think we all hope we learn over time from our mistakes.  Once in a while I actually do!

$43/hr Fast Food Worker!

There is this new, hip burger joint in Detroit metro called Moo Cluck Moo (alright, it’s a SmashBurger knock-off) which is becoming famous for paying it’s workers a minimum of $15/hr.  Okay, it’s not $43/hr, but the title was to prove a point and ask a question.  If you haven’t eaten at one of these new burger joints – they’re great! I mean great if you love a great burger, fries and shake and a ‘fast food’ meal bill of $50 for a family of four!  BTW – the sweet potato fries at SmashBurger will be on my death row menu.

How much should a fast food worker be paid?

Is $15/hr really a living wage?

$15/hr equates to about $30,000 before taxes.  Take out taxes,  health insurance co-pays, etc., and for arguments sake, let’s say that $30,000 is now $22,000.  $22,000 is fairly realistic, right?

So, $22,000 is about $1800 per month.  Let’s break down the expenses:

Crappy Apartment – $600/month

Crappy car payment – $250/month

Crappy car gas – $200/month

Crappy car insurance – $100/month

iPhone 5 – $100/month (you know this is true!)

Crappy Apartment utilities (electric, gas, cable) – $150/month

Food (other then your fast food meals you get while working) – $300/month

That’s $1700.  Let’s say we’ll leave the extra $100 for emergencies.

Is this living?

Now, let’s look at it from McDowell’s standpoint.  Unlike their ‘fast food’ friends at Moo Cluck Moo – which average check for a family of four is north of $40.  The average check for a family of four to eat at McDowell’s is probably closer to $25.  That extra $15 per check – does a lot.  It definitely makes it easier to pay $15/hr.

My point isn’t that we should be paying fast food workers more.  Someone choosing a career in the Fast food arts shouldn’t expect to make a ‘living wage’, they should expect to make a wage you can’t live on.  I love that Moo Cluck Moo is pushing the envelop in paying service workers and showing others that it can be done, on a small scale.  Can McDowell’s do it?  They could.  Are you willing to pay $15-20 more per meal for your family to eat at McDowell’s?  No, you’re not.  You will at Moo Cluck Moo – because it’s cool and hip and good.  But you can’t do that all the time.  It’s not sustainable on your living wage as a teacher, or accountant.  So, you sometimes have to go the cheaper route and eat at McDowell’s.

Simple economics will tell us that selling $.99 Double Cheeseburgers does not allow you to pay your hourly staff $15/hr and stay in business.  Charge $5 for that Double Cheeseburger and you can now pay $15/hr wages.  You will also have a drastic decrease in customers, so you’ll have to layoff most of your staff.  But those who remain will certainly be happy making $15/hr!

You can’t have it Fast — Good — and Cheap.  You must give up something.  Want McDowell’s to pay their workers a ‘living wage’?  Show them you won’t go away in droves when they double their prices.  You won’t do that.  If you won’t change — why should they change?

 

 

Opportunity, Looks A Lot Like Work

In a world where everyone is completely insane over our celebrity culture – I can buy into this message from Chris Kutcher at the Teen Choice Awards:

Great message for the pre-teens who were probably watching this live – but also for the millions who now watching on YouTube.  As a father, I find it hard every day to find great message and role models for my sons.  I’m not saying I want my kids to look up to Ashton Kutcher, but hearing him say that it’s cool to be smart, that its cool to work, well, I can buy into that.

Last week I wrote a post on the only 3 career paths that are available for new graduates are: College, Military or Prison.  I forgot two:

1. The Lotto (Which is really the last great American Dream! And yes, I do consider ‘Lotto’ a career path! Just look at how many people play it hoping to make it their career!)

2. Work

What I mean by ‘Work’ is actually working one of those ‘crappy’ jobs that politicians and the media keep putting down as not ‘real’ jobs.  Those ‘crappy’ jobs (sales, service, etc.) are actually real jobs — if you make them real jobs.  Yeah, you won’t make much, but like Kanye said “He got ambition baby look in his eyes. This week he mopping floors, next week it’s the fries.”  Those crappy jobs, worked by someone with passion and dedication, can turn into something really good.  Maybe not in 1 year or even two years, but eventually they do.   I’ve worked and had a W2 job since the day I turned 16.  I’m not the smartest, I’m not the sexiest, but I go to work — everyday.

Top HR Lies

In the never ending quest to beat a blog series to death, let’s hope this is my last installment of “Top Lies” (Top Candidate Lies, Top Recruiter Lies).

At this point I’ve completely pissed off ‘candidates’, made some fun of Recruiters, so now it’s time to really have some fun with the easiest target of all  — HR!  For the most part my peers in HR have fairly thick skin.  HR is actually use to being made the joke in the professional world.  The only profession that gets made fun of worse is probably lawyers!  I could do an entire post on why HR lacks respect, but that has been done a thousand times and in reality having respect in HR isn’t a professional dilemma, it’s a personal one!  If you’re in HR and don’t have respect in your organization, don’t blame the HR profession, you need to look in the mirror!

All that being said, HR might be the king of the liars in your organization!  Let’s break down a few of Top HR Lies:

“In HR we are here for ‘our’ Employees!”  — HR is not an employee advocate.  HR supports the organization’s leadership and mission.  BTW – many HR Pros don’t even get this concept! When push comes to shove, HR will always support that way leadership wants to go, not the way employees want to go.

“You can tell HR, we are always confidential!” — No we’re not! HR has an obligation to look out for the best interest of the organization, not you.  If you tell HR something ‘confidentially’, there is a very good chance that information will be shared with others in the organization.  The reality.  HR has to mitigate the risk of the organization.  Your craziness has risk to it.

“We had no idea layoffs were coming…” —  Sorry, but we did.  But we just can’t tell you that and create panic throughout the organization.  So, we lie. It sucks, but there isn’t any other way.

“No, you can’t change your health benefits until next Open Enrollment, it’s the law!”  — Yeah, that’s kind of a lie as well!  There are laws governing when we ‘have’ to allow you to change your benefits (marriage, child being born, divorce, etc.), but HR can decide to change the plan rules and allow you to change if we wanted. But, that becomes a logistical nightmare!  Even with keeping our plan rules intact, we can still get around it.  Let’s say you are a young employee and chose the crappy low-cost catastrophic major medical plan that basically covers nothing, but you’re young and nothing will ever happen to you. Then, something does happen to you.  You come to HR. HR says, “We told you so! Sorry, you have to wait until next Open Enrollment, have fun with that cancer!”  HR could actually fire you on a Friday, hire you back on Monday and have you sign up for the ‘new’ insurance.  Based on your plan there could be some audit risk based on IRS code, section 125 – so check it out before you go do this. But, it’s not like you’re doing this all the time – this is maybe once a year for a desperate situation – I’ll take that risk (and have) to help my employee in this situation!

– “We fire people!”  — HR has never fired anyone, ever.  Managers of of employees fire people.  HR just supports that decision, and frequently influences a manager to make that decision, but we don’t pull the trigger.  Managers blame HR — “HR is telling me I have to do this”, but that’s a lie as well.  HR advises of the consequences if certain actions aren’t taken. Ultimately, leaders make the final decision on what is actually going to happen.

“Top performers get rewarded!” — Actually, in most organizations even average performers get rewarded….and low performers.  We have a compensation plan and don’t want to leave anyone out. So, you can be great and get a 3% raise. Your cube mate could be a slug and get a 1% raise.  How does that feel?

–  “We treat everyone equally!” — The reality is we treat certain employees better and give them more leeway to screw up, because they are more valuable to the organization.  Not all employees are create equal.  That was just something that sounded good on the poster for the break room.   Some employees are actually substantially more valuable to the organization than you are.  We treat them differently.

“We value diversity and inclusion!” — We actually really don’t give a crap about this.  It gets shoved down our throats, legally, organizationally, etc. What we really care about is filling positions with solid talent.  But leadership makes me provide a report that counts the color of faces, so now we have to care.  So we care about the number of faces, not the true sense of diversity.  Don’t hate the players, hate the game.

Alright HR Pros – What Lies Did I Forget?

 

 

Employees, Smoking = Less Money

Smokers will hate to hear this, but if you smoke, you’re more likely to make less money.

Really?

Really.

From CNBC

“In a new paper, Federal Reserve Bank of Atlanta economists Julie Hotchkiss and Melinda Pitts found that smokers only earn about 80 percent of what nonsmokers earn. People who used to smoke and quit more than a year earlier, though, earn 7 percent more than people who never lit up in the first place.

The PSA advice that “one cigarette is one too many” apparently is true at work. Hotchkiss and Pitts found that the earnings of both a weekend social smoker and a pack-a-day puffer suffer a similar wage gap.

“It is simply the fact that someone smokes that matters in the labor market, not the level of intensity,” they wrote. “Even one cigarette per day is enough to trigger the smoking wage gap.”

That truly sucks, because those of you who know me, know I love hanging out with smokers!  Smokers are the backbone of your informal office communication network.  Smokers come in all shapes and sizes, from all levels of your organization.  It’s nothing on any given day to see a senior executive and some rank and file employee, standing outside enjoying a smoke and some small talk.  Many times strong relationships are formed outside in the ‘smokers area’, and it is very common for information to be shared that normally wouldn’t be amongst employees of different ranks.  I don’t smoke – but I love going out and hanging with smokers!

So, as you can imagine, this news from the Federal Reserve Bank of Atlanta (and why does Atlanta have their own Federal Reserve?!) was extremely disheartening to me.  I wonder what else Julie and Melinda have been digging into down there in Atlanta?  Do employees who drink Gin make more than all other employees? (please let this be true!) What about the office slut? Does he/she make more money, at work?  If so, did they name that ‘the slut wage gap’?  Do our tax dollars support this ‘research’?

Here is what I know, compensation pro wannabes, if slice and dice the data enough, you can make up any conclusion you want to.  The reality is, smoking equates mostly to lower education, thus lower wages.  That’s a broad stroke, but fairly accurate.  Educated people, for the most part, understand that smoking is bad for you.  Having that knowledge, and being educated, tends then to lead to a non-smoking life.  Having lower education, and knowing smoking is bad for you, tends to lead to a life of ‘what the hell, I’m going to die anyway’.  Some educated folks fall into this same trap.

So, I’ll ask you my smoking friends – if you knew you could make more money, would you stop smoking?  Also, if you never smoked, are you willing to pick it up for a 7% bump in pay?!

Smoke’em if you’ve gotten them in the comments…

 

The Cost of Bad Hires

If there is one constant in HR and Recruiting – it is the fact that no one will ever agree on how much a bad hire costs an organization!  Never!  It doesn’t matter how much time you put into coming up with some algorithm, how much research to back up your numbers – it’s still going to be 90% subjective/soft numbers at best.  This is the main reason executives in our organizations think the majority of HR/Talent Pros in the world don’t get business!   We come to them with stuff like this:

“We need to reduce turnover because of Engineer who leaves us, costs the company $7,345,876.23!”

Then you go through a 73 slide PowerPoint deck showing how you came up with the calculations all the way down the parking meter expense during the interview, and when you’re done – no one believes you’re even close to an actual number.

The gang over at National Business Research Institute put together a pretty good infographic proving my point – take a look:

NBRI - The Cost of a Bad Hire Infographic

97%+ of the ‘lost’ cost is from “Training” and “Productivity Loss” – those are very subjective measures in almost all organizations.  What that says is – ‘Oh, Jimmy isn’t working out – fire him – and because he wasn’t working out we lost ‘X’ percent of productivity over any other possible replacement (which in itself is a whole other leap)’.  And, we lost 100% of training we put into Jimmy because he is now not here.  Which again is subjective, since most training isn’t one-on-one, and resources used to train are almost always not used just on one person, etc.

So, here’s a better way to figure out the cost of a bad hire:

1. Ask your head of finance or accounting what they think it costs? “Ballpark it for me?”  $10K? Sounds great! We’ll use $10K.

2. Use $10K as your cost of bad hires.

Your reality – HR’s Reality – is it really doesn’t matter what the number is – only that the powers that be in your organization all agree on the number. Stop wasting your time trying to come up with a better number – just come up with a number that those signing the check agree is probably legit.

 

People As Revenue Drivers

Is everyone in your company valuable?

Your CEO will say “Yes” publicly, but privately we all know the deal – some employees are more valuable than others.  That’s life, that’s why we all don’t make the same salary.  Some skills are more valuable than others.

Do you measure the value of your employees in terms of revenue?

Most companies don’t.  Why?  It puts too much reality in the face of your employees.  It’s like drunk uncle Charlie at Christmas, no one talks about him, but everyone is keenly aware how many he’s had and when it’s time to start cutting him off.

What would happen in your company if you put together an algorithm to measure value in revenue and compensated your employees based on who are the ‘true’ revenue drivers of your company?

Hard question to answer.  You would probably see a number of things. You’d see none sales executives making a hell of a lot less, that’s for sure!  You would see individuals who had a direct impact to driving revenue be in a much higher influential position within your organization.  You would see HR begin to support areas they are not supporting right now, or not supporting as much as they should!  Like?  Like, sales training and motivation.  Like, a performance management system that didn’t lack accountability and movement out of low performers. Like, compensation models that weren’t designed to keep the masses ‘satisfied’.  Just to name a few.

I’ve seen companies begin to look at these numbers. Simply, they’ll take their total revenue divided by headcount to really just have some numbers to start playing with, when positions are filled in a timely basis.  If we can assume, in a perfect world, that ‘all’ employees have an impact to revenue, that means every single day you have an open position within your organization, at every level, you are losing revenue.  Talent Acquisition/HR is losing the company money because it can’t keep up with turnover or growth.  That’s very simplified, but the reality we face.

Too few Talent and HR Pros don’t view their jobs in that context – ‘loss of revenue’.  They have excuses reasons why they can’t fill those positions – the list is endless.  When I see organizations with hundreds and thousands of open jobs – I start calculating in my mind the millions of dollars their failed HR shops are costing their companies and stakeholders.  It’s a very sobering way to look at the HR function – # of Open Positions * Days = Loss of Revenue.  If you can come up with that number – it makes the business case to upgrade your HR shop extremely easy.  If you can’t come up with that number – I wonder how many positions you are hiring that don’t drive revenue and costing your company in unneeded expense?

I wonder how much revenue you are costing your organization, today?

Profiling Needy

Last week I wrote a post about how money can buy happiness – and decided to do a ‘Pay-It-Forward’ exercise with my team – this is from that original post:

“Tomorrow morning I’m handing each one of my employees a $100 bill and asking them to go out into the world at some point their day and give it away – randomly – or not randomly – to someone other than themselves.  $100 isn’t a giant amount for my staff – but I’m sure it will have a big meaning to someone else – I think some of the people on my team will feel good about helping someone out – about surprising them and making their day/week/month.   My hope is they’ll come back with a smile and a story.  My hope is they’ll feel a little better about their day.  My hope is they’ll feel happy.  My hope is – money can buy happiness.”

So, this went down – a stack of $100 bills and we all went off to find who we thought needed that $100 the most.  First, I want to share some learning from this activity:

  • I gave very few rules – one was that they had to ‘give’ the money away that day, by midnight – almost everyone wished they had more time.
  • Apparently when you go to give out money – you do a lot of stalking! You want to make sure the receiver deserves it so you follow them around for like 10 minutes which tells you all you need to know about a person!
  • When given the chance to help – it’s hard to find someone to help! In any random day you see all kinds of people to help – someone hands you cash and says ‘Go Help’ and they all disappear…or do they!?  It seems when you actually have the resources to help – you do more ‘Profiling’ and become much more selective about who is actually needy! I say this with all positive intent – my team wanted to help out the ‘most’ deserving person – and you find out it’s hard to tell degrees of deserving apart!
  • In this exercise many on my team set very high expectations for the event of giving – reality is you probably don’t change someone’s life with $100 – but you surprise a lot of people!
  • Some people on the receiving end – are very cynical! (We actually had people say: “So, what do I have to do for this”; “Do I have to fill out a survey”; “What church are you from”, etc.  Just take the damn money! I was trying to be nice!  Others are very gracious.
  • You can find out a ton about what is important to your team, by listening to how and what they wanted to help others!

The Stories:

We had plenty of hugs, some crying, some cheers and a whole bunch of smiles!   We had people help out animals, babies, old people, young people, poor people, families, teens, schools, bartenders, servers and entrepreneurs.  I had one team member who wanted to share our experience and asked the person he gave his $100 to keep $25 and pass the rest on with the same instructions – 4 total people getting a nice smile in their day.  I had many team members stalk local grocery stores wanting to help others pay for their groceries – to make their week a little easier  – these stories were the funniest hearing how they stalked the aisles and ‘profiled’ the neediness of the individuals.   We heard from teammates who seemed to have a hard time giving the money away at every turn – some people, it would seem, are to proud to accept a simple gift of help (not something you see everyday in today’s world).

One big learning my team took away from this was that quite possibly – it would have been more rewarding if it was their own personal money – and not the companies money (I said I be willing to take it out of their check! 😉 ) But many decided the experience was so rewarding they wanted to do it on their own – and share the experience with their families – the Pay It Forward principle at it’s best.

I think I learned the most – about myself.  In the end I gave my money to a young Latino who had just started up his own business.  It’s tough to start a business in any climate – to be a young minority in Michigan, it might be even harder.  He captured my heart – his will, his enthusiasm, his naive confidence that it could only be successful!  I went looking to help someone who couldn’t help themselves and found myself supporting someone who decided, against all odds, to help himself.  I was drawn to support that.  I’m not sure what that says about me – but the experience made me ‘happy’ and made me feel a connection to my community that I didn’t feel before.  I’ll do this again.  Like my teammates at work – I’ll use my own money – I’ll involve my kids – I’ll try to hear more stories.

The money invested in this was the best investment in my company that I’ve made in a very long time.  Please steal this idea – it doesn’t have to be $100 bills – it can be $5, $10, whatever – you’ll be better for it!

 

 

Your Greed Stops You From Having a 4 Day Work Week

Back in 1930, renowned economist John Maynard Keynes predicted technological advancements would mean we would all eventually work just 15 hours a week. That same year, evolutionary biologist Julian Huxley predicted the two-day work week. Both men warned that someday, we would have so much leisure time, we would be bored out of our minds.”

Can you imagine that? 15 hours per week! Bored out of your mind!

What the hell happened?!

According to a recent article in CNN/Money – we all got really greedy!

“These great thinkers were right about one thing. Technological progress has made workers more productive than ever before.

Yet rather than cutting the work week gradually over time (like the Europeans did), productivity gains have fueled a consumerism boom in the United States. So instead of taking time off, Americans are just buying much more stuff.

Benjamin Hunnicutt, a historian at the University of Iowa, calls the shorter workweek the forgotten American dream.”

In most cases, fewer hours mean workers might have to take a pay cut, and would not be able to buy as much. But in exchange, they’ll get more free time, save on child care costs and likely be healthier and happier in general.

For example, Dutch workers are on par with American workers in terms of productivity per hour. They pay higher taxes and earn less than Americans. But on average, they work roughly 11 weeks less than their American counterparts each year, have access to government-funded health care, pay little or nothing for a college education, and have far more leisure time than the American.

When UNICEF recently ranked 21 industrialized nations by well-being for children, Netherlands was on top and the United States was near the bottom, in 20th place.Guess who also ranked happier with life overall? The Dutch worker.But Americans still labor on.

“The idea that we can grow our economies forever and ensure everyone a full-time job is a myth,” Hunnicutt said. “We have to deliberately choose to work less and therefore buy less.”

So, are you willing to go with less, so you can work less?  I think most people would say – “No.”  I see it far to often, especially in the boom or bust economy of Michigan’s Auto Industry, when times are great and overtime is being worked by all – you see the new cars, the summer cottages being bought, etc.  People work more, to accumulate more, with the thinking at some point they’ll be able to stop and enjoy it all.  Then one day you look up and realize, you have to keep working to keep all that you’ve accumulated.  Consumerism is a bitch!

I wonder what life would be like if I had less.  A number of years ago my family relocated and we were between houses and staying in corporate apartment – all we had was our cars and some clothes.  My wife and I look back at how easy of a life that was!  No yard to mow, no house to constantly take care of, no keeping up with the Jones.  We took the kids to parks, we did more as a family, we were never happier, and we had less.  There’s something to say for less…