Politically Incorrect Post of the Week: Pay Inequality Persists!

Pay inequality persists? Well, that’s not politically incorrect!

What if I told you, gender wage gaps persist even in markets where workplace discrimination is impossible or unlikely?!

Whatcha you talkin about, Tim!?

Female Uber Drivers make 7% less than male drivers, even though, none of us even know if a male or female driver will pick us up. The algorithm specifically doesn’t allow us to request or know. So, how can Uber Drivers have a gender pay inequality issue?

Okay, so here’s where this might become a bit politically incorrect for those who want to make it that and ignore facts. Turns out, Men, more than women, drive faster, so they will make more on average driving for Uber than women. Also, Men are more likely to on request for rides in more congested, riskier areas, which tend to carry higher fares.

You can call it pay inequality. Some will call it a performance difference, in this particular position, in this particular profession.

One more example, Amazon’s Mechanical Turk, a gig worker site, which also only measures users performance and does not measure gender, also shows gender pay inequality across it’s users to the tune of 10.5%! Amazon’s Mechanical Turk pays men 10.5% more than women for the same work, even though they have no idea the person doing the work is a man, woman, non-binary gender, etc.

So, what gives!? Again, it comes back to performance. Researchers found:

“For 22,271 Mechanical Turk workers who participated in nearly 5 million tasks, we analyze hourly earnings by gender, controlling for key covariates which have been shown previously to lead to differential pay for men and women. On average, women’s hourly earnings were 10.5% lower than men’s. Several factors contributed to the gender pay gap, including the tendency for women to select tasks that have a lower advertised hourly pay. This study provides evidence that gender pay gaps can arise despite the absence of overt discrimination, labor segregation, and inflexible work arrangements, even after experience, education, and other human capital factors are controlled for. Findings highlight the need to examine other possible causes of the gender pay gap.”

Okay, don’t shoot the messenger! I’m only reporting the news!

Funny thing is, the authors (both male and female) of this Northwestern University study also were very concerned about people thinking they were being politically incorrect, actually making a plea within the published paper telling people they weren’t being politically incorrect!

Here’s the problem with all of this. Men can and will do certain jobs, on average, better than women. Women can and will do certain jobs, on average, better than men. I haven’t seen a study on non-binary genders, yet, but I can guess that Non-binary genders can and will do certain jobs, on average, better than both men and women!

This is why we have to be very careful when looking at gender pay inequality data at a macro-level. Of course, we have gender pay issues. But throwing out macro numbers does not help solve the problem. As leaders and HR professionals it’s our job to find the specific pay issues we have and correct those.

We love to believe, especially in our overly charged social climate we are in currently, that there are always bad actors at play when things like this happen. That’s not always the case, and we (the collective we) lose credibility when we make things like gender pay inequality a macro issue to leaders and executives who don’t have those issues or have them in very narrow categories which they were unaware.

Let’s find the inequalities. Let’s discover the reason for these inequalities. Then, let’s make things right that need to be made right. Right now, we have a lot of righting to do, but my hope is that won’t always be the case. So, assume positive intent, first, and let’s make our world better for everyone.

How many fans do you have?

You’ve probably heard of the idea of 1,000 True Fans. Seth Godin gets a lot of credit for the idea, but he’s quick to point out he got it from Kevin Kelly over a decade ago.

True Fans are those people who really believe in you and your work. They make it a point to consume your content. If you’re close to them they’ll make a point of coming to see you. Most people don’t have any fans. Think about your normal employee working their average job. They do good, solid work, but no one is going out of their way to hear what they have to say.

Kelly’s idea about 1,000 True Fans is this:

“A true fan is defined as a fan that will buy anything you produce. These diehard fans will drive 200 miles to see you sing; they will buy the hardback and paperback and audible versions of your book; they will purchase your next figurine sight unseen; they will pay for the “best-of” DVD version of your free youtube channel; they will come to your chef’s table once a month. If you have roughly a thousand of true fans like this (also known as super fans), you can make a living — if you are content to make a living but not a fortune.

Here’s how the math works. You need to meet two criteria. First, you have to create enough each year that you can earn, on average, $100 profit from each true fan. That is easier to do in some arts and businesses than others, but it is a good creative challenge in every area because it is always easier and better to give your existing customers more, than it is to find new fans.

Second, you must have a direct relationship with your fans. That is, they must pay you directly. You get to keep all of their support, unlike the small percent of their fees you might get from a music label, publisher, studio, retailer, or other intermediate. If you keep the full $100 of each true fan, then you need only 1,000 of them to earn $100,000 per year. That’s a living for most folks.”

That’s a very good living for 99.9% of the world’s population. I could live comfortably in the U.S. on $100,000. Maybe not NYC, or San Francisco, but most places $100K gives me a wonderful life.

I wrote a book, The Talent Fix. I’ve written every day on this blog for over eight years. I’ve been blogging in the HR and Talent space for a decade. I know I have some True Fans. I don’t think I have 1,000, although I’ve sold way over 1,000 books. I think I would be comfortable saying I’ve got 100 True Fans.

Some might read that and think, well that’s not very much, but I would disagree! Think about your own life. Who are your “True Fans”. If you said tomorrow you’ll be on stage in your hometown talking about whatever and it costs $25 to see you, how many people are showing up? Now take that number and take away your parents, your spouse, your kids, etc. Now, how many are showing up?

100 is a good number. I’m working to get to 200, then 300, and maybe one day I’ll have 1,000 True Fans of my work. That would be very awesome!

My best True Fan story is that my wife jokingly calls me a “Micro-celebrity” saying there’s really only a couple dozen HR and Talent Pros in the world who know who you are. One day we were going on a trip and we were walking through Detroit Metro Airport. The new terminal is giant, a mile long.

So, we are standing in the middle of the terminal as people are rushing by to catch flights. We are discussing where we should grab a bite to eat before we get on a long flight and a guy walks by me. He stops and turns and says, “Hey, you’re Tim Sackett!” I said, I am, and started up the conversation around how he would know me, etc.

Turns out, he’s a ‘fan’ (his words, not mine), he reads my blog every day. Just happen to be making a connection in Detroit, he was a Talent Pro from the east coast. What a small world! As he walked away I could feel my wife staring at me, knowing she wouldn’t be able to fit my head into the plane! I mean, when your wife calls you a micro-celebrity and then you get noticed in an airport, well…

That how it all starts, one true fan who will notice you in an airport and show your wife you’re completely a micro-celebrity!

So, what does this have to do with anything? 

You don’t need to boil the ocean. You don’t need to recruit every candidate. You don’t need to have everyone see your employment brand. You need to start with one, then two, then three. That’s doable, you can do that, I can do that! Trying to do that with everyone, that seems impossible!

Here’s how to fall in love with your job!

Do you know what it felt like the last time you fell in love?

I mean real love?

The kind of love where you talk 42 times per day, in between text and Facebook messages, and feel physical pain from being apart? Ok, maybe for some it’s been a while and you didn’t have the texts or Facebook!  But, you remember those times when you really didn’t think about anything else or even imagine not seeing the other person the next day, hell, the next hour. Falling “in” love is one of the best parts of love, it doesn’t last that long and you never get it back.

I hear people all the time say “I love my job” and I never use to pay much attention, in fact, I’ve said it myself.  The reality is, I don’t love my job. I mean I like it a whole lot, but I love my wife, I love my kids, I love Diet Mt. Dew at 7 am on a Monday morning. The important things in life!  But my job?  I’m not sure about that one.  As an HR Pro, I’m supposed to work to get my employees to “love” their jobs.  Love.

Let me go all Dr. Phil on you for a second. Do you know why most relationships fail? No, it’s not cheating. No, it’s not the drugs and/or alcohol. No, it’s not money. No, it’s not that he stops caring. No, it’s not your parents. Ok, stop it. I’ll just tell you!

Relationships fail because expectations aren’t met.  Which seems logical knowing what we know about how people fall in love, and lose their minds.  Once that calms down – the real work begins.  So, if you expect love to be the love of the first 4-6 months of a relationship you’re going to be disappointed a whole bunch over and over.

Jobs aren’t much different.

You get a new job and it’s usually really good!  People listen to your opinion. You seem smarter. Hell, you seem better looking (primarily because people are sick of looking at their older co-workers). Everything seems better in a new job.  Then you have your 1 year anniversary and you come to find out you’re just like the other idiots you’re working with.

This is when falling in love with your job really begins. When you know about all the stuff the company hid in the closet. The past employees they think are better and smarter than you, the good old days when they made more money, etc.  Now, is when you have to put some work into making it work.

I see people all the time moving around to different employers and never seeming to be satisfied.  They’re searching. Not for a better job, or a better company. They’re searching for that feeling that will last.  But it never will, not without them working for it.

The best love has to be worked for. Passion is easy and fleeting. Love is hard to sustain and has to be worked, but can last forever.

That 20 Minute Phone Screen is a Candidate’s Most Important Moment of the Week!

A lot of folks are currently out of job and looking for work. Not many jobs open. Too many candidates lead to a lot of rejections, black holes, no feedback, and very few “interviews”.

You and I (TA Leaders and Pros) don’t consider a twenty-minute phone screen to be an interview. Candidates definitely believe it’s an interview. They prepare for your phone screen at the same level they prepare for an in-person interview with the hiring manager. First impressions and all.

Here’s the problem, that twenty-minute phone screen, one of many you will have during the week, isn’t even in your top 25 most important things you’ll be doing this week. So, how do we address this variance in importance with how the candidate will ultimately view your employment brand, you, your hiring manager, and the job?

That’s a tricky question.

I think the first thing we need to do in talent acquisition is simply to recognize this reality. We are going to be talking with scheduled candidates about who we are, who they are, and what we have, and this is extremely important to them, especially for those out of job. To have some empathy and understanding of the situation. To provide something of value, even as we look to gain some value of information ourselves.

It’s a powerful thing to know you’ll be talking with a number of people in a week, all of whom this could be their most important conversation of the week, month, year. That we (all recruiters) have a major impact on this event in their lives. We can create an amazing experience, or we can do something less than amazing.

I have this naive belief that all of us humans actually want to do things that make other people happy and satisfied. Isn’t that a great little fuzzy, cute world I live in!?! If we knew we had the power to make someone’s life just a little better, we would use that power for good. That if given the choice to make someone’s day brighter, we would always make the right choice.

Well, we do.

Do Good. Be Kind. As Chris Kurtz would say.

This week, as you go out into the world and phone screen your brands out. Try and make someone’s week. You are worth it. They are worth it.

Influencers or Analysts? Who has the most impact on your brand?

The worlds of Influencers and Analysts have never collied more than they are right now in the HR industry. Most of this has to do with the popularity of Influencer Marketing that has taken off in the past decade, and like most things in HR, we are now just catching up with the marketing trend.

Traditionally, in the HR space, companies selling products, technology, and services only really cared about two things: 1. What do our clients think of us, and 2? What do the “Analysts” think of us?

What’s an Analyst? 

Every industry has them. These are basically individuals who work for organizations like Deloitte, Gartner, Forrester Research, IDC, and hundreds of boutique firms specializing in specific parts of the HR ecosystem. The individuals spend a great deal of time understanding the landscape of a specific function in HR, the technology, the processes, what works, and what doesn’t, etc. Then your organization pays its organization a great deal of money for this expert knowledge.

The hope is, using this expert Analyst knowledge will ultimately help you save time, money, and missteps because you’ve hired a firm of experts to help you make the right decisions. Many of these experts have never actually worked a day in HR, but hold MBAs and such. Some of these people are some of the smartest people I’ve ever met, and if you listened to them, they could truly help you. Some are idiots working for a big firm.

Examples of Analyst I admire: William Tincup, Madeline Laurano, Trish McFarlane, George LaRocque, Ben Eubanks, Kyle Lagunas, John Sumser, Holger Mueller, Jason Cerrato, Josh Bersin, Sarah Brennanetc. 

This will then beg the question of well, then, what’s an Influencer? 

Influencer marketing has been around for a hundred years, but Kim Kardashian is the queen of modern-day influencers. I’m famous! You see me talking about or using this product. You buy this product. That’s really the backbone of influencer marketing. I mean Kimmy D would never steer you wrong, would she?

An Influencer is anyone in an industry that a measurable amount of people are listening to, which will influence their buying behavior. I write a blog post on some products that I’m using in my own shop. It’s super awesome! You go out, look at it, and decide to buy it and use it with your team. You’ve been influenced.

Most of the influencers in the HR industry are current or former practitioners, they’ve lived your life. Some are super smart and have the resume to back it up. Some are complete idiots. Any idiot can have a blog (I’m a great example!). Most influencers, like an analyst, have a specialty, something they’re better at than other stuff. Some influence full time, but most hold down ‘real’ jobs to pay the bills. So, they probably don’t have the time to deep dive into the industry, as you’ll see with analysts.

Examples of Influencers I admire: Kris Dunn, Dawn Burke, Carmen Hudson, Robin Schooling, Jason LauritsenLaurie Ruettimann, Jennifer McClure, Sharlyn Lauby, Steve Browne, Sabrina Baker, Joey Price, Mary Faulkner, Jessica Miller Merrell, Janine Truitt-Dennis, etc. (there’s really too many to name!)

Many of these people are HR Famous! They have worked hard to create an audience who for the most part listens to what they have to say.

You also have people that fall into this strange middle ground of Influencer-Analysts types that have no name. Maybe they started out as an influencer, then became an Analyst, or maybe they were an Analyst who became popular and started influencing. Examples in this camp are folks like: Josh Bersin, Jason Averbook, Sarah Brennen, Trish McFarlane, Ben Eubanks, etc.

(BTW – All of these people you should connect to! )

So, who has the most impact on your Brand? Influencers or Analysts? 

This is not an easy question to answer because like almost anything it depends on a lot! We all know of a certain product we love and regardless of the influence or what some expert is telling us, we will just buy it because we love it!

We also have an untold number of products and services we buy because someone we trust told us about it, and because we trust them, we go buy it.

If you’re a large enterprise-level product or service, basically selling to companies that have more than 5,000 employees, you better make nice with the Analyst community! They tend to have the ear of more enterprise buyers then you’ll typically see from influencers. I doubt very highly the CHRO of Google is reading this blog! (but I know the CPO of GM is!)

What I see is companies selling to enterprises usually work with both Analysts and Influencers. They want to ensure their message is heard across the buying community, so they don’t miss out on a potential buyer, and they have the money to do both.

Companies selling to under 5,000 employees and it starts to get a little harder to determine the impact of Analysts. I mean how many HR and Talent shops in Small to Medium-sized businesses have the money to pay for Analysts Research? Not many! If you run an HR shop of a 1500 person company, you do not have $50,000 to hear what the best ATS is! The ATS you buy won’t even cost $50K!

Behind the scenes, most analysts understand their biggest impact on the enterprise buyer, and because that’s where the money is, that’s exactly where they want to be! If you have buyers across small, medium, large, and enterprise markets, it then becomes a more difficult decision on how you use Influencer marketing.

The real answer to the question above is you engage with the analyst and influencers that have the most positive impact on selling your product. Unfortunately, most organizations have little or no idea if either side is having an impact on selling their stuff.

Who has the juice? 

I call someone who has ‘real’ influence as having the “juice”. If you have the ‘juice’ you have the ability to influence real buying decisions on a regular basis. Laurie Ruettimann tells you to go out and buy this new great HR product, and that organization will see a measurable sales increase directly tied to the links in her posts. She’s got juice!

I wrote about an HR Tech company a few months ago after a demo and a month later they sent me a bottle of gin because they landed a six-figure deal directly from my mentioning them in a post. That’s gin and juice! 😉

Most people who call themselves influencers in the HR space have little or no juice. Usually, because they just don’t have a large enough, sustained audience who is listening. They might be 100% correct in their recommendations and insight, but not enough people are listening to move the buying needle.

I love what the folks are doing over at Advos because they are actually showing organizations who have the juice and who doesn’t. I can tell you I have the juice and say I’m the #1 Influencer in the HR marketplace, but the reality is, anyone can say that! HRMarketer is actually giving data behind those words to let people know where the real juice is.

The truth around all of the analyst vs. influencer chatter is that you’ll find people in both groups who can help you and people in both groups who are complete idiots and have no value. The best thing to do is build a relationship with both, find out who moves your needle and aligns with the messaging you’re trying to get out, and then measure. Eventually, you’ll find the right mix that will work for your organization.

How Perfect is your Perfect Hire?

There’s a concept known as the “Perfect Premium”. Basically, we over evaluate the value of “perfect” versus almost perfect. What do I mean?

Let me give an example that we are all familiar with, standardized college admission testing, ACT/SAT. A perfect ACT score is 36. If someone scores a 36 on the ACT, they’ll get a full ride, academic scholarship to some college.

If someone gets a 35 on their ACT test, one point lower than perfect, they might get a full-ride scholarship to a college, but that is no guarantee. We assume 35 is that much lower than a 36. Now, what about comparing an ACT score of 35 to a score of 34? Well, in that case, we assume those two scores a virtually the same! Smart, but not perfect!

We do this with employment assessments as well.

We assume the person who scores the highest on the test is the best one, and the people who scored less are really that close. Let’s say you have an assessment that scores 0 to 100. You have three candidates that score 100, 94, and 91. We will almost always assume that the 100 is by far the better hire than the 94 or 91.

If you tell your hiring manager they can’t have the 100 score because that person dropped out for some reason, they won’t really care if you choose the 94 or 91. To them, those are the same, but that 100! She was the magical unicorn!

We exaggerate the distance between the perfect and the near-perfect by an exponential amount from those who near-perfect to almost near-perfect. 

Why does this matter?

Because the reality is, those who are perfect, and those who are near-perfect, are virtually the same when it comes to potential performance. Whether you hire the perfect scoring candidate or the one who is near perfect, you are basically getting the same person, but your mind will lie to tell you and tell you that you’re not!

Your perfect hire might actually be perfect! But, your near-perfect hire might also be perfect!

Also, for those thinking, “Tim probably just got 35 on this ACT and now he’s trying to make us believe he’s as smart as the kids who got 36!” Ha! you’re wrong! I got a 32, and I’m still way smarter than those try-hards who got 36! Or am I…

3 Ways You Can Extend the Work Lifecycle of Older Employees

One of the biggest biases we have as leaders is ageism. If you’re 35 years old and running a department and you are looking to fill a position on your team that will be your righthand person, the last thing you’re looking for is a 55-year-old to fill that spot! That’s just me being real for a second.

You and I both know that 35-year-old hiring manager is looking for a 25 – 28 year old to fill that spot

That’s mainly because at 35 you’re still basically stupid. I was. You were. We think 35ish is the pinnacle of all knowledge, but it’s really when we just start learning for real.

So, we have this core issue to deal with in workplaces right now. Our leaders are mostly Millennial and GenX, and Millennials are increasing into these roles at a rapid rate. Because of the Boomers leaving in large amounts, there aren’t enough talented young workers to replace the knowledge gap that is being left. So, we are left grappling with what we think we want (youth) with what really needs (experience!).

A recent study at the University of Minnesota found that employers need to add programs to focus on older workers:

The study argued that programs aimed at training workers won’t be enough to satisfy the state’s need for workers between 2020 and 2030. New policy directives and incentives may be needed, including offering pathways for baby boomers to delay retirement, drawing in workers from other states and supporting immigration from other countries

“There’s all this focus on workforce development, but none of it is guided to older workers,” said Mary Jo Schifsky, whose business, GenSync, advocates for meaningful career pathways for older adults and who helped initiate the study for the Board on Aging with the U’s Humphrey School of Public Affairs. “We need career pathways for older workers just as much as we do for younger workers.”
 
In the U survey, managers ranked baby boomers high on loyalty, professionalism, engagement, and their commitment to producing quality work.
Employers need to find ways to extend the Work-Life Cycle of the older employees that work for them until the workforce, technology, and retraining programs can catch up to fill the void. Most employers are only focused on programs that are looking at younger workers.
So, what can you do as an employer to extend the life cycle of your older employees?
1.  Have real conversations with older employees about what they want. Most employers shy away from having the ‘retirement’ conversation with older employees because they think it’s embarrassing or illegal. It’s not. It’s a major reality of workforce planning. “Hey, Mary, Happy 55th Birthday, let’s talk about your future!” Oh, you want to work 18 more years! Nice! Let’s talk about a career path!
I can’t tell you how often I’ve heard a hiring manager say, “I don’t want to hire him because he’s 59 and is going to hire soon.” Well, I spoke to him and he wants to work until he’s 70 (11 years) and our average employee tenure is 4.7 years. I think we’re good!
2. Stop, Stop, Stop, believing that all you can do is hire full and part-time FTEs into roles. If Mary, my 63-year-old financial analyst wants to give me five more years of work, but only wants to work three days per week, in role ‘traditionally’ we’ve only had a full-timer, I’m taking Mary for three days! HR owes it to our organizations and hiring manager to push them out of the box when it comes to schedules and how we have always filled positions. 3 days of Mary is probably worth 3 weeks of an entry-level analyst in the same role!
We do this to ourselves. I hear it constantly from hiring managers, “HR won’t allow me to do that.” Why? Have you asked? No, but HR doesn’t allow us to do anything. We need to come to our hiring managers with solutions and let them see we are open to doing whatever it takes to help the organization meet its people’s needs.
3. Develop programs and benefits specifically designed to retain older employees. I work with a plant manager who developed an entire engineering internship program around having his retired engineers come back and work three days a week with interns and paid them ‘on-call’ wages for the days they weren’t there, so interns could call them with questions at any time. These retired engineers loved it! They could come to do some real work, help out, and still have a great balance.
It went so well, he kept some on all year, on-call, and partnered them with younger engineers who needed the same support and assistance from time to time. The on-call rate was pretty inexpensive, the support and knowledge they got in return, was invaluable.
It all comes down to flexibility on our part as employers to extend the life cycle of our older employees. We no longer have this choice where we can just throw our older employees away and think we can easily replace them. We can’t! There physically isn’t anyone there!
This is about using each other’s strengths. Younger leaders will be stretched and we need to help them stretch. We need to help older employees understand their roles. In the end, we need to find a way where we can all see each other for the strengths we bring to the table, not the opportunities.
It’s our job as HR professionals to work on how we can extend the life cycle of each of our employees.

When is the time to work hard?

“Never! Work smarter not harder!”

Shut it. I wasn’t talking to you idiot.

I tend to try and surround myself with people who are “hard” workers. Who sees stuff that needs to be done and they just do it. In fact, they can’t even turn themselves off if they wanted to. Maybe all the work that you, or I, or they do isn’t “hard”, however, you define hard work, but it’s work and it needs to get done.

Every successful person I know is a hard worker.

Being a hard worker doesn’t mean you almost always work more than everyone else, but when work needs to get done, they get it done. But, don’t discount time and success, most successful people work more and harder than none successful people. It’s super rare to find a lazy successful person.

At what point in your life should you work the hardest? 

No, it’s not all the time, unless you’re young, then yes, when you are young you should be working hard all the time! That is the time to build the foundation. That is the time you have the most energy. That is the time when you have the least to lose.

The time in your life when you should be working the hardest is when you are young. 18-35 years of age, should be a work fest, followed by brief interludes of some trips and stuff.

I often get into conversations with young people who want to retire young, be super successful, but they have yet to work 50 hours in a full week in their life! They should be working 80-100 hours per week. This is the time you can work that amount and make it count.

But girls (and boys) just want to have fun, Tim!

Yeah, you know what’s not fun? Being a greeter at a mass retail store at 68 years old because you can’t pay your rent. The world is a young person’s game because you are fun. You have the time, the energy, you as nice looking as you’ll ever be, you have the fresh young person smell, all of the world wants more of you!

To be successful you must work hard. Part of that success comes from working hard all the time when you are young. As you age and gain experience, you begin to find out when exactly you need to turn it on and when you can shut it down for a bit. If you’re young and you think you already know when to shut it down, you’re a moron, or at the very least you are only getting to a fraction of the success that you are capable of.

If you just graduated high school or college this month, it’s not the time for a break, your life is just beginning. Right now, today is the exact time you should be working hardest and you should be doing it all the time!

 

Are Low Deductible Health Insurance Plans Really the Best Plan?

It seems like right now so many folks are paying attention to their actual health insurance for the first time! Turns out, when people are dying in a pandemic, we will finally pay attention to what kind of health insurance we have from our employer.

There are basically a few kinds of plans that most folks have in the U.S.:

– Low deductible plan – you pay more upfront, but if you get sick you pay very little in terms of bills overall.

– High deductible plan – you pay less out of your check on a weekly basis, but when you get sick you will end up paying a much larger portion of the bill.

– HSA plan – this plan is less used because it’s confusing but basically it’s a combination of you paying a portion to a savings account which helps you pay for normal healthcare expenses, but also has a high deductible safety net in case something major happens to you, you won’t go broke.

Most people have a bias towards low deductible health plans. Low deductible plans are chosen the most because we fear that what rarely happens. So, we pay a ton of money to have great healthcare coverage, but most of us will never come close to using the coverage we have. Few chose high deductible because we are scared something might happen and we don’t have the money to pay for it. Even fewer chose HSAs, even though it might be the better overall option, but again, we really fear the cost of something bad happens.

This is the basis of almost all insurance, fear.

We almost always choose the most coverage we can get, even when it costs us more in the short-term and long-term. We love safety. We are also, for the most part, really stupid when it comes to math and more specifically statistics. If we did understand basic statistics we would always choose the high deductible plan and put the weekly difference into a conservative investment portfolio. After a decade or two or three we would have this giant mountain of cash, at least about 99.6% of us would!

Fear is a powerful drug.

We buy car insurance and are given options like $250, $500, or $1000 deductible in case we get into an accident. Most of us will choose the lower amounts even those the vast majority of drivers never get into an accident. We buy flood insurance for our houses even when we aren’t in a flood plain because the one hundred year flood plain is a mile away from our house.

So, why am I talking about healthcare deductibles?

We are moving into a high unemployment environment. People are also going to be short on cash, so there’s a good chance when your next open enrollment happens you’ll have more people who will choose a high deductible, cheaper plans. In HR, this pains us greatly, because we want everyone to have the “best” insurance possible.

Why does HR want this? Because we deal with the fallout when someone chooses the high deductible insurance and then something happens and all of sudden it becomes ‘our’ problem to help this employee. So, to not have this pressure, just push everyone to a low deductible.

I’m telling you this is bad advice. HR is giving bad advice. Safe advice, but bad advice, based on math. Real math, not HR math.

 

If You Are Efficient You’re Doing it the Wrong Way!

I read this interview with Jerry Seinfeld recently and I wanted to share a piece from it below:

A few thoughts on this…

  1. You know I’m all about efficiency when the process calls for being efficient, like in recruiting. When you start talking about being creative, like Jerry is above, that’s when you have to throw efficiency out the window. Genius doesn’t have a timeline. Sometimes working smarter not harder isn’t the right answer.
  2. “Who’s McKinsey? Are they funny? Then, no I don’t need them.” Too often we ask for help from folks who don’t know what we do or how to do it, but they have an MBA from an Ivy League school so they must be smarter than us, right? Right!? Well, they might be smarter at somethings, but you know your business and you probably know what needs to be done. The question is do you have the courage to do it or are you using a consulting firm because you want someone to share the blame?
  3. “The show was successful because I micromanaged it.” When I speak to really successful entrepreneurs almost all are successful because they micromanage the crap out of every aspect of their company. We like to act like this is a bad trait because it can be destructive, but most of the great leaders find ways to micromanage and still treat people really great. It’s not one or the either, it’s both.

 

I love reading and listening to really successful people talk about why they are successful when they aren’t trying to be impressive. When you get the real stuff. I think this was some real stuff from Jerry.