If You Pay Women More They’ll Work Harder Than Men! (It’s Science!)

A new study out from Harvard (so you know it’s legit and sh*t!) on what is the real payoff on paying employees more. It the age-old question, right? We can’t find great talent, so we say, “well, if we paid more we could find more talent”. Not quite “great talent” but more talent.

But, that really isn’t even the question this is answering. This is about what about our own employees and if we paid them more, would they work harder?

So, will employees work harder for more money? 

The study looked at mass retail and warehouse workers and found that a $1 increase in pay would on average, overall employees, give back the company $1,10 in extra productivity. Not great, but in very big organizations, an extra $.10 per hour in productivity could be significant, but there were other findings I found more fascinating:

1. Women, on average, will actually work harder for more pay than men! 

2. It’s super hard to pre-select those employees, or candidates, who will actually be more productive with the additional pay.

In fact, “women’s productivity responds more and their turnover responds less to wage changes than men’s, which can lead to occupational pay gaps”. Meaning, less pay doesn’t have the same impact on women as it does men. Men are more likely to turnover when they feel they aren’t being compensated fairly.

The other side of this study that is fascinating from a compensation perspective is something we all kind of know, but never like to admit to – we actually kind of suck at selection and determining who will be a great performer from a poor performer. Interviews, especially in no-skill, low-skill jobs, are basically worthless.

You might have a better chance of being a pay leader and only hiring women. At least you’ll give yourself a better chance the ladies will work harder for that money!

I think what this really speaks to is class pay for performance. Our need to make sure we are paying those employees, who perform the best, more than those employees who do not perform the best. We struggle with this. “Well, Tim, they are all classified “Warehouse Associates 1″ if we paid them differently there would be chaos!”

I get it. It’s not easy, but being great is never easy. Do you really think what you are doing now is really working great?

I think we have the ability in retail, dining, warehouse, manufacturing, do compensation testing where we try some of these philosophies and ideas. What would happen if we developed great productivity measures, and then we really compensated our best performers more. Not twenty-five cents more, but significantly more than their peers who are average or below average on those same metrics?

Might you have some turnover of weaker players? Yep. Is that a bad thing? Maybe, most likely not, if you’re prepared with a funnel of potential new hires. Becoming great at HR is about challenging what we are doing now, so we can become better than we are for the future.

Now, go take care of those ladies who are working harder than your dudes!

Does Your Average Employee Tenure Matter? (New Data!)

I keep getting told by folks who tend to know way more than me that employees ‘today’ don’t care about staying at a company long term. “Tim you just don’t get it, the younger workforce just wants to spend one to three years at a job than leave for something new and different.” You’re right! I don’t get it.

BLS recently released survey data showing that the average employee tenure is sitting around 4.1 years.  Which speaks to my smart friends who love to keep replacing talent. I still don’t buy this fact as meaning people don’t want long term employment with one organization.

Here’s what I know about high tenured individuals:

1. People who stay long term with a company tend to make more money over their careers.

2. People who stay long term with a company tend to reach the highest level of promotion.

3. People who tend to stay long term with a company tend to have higher career satisfaction.

I don’t have a survey on this. I have twenty years of working in the trenches of HR and witnessing this firsthand. The new CEO hire from outside the company gets all the press, but it actually rarely happens. Most companies promote from within because they have trust in the performance of a long-term, dedicated employee, over an unknown from the outside. Most organizations pick the known over the unknown.

I still believe tenure matters a great deal to the leadership of most organizations.  I believe that a younger workforce still wants to find a great company where they can build a career, but we keep telling them that is unrealistic in today’s world.

Career ADHD is something we’ve made up to help us explain to our executives why we can no longer retain our employees.  Retention is hard work. It has a real, lasting impact on the health and well-being of a company. There are real academic studies that show the organizations with the highest tenure, outperform those organizations with lower tenure.  (here, here, and here)

Employee tenure is important and it matters a great deal to the success of your organization. If you’re telling yourself and your leadership that it doesn’t, that it’s just ‘kids’ today, we can’t do anything about it, you’re doing your organization a disservice. You can do something about it. Employee retention, at all levels, should be the number 1, 2, and 3 top priorities of your HR shop.

Does Your Hiring Process Have Diversification Bias? (Diversifi-what!?!)

One of the really great things that have happened in 2020 is the giant spotlight D&I has gotten in organizations, especially around hiring a more diverse workforce. Obviously, organizations have been working on this for a while, but with limited success.

What researchers are discovering is that many organizations might have “Diversification Bias” in their hiring process. What is Diversification Bias?

Diversification bias describes the tendency to choose more variety—to diversify—when making a simultaneous decision, and to choose less variety when making the same decisions sequentially.

For the non-technical definition, we tend to hire more diversity when we hire a bunch of people at one time, verse when we hire one person every once in a while.

This actually then gives a really good explanation around why so many organizations struggle to increase their diversity hiring because most of us don’t hire a bunch of people all at once. Most organizations have one opening for let’s say an Accountant. When that hiring manager goes to hire, they’ll most likely hire someone who is similar to them.

Now, if that same hiring manager was going to hire 3 Accountants, they are forced to look at that panel of hires and they’ll notice that everyone looks the same, thus increasing the chances they’ll offer positions to a more diverse set of candidates. I’m not saying that our traditional way of hiring is appropriate, in fact, it’s just another form of bias, it’s just a researched explanation of why this is happening.

How can we hire a more diverse and inclusive workforce? 

Let’s be honest for SMB organizations this will be difficult because you’ll never really have the headcount numbers to do any type of mass hiring, so SMBs have to have a special focus on each hire and why each decision is being made, if they want to move the needle. For larger organizations here are some tips:

1. Understand your turn over data by position and require hiring managers to hire in multiples verse one hire at a time.

2. Ensure you have a diverse and inclusive interview panel where every person on the panel has an equal vote.

3. Understand your market demographics by position and make the organization aware of where you are falling short. Great you increased your D&I hiring by 18%, but if it’s mostly in an area where you already had great diversity, you really haven’t done anything to solve your problem. Also, if your market demographics tell you that there are 15% diversity candidates in a certain segment, and you are meeting or exceeding that number, executives should know your successes. I find often executives will say, “well we need to be at 30%” without knowing what that really means for the skills you’re hiring.

Awareness and focus solve a lot of issues.

Here’s the reality. Some of your hiring managers believe that hiring a D&I candidate is a risk. They believe that a diversity hire won’t perform as well. Is that bad? Hell, yes! But it’s also reality. So, when they hire one person at a time, they are less willing to take a “risk”, in their eyes, on a diverse candidate. Again, that’s their Diversification Bias, among others, showing up.

We fight this battle on multiple fronts. We address biased hiring manager behavior when we know it’s happening, but we can also address it by changing our own processes and making it easier for hiring managers to make the right decisions.

The more you know.

OMG! Did you guys hear what Kris did!?! #Yikes!

Gawd! We love gossip!

I’m personally on five text groups, a few Messenger groups, a couple of IG groups, and a number of email chains that all act like some strange modern version of a watercooler in the breakroom at work. Or the back smoke break patio at the office. Pick your pleasure.

Cultural anthropology sees gossip as an informal way of enforcing group norms. It is effective in small groups. But gossip is not the search for truth. It is a search for approval by attacking the perceived flaws of others…As a social enforcement mechanism, gossip does not scale. Large societies need other enforcement mechanisms: government, religion, written codes.”

Think about how gossip can help organizations perform better.

If I’m new to a department, gossip quickly lets me know the group norms that are expected and tolerated. If I want to be viewed as a good performer I will follow the group norms and gossip is the vehicle for letting me know what those norms will be.

If I’m a “good” gossip, I skilled at finding and sharing information amongst my team they find valuable, I’ll quickly increase my status within the department. I have to be careful as lies and false gossip can quickly bring me down in status.

The problem with gossip, historically, is in didn’t scale well. I might have some juicy gossip but how am I going to effectively share that across an entire organization? But, now with social media, the internet, smartphones, email, Teams/Slack, Zoom, etc., we can easily spread gossip, both good and bad.

So, why am I talking about gossip? 

I will tell you leaders and HR spend more time trying to stop gossip within the organization than almost anything. I’m wondering if we are actually doing ourselves a disservice. What if we used gossip to drive great engagement? What would that look like?

The key to great gossip is “we” all want to be in on a secret. 

We want gossip that we believe almost no one else has. To use gossip to enforce organizational norms (gossip at scale) we can’t just go out and start launching secrets into the world. There has to be a plan!

The problem with trying to lead with gossip is it can lead to chaos. If we believe the social/group norm is to communicate via gossip, that is a very fine line to try and navigate successfully, knowing it’s hard to know what gossip to believe or not believe.

I think we can use the psychology behind our desire for gossip, though, to drive some great outcomes within our organizations.

What happens if you’re in a small meeting, let’s say, five people. The CEO is one of those people and she has something amazing to tell everyone, BUT, the four of us will have to keep this secret. We can’t tell anyone!

We all leave the meeting. I’ve got my #1 right-hand person on my team. I’ve got to pull them in, this is too important, this has too big of an impact on our department not to let my #1 know! So, I trust them (like the CEO trusted me) to not tell anyone else. What happens?

  1. They are over the moon that I trusted them enough to bring them in on the secret. (High Engagement – High Loyalty)
  2. I put myself in a really bad position if the CEO finds out.
  3. I start working with the CEO to let us work on a comms plan to let others know that need to know. (basically to cover my ass for already letting the secret out into the wild!)

Welcome to Organizational Behavior 101, kids!

Every leader has “gossip”. Stuff they know that their team doesn’t know. Some of that is secret. Some of that is just stuff they found about before everyone else, for an undetermined amount of time.

I find that leaders who can use the positive “safe” gossip for informing their team tend to have extremely high team engagement. “Hey, team, we need to pull it in close for a five-minute huddle, I’ve got something really important I need to share with you. But, first, you have to understand, this is NOT public information! We can’t allow this to be shared.”

I just wrote that, and I’m sitting here wanting to know what comes next! Gossip is a powerful tool, that can just as easily make your career as break your career!

As leaders, it’s our job to ensure the group norms we allow are ones where the good gossip, the sharing of information that helps us all increase our knowledge and power are encouraged, while the bad gossip is shut down immediately. All gossip is not bad, but it’s all-powerful in terms of possible outcomes.

 

Should You Tell An Employee You Consider Them High-Potential? #HiPo

The Wall Street Journal had an article saying that only 28% of companies tell their employees what they are ranked in terms of future potential (i.e., High Potential, Low, etc.).  From the article:

According to a report released Monday by consulting firm Towers Watson, just 68% of companies formally identify high-potential employees, and only 28% actually tell the employees they’ve been labeled as such. The survey was based on a study of 316 companies across North America.

“This is really a missed opportunity,” says Laurie Bienstock, co-author of the report. “You need to wonder how [organizations] are fostering the development of these high-potentials if they’re not informing them.”

Don’t you just wonder!?

Let me tell you a little HR secret Laurie, employers don’t need to tell Hi-Po’s they are Hi-Po’s because Hi-Po’s already know they are Hi-Po’s, that’s one reason they are Hi-Po’s they have great self-awareness.   What employers need to do with Hi-Po’s is the following:

1. Pay them.  Above the market, above average and low potentials within the same workgroups and make sure they know it.

2. Challenge them.  Lead positions on projects, putting them in positions to communicate to senior leadership and shine, getting them into the organizational “circle of trust”.

3. Treat them differently.  Yep, that’s right HR Pros – treat your Hi-Po’s differently than you treat your Low-Po’s – they expect, they want it, they’ll appreciate it.  It will tick off your Low-Po’s, and that’s a good thing – you need your Low-Po’s to be uncomfortable – you’re in charge of making your organization’s talent better, not running a charity event.

The other fact from the article that only 68% formally identify employee potential is surprising to me – and not that it’s low – that number seems high to me.  Hi-Po, No-Po, Low-Po, etc. is a big HR shop game that is a luxury for most organizations.  Is it critical for successful succession planning? Yes.  It is also something that takes a ton of organizational resources to accomplish and maintain.  Once you get that data, you then have to do something with it and keep doing it.  That usually means the development of an entire group within HR, depending on how big your organization is.  So, 68% seems like an inflated number – I’m guessing the survey was given to only large corporations.

Should you tell an employee what they are ranked?  I have and I would – but it really depends on the culture and engagement of your organization.  The one thing I will tell you is, if you have no plan on what you are going to do with this data, don’t start – it will be a waste of time.  I see so many HR Pros run down this path of determining who their Hi-Po’s are without any idea of what they are going to do next.  It’s like “Hey! We found out Joe and Lynn are our Hi-Po’s! Isn’t that great?!”  No, not really – so, what?  The real work comes after the identification in developing your Hi-Po’s into their next level position and building succession, the real work is not in the identifying.

 

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.

Future Jobs in HR and Recruiting with @Kris_Dunn and I! (Video)

Here’s what we know for sure! The jobs we are doing today, quite possibly will not be the jobs we will be doing down the road! How do we know this? The world changes and evolves and while we once needed a ton of Blacksmiths in the world, we no longer need that profession as widely as we once did.

So, are HR pros going the way of the horseshoe!? I just lost all of the audience under 75, but let’s talk about the Future of HR and TA jobs!

Shout out the great folks at the SHRM Store for sending me the cool green I Love HR polo! To be honest, it fits super great and people say the green looks great on me! In fact, if you click through the link, I think they should have used me for the model! Tell me I’m wrong! I’m way HR Sexier!

By the way – I love the tagline “World’s Largest HR Store!” Like who else is going to have an HR Store! Amazon!?! Wait, don’t tell Bezos, he might start one!

Another day making decisions no one wants to make!

On the phone this week with a few HR Pros from the hospitality industry (think hotels and restaurants) some of the folks hit the worst by the pandemic. We start the call like most calls – “how are you doing”.

At some point during the pandemic, when this question is asked, I kind of just started laughing. How am I doing? How are you doing? It’s a pandemic! We survived another day! Does that answer the question?

My HR pro friend says, “It’s another day of making decisions that no one wants to make.” That struck me. She was right of course, that’s the job. Do we let go of Sally today, or cut some other important resource we can’t live without. Which is the lesser of two evils? Can I go home and have a drink already?

“It’s another day of making decisions that no one wants to make.” 

In a nutshell, this is leadership.

For all positives, we get out of being leaders we know there comes a huge downside. There will be times when you must make a decision that no one wants to make, but you have to. The knowledge of this doesn’t make it easier, it’s just knowledge.

What’s the silver lining of all of this?

I do think making tough, unbearable decisions, that no one wants to make, helps you as a leader understand real pressure from fake pressure. The greatest leaders I’ve been around didn’t panic in times that it didn’t call for it, or in times when it seemingly would have warranted it. They understood a call had to be made, no one was going to be happy, this is the job.

Here’s the thing though, with all of this. You can be in a position to make decisions no one wants to make, or you can be in a position where you are able to make decisions and stuff is just going to happen to you. Awful decisions are awful, but I’ll take that situation then not being able to make the decision.

The Pandemic has been hard on HR pros!

If we sat down and started to list out who has been most impacted by the pandemic on the jobs front, we would come up with a pretty interesting list! The vast number of unemployed would show us that almost everyone has been impacted, and, quite frankly, it kind of feels that way.

If we dig into the data side of what has really happened over the last six months, the picture looks less bleak for some, and a little scary for many, especially us HR pros. Appcast, a job advertising programmatic technology company, released its 2020 Midyear Recruitment Marketing Benchmark Report recently that looks at all the activity around jobs. Stuff like which jobs are getting the most applies. What kind of jobs is being posted? Etc.

When we look at the macro-world of jobs, we begin to see some super exciting things around the winners and losers, in the job market, at this point in the pandemic. Some of the outcomes are certainly understandable. In healthcare, for instance, the number one job being posted is for epidemiologists. Okay, that makes complete sense! In the middle of a pandemic, we need more Epidemiologists to help us stop the spread.

One big thing that popped out at me instantly was the job function that had the greatest change in the rate of applies. Meaning, more people in this job function, started looking for a new job. Can you guess what job that would be!? Yeah, it was HR! An increase of 24.5% from Q1 2020 to Q2 2020.

Are you surprised by this? Why would HR, out of all jobs, be the one that is out looking at a higher rate than everyone else?

The reality is, and we saw this during the Great Recession as well. HR pros are often the first to be cut during poor economic times. After all the work, after all the words from the c-suite, after all the studies about the importance HR has on the success of organizations, we (HR Pros) are still one of the first to be cut when money gets tight.

Why does HR get cut first?

Over the next 12-36 months, most economist believes we’ll be in a tough job market. Pandemic hangover, the election, and an economy that was due for a pullback after a decade of expansion, HR jobs will be tough to come by for a while.

HR leaders and pros don’t lose their jobs if they clearly bring value to the organization. Our c-suite executives who are making these calls probably see value creation and sustainability by HR differently than HR sees itself.

We know, with the HR function, far too many of our peers are still too transactional in what they do. Of course, every function will always have a certain amount of work that is transactional, but in hard times, transactional work is the first to go. If you haven’t proven yourself to be strategic, and demonstrate what you’ll add value and increase productivity within the organization, you will always be a target to get cut.

HR is getting cut because too many of us still struggle to show organizations how great people practices drive the world’s most productive and profitable organizations.

The good news is we control this, and we can educate ourselves and prepare ourselves to be value-adders to any organization, no matter the industry or location.

I love the new SHRM Specialty Credential that focuses on Inclusive Workplace Culture. Think about where organizations are right now in the middle of the pandemic and all the energy around social justice. Organizations need HR pros who are going to drive change and make positive business results. Specialty Credentials educate HR pros faster than anything else on the market.

The HR Job market is not going to get easier anytime soon, and the best way to protect your career or put yourself in a competitive advantage over other job seekers, if to have skills and knowledge they don’t. We all make investments on ourselves. Some of those are health investments, or for our family, some are for our careers. The time to make those investments are when the world is changing the most.

Advice for Landing a Job from a CEO (who never hires…)

I get it, you’re the CEO of a sexy brand so all the media companies want to interview you, but when you give advice out that your HR and TA leaders would never give, you’re basically just spewing B.S.!

Pulled directly from the headlines of CNBC, 1-800-Flowers CEO (wait, is that a sexy brand!?), Chris McCann, has to hire 10,000 seasonal workers for the upcoming holiday season to fill the rush of orders they anticipate:

“The ambitious hiring plans will fill part- and full-time roles in production, gift assembly, customer service and distribution and fulfillment center operations. Openings are primarily in-person jobs on worksites throughout Illinois, Ohio and Oregon. Some work-from-home positions, particularly those in customer service, are available.

Here, McCann shares his best tips for getting hired in a seasonal role right now.”

Are you ready for these great tips!?! Here you go:

  1. Arrive at your interview ready to uphold safety guidelines due to COVID
  2. Have a flexible schedule
  3. Express interest in overtime
  4. Tell 1-800-Flowers who want to return to work seasonally, next season
  5. Tell 1-800-Flowers your desire to stay on permanently after your seasonal job.

Okay, not awful, but here is what, I believe, the head of TA for 1-800-Flowers would actually give as advice to someone, right now, looking to work as a seasonal employee for $13.50/hr:

  1. Show up for the interview
  2. Don’t show up drunk or high
  3. Don’t throw up on the person interviewing
  4. Don’t lick anyone during the interview
  5. Show up on your first day

Hiring seasonal workers, especially right now during a pandemic is hard work! It’s almost impossible in the best of circumstances, Chris McCann is so far removed from hiring a seasonal worker he has lost all touch with reality!

First, these are seasonal jobs, McCann himself said only about 5% will make it to the big leagues of a full-time offer after the seasonal job is done. So, let’s not give out a ton of hope, because you just end up with thousands of pissed off people after the seasonal job is done! HR and TA hiring for seasonal spend most of the interview validating that the applicant actually knows and understands this job is going to end in 3 months!

Second, seasonal hiring is warm body, show up hiring. Calm down, Chris, on making a great first impression. When you’re trying to hire 10,000 people at low wages for three months, if you show up, you get the job!

Third, Chris McCann, did Undercover Boss, which tells you a few things. One, he acted like an hourly worker for a TV show, so he thinks he knows what it’s like to be an hourly worker in his environment. Two, he actually wanted to go on a TV show versus running his business. Some CEOs just like media attention.

Here’s what we all should know at this point. The larger the company, the less the CEO actually knows about the reality of hiring. Once that CEO is working for an organization that has more than 500 employees, there’s a good chance they haven’t hired an hourly worker in years. So, thanks for the advice, Chris, but you’re not helping your HR and TA team fill jobs!