Category Archives: Turnover

The First Sign You Suck at Hiring!

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Hiring people to work for you directly is probably the single hardest thing you’ll ever have to do as a manager of people. To be fair, most people are average at hiring, some are flat out kill and probably 20% are awful at hiring.

The first sign you suck at hiring is your new hire turnover is an outlier in your organization, your market, or your industry.

So, what constitutes new hire turnover?

I find most organizations actually don’t measure their hiring managers on new hire turnover but use this to judge effectiveness on their talent acquisition team. That’s a complete joke! That is unless you’re allowing your TA team to make hiring decisions! New hire turn is a direct reflection of hiring decisions. Period.

When should you measure new hire turn?  Organizations are going to vary on this based on your normal turn cycles and level of the position. Most use 90 days as the cap for new hire turnover. That is safe for most organizations, but you might want to dig into your own numbers to find out what’s best for your own organization. I know orgs that use one year to measure new hire turn and orgs that use 30 days.

How do you help yourself if you suck at hiring?

1. Take yourself out of the process altogether.  Most hiring managers won’t do this because their pride won’t allow them. If you consistently have high new hire turn comparable to others, you might consider this, you just have bad internal filters that predispose you to select people who don’t fit your org or management style. Don’t take it personally. I suck at technical stuff. I shop that part of my job off to someone who’s better. You might be an exceptional manager of your business, but you suck at hiring. Shop that out to someone who’s better!

2. Add non-subjective components into your hiring process and follow them 100% of the time. Assessments are scientifically proven to tell you what they’re designed to tell you. If you follow what they’ll tell you, you’ll be much more likely to make consistent hires. If that assessment gives you better hires, then keep following it, or find an assessment that does give you that consistency.

3. Analyze your reasons for each misfire hire. Were there any commonalities in those? What I find is most poor hires stem from a hiring manager who gets stuck on one reason to hire, which has nothing to do with being successful in your environment. Example: “I want high energy people!” But then they work in an environment where they are stuck in a 6X8 foot cube all day. It’s like caging a wild animal! 

Numbers don’t lie. If you consistently bomb your new hire turnover metrics, it’s not the hires, it’s you! In the organizations where I’ve seen the best improvement in reducing new hire turnover, it was in organizations where new hire turnover metric results were solely the responsibility of each hiring manager, and nothing to do with talent acquisition.

It’s the 80/20 rule. 80% of most new hire turn is usually coming from around 20% of your hiring managers. Fix those issues and ‘magically’ your new hire turn improves.

The True Cost of a Bad Hire

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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” and those, my friends, are considered 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.

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.

5 No-Cost Retention Fixes!

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I love SMB HR shops (SMB – small/medium sized businesses) for a number of reasons, but none more than for the simple fact, smaller sized HR shops are forced to be more creative because of

Creativity and SMB HR shops, remind me of my Grandma. Grandma grew up in the depression.  People who grew up in the depression have creativity skills to burn!  They had so little but found ways to fill their life with so many things.  Lack of resources didn’t stop them, it unleashed their creativity!  Creativity is the most underrated HR skill out there for high performing HR shops.

Having worked in big HR shops the one thing that frustrated me most was sitting around in large meetings, trying to figure out how to “fix” retention – and listening to all the ways and how much money it was going to cost.  In the end, I always came back to, if we just take all this money we are going to spend on the “fix” and just go out and hand to the employees, we probably won’t have a retention problem.

Large HR shop folks don’t like to hear that!  So, for you SMB HR shop folks out there, with little or no money to spend on increasing your retention, I came up with a few ideas you might want to try before you go spend all that budget money on programs with little return.

Large HR shop folks don’t like to hear that!  So, for you SMB HR shop folks out there, with little or no money to spend on increasing your retention, I came up with a few ideas you might want to try before you go spend all that budget money on programs with little return.

No Money Retention Fixes:

Fire the manager with the lowest retention.  You have the data, you know who is turning people over. Your organization needs to send a message that managers, not HR and not the CEO, are responsible for retaining talent.  This has to be the first step!  Your leaders have to have a clear understanding it is their job to retain their employees, and it’s your job to hold them accountable for it.

Measure it by Department, and post it publicly for all to see.  No, don’t just share it in meetings.  Post it up in the lobby, down the halls, everywhere!  Then just wait.  It will almost change overnight.  No one likes to be at the bottom of any list and have everyone know it.

Fire your worst performers – then use that money to compensate your best employees more.  It’s a wash.  Your worst employees aren’t helping your productivity anyway, and your best will appreciate the increase, appreciate you noticing the bad people were taking away from the team, and they’ll give you more discretionary effort.  The result – same cost (actually less if you factor in benefits, taxes, etc.) more productivity, a little less headcount.

Have your senior leadership talk about retention publicly, constantly.   That which gets measured will get changed, that which gets measured and has the eye of senior leadership will get changed much quicker!

Institute a “Save Strategy” for employees who want to leave.  Save Strategy? If an employee puts in their notice, have them go meet with your CEO and explain to her why they are leaving. You’ll be amazed at the results and how many people will change their minds.  Some people just want to know you care, and sitting down for some one-on-one with the CEO, shows that a whole bunch. Plus, it’s much cheaper than finding their replacement!

Seems like most of these retention fixes are just good old fashion performance management. Crazy how that works. Do performance management really well and people want to hang around for a while!

Sackett Stats #36 – Boss Block

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I was with some HR blogging friends at a conference recently and we were talking shop. Someone had a great idea for a blog post, but said they couldn’t find any stats to back it up, so they weren’t going to write about it. My exact quote back was, “I just make stats up!”

To be fair, when I do make stats up, I tell you! It’s something like, “9 out of 10 employees who are fired (by me) want to kill their boss!”

My stats aren’t just made up! Sackett Stats are based on nothing more than twenty years of my experience working in the trenches HR and TA, across multiple industries. To be honest, though, some idiot will one day read this and think it’s a real number, stick it in their Forbes article, and they a few weeks later you’ll see it at your local SHRM meeting in a presentation deck!

Sackett Stats! Like Pew Research, but far less likely based on actual research.

Sackett Stat #36 is called Boss Block.  The concept of this statistic comes from the number of years that are between you and your boss in age. The lower the number, the less likely you’ll ever be promoted, and the more likely you are to turnover.

The average over/under Boss Block number that pushes a person to leave an organization is 5.3 years.

If your boss is more than 5.3 years older than you, you are less likely to leave the organization, believing you will eventually get a chance to be promoted. Obviously, the farther apart in age, to your boss, the less likely you are to leave on your own. If your boss is 5.3 years or less to your age, you are highly likely to leave, believing there is no chance in hell you’ll ever get promoted because you’re being Boss Blocked for promotion.

Sackett Stats – like most stats, but more believable.

Rerun – I Love Hiring People Who Have Been Fired!

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It’s Spring Break in Michigan, so I’m going to step away from the daily grind and throw some Reruns at you! You guys remember Rerun, from What’s Happening? (look it up, kids!) So, enjoy the Reruns, they’re some of my favorites!

Originally ran July 2013 – 

There are few truisms I know in HR.

1. As soon as you think you’ll never be surprised again by something dumb done by an employee – you’ll be surprised.

2. You’ll be asked every year in HR to reduce your budget.

3. Employees will always believe HR knows more than HR really does know.

4. HR vendors always say they’re giving you their ‘lowest’ price until you say ‘no’, then a magical new lower price will come up.

5. Many employees who get fired were at one time really good employees.

The last one is one I really love!  It is a simple fact of life that most people will at some point in their life be fired from a job.   Might be their fault, or not, either way it’s not uncommon.  Here’s what happens to most people when they get fired – it’s like the 5 stages of grieving : You’re shocked – even when you know it’s coming; you’re pissed – how could you do this to ‘me’; you’re sad – what am I going to do; you’re anxious – I’ve got to get something, now!; and you’re determined – I’ll show you.   It doesn’t happen in this exact path for every person – but for many the flow is about the same.

Here’s what happens to most people when they get fired – it’s like the 5 stages of grieving : You’re shocked – even when you know it’s coming; you’re pissed – how could you do this to ‘me’; you’re sad – what am I going to do; you’re anxious – I’ve got to get something, now!; and you’re determined – I’ll show you.   It doesn’t happen in this exact path for every person – but for many the flow is about the same.

What you find is that someone who has been fired from a job comes with this cool little chip on their shoulder when you hire them.  It’s this deep down fire to show you and everyone else they know – that the person who was fired, isn’t who they truly are – they are more than that person.  This motivation is great!  It’s a completely different motivation than you get when you hire an employee who is currently employed and doesn’t really need your job.  I want people with some ‘want’ in them – some hunger – maybe a little pissed off with a chip on their shoulder! This edge, and memory of being fired, can carry people to great performance for years!

It’s a completely different motivation than you get when you hire an employee who is currently employed and doesn’t really need your job.  I want people with some ‘want’ in them – some hunger – maybe a little pissed off with a chip on their shoulder! This edge, and memory of being fired, can carry people to great performance for years!

In our organizations, we fire so many people who use to be great, and for a number or reasons you now believe they are crap.  And for you, they truly might be performing like crap – but for me they might be willing to be great again!  We had a saying when I was in HR at Applebee’s while doing annual calibration of our teams –

“if you talk about someone for more than 10 minutes they turn into a piece of crap”. 

Doesn’t matter who – our best to our worst employee – the longer you talk about them, the worse you start to view them.  This happens because it’s in our nature to focus on their opportunities, not their strengths – so the longer you talk the more you talk about what they can’t do, not what they can do.

So, there you have it – send me your crap employees – I’ll love them!

When Take Your Kid To Work Goes Too Far!

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If you haven’t heard by now, Chicago White Sox player Adam LaRoche decided to retire and walk away from a guaranteed $13 million dollars because the White Sox asked him to bring his kid to work a little less.  Yes, you read that correctly.

Apparently, LaRoche, who signed with the White Sox last year and made $12.5 million liked to bring his 13-year-old son to spring training with him. He asked the White Sox if it was alright if he brought his kid to spring training, and they said yes, believing the kid would come for some batting practice once in a while and hang out in the clubhouse. Little did they know, LaRoche actually had his kid with him 100% of the time he was at the facility!

A statement from Ken Williams, the President of the White Sox:

“There has been no policy change with regards to allowance of kids in the clubhouse, on the field, the back fields during spring training. This young man that we’re talking about, Drake, everyone loves this young man. In no way do I want this to be about him.

“I asked Adam, said, ‘Listen, our focus, our interest, our desire this year is to make sure we give ourselves every opportunity to focus on a daily basis on getting better. All I’m asking you to do with regard to bringing your kid to the ballpark is dial it back.’

“I don’t think he should be here 100 percent of the time – and he has been here 100 percent, every day, in the clubhouse. I said that I don’t even think he should be here 50 percent of the time. Figure it out, somewhere in between.”

So, the internet went crazy supporting Adam LaRoche on this with the #FamilyFirst hashtag and set the White Sox up as “evil” because they wouldn’t allow a player, that they are paying $13 million to, to have his kid at the workplace full time!

I get it, the internet is mostly stupid.

This is a family issue. Bob the electrician down at the GM plant. Guess what, he never gets to bring his kid to work, and Bob doesn’t think GM should allow him to bring his kid to work. Bob makes $50,000 a year. If Adam wanted to  spend more time with his kids, maybe he should choose a career that doesn’t put him on a the road 200 days a year.

I do have another idea, that no one is talking about.

Adam LaRoche made $12.5 Million dollars last year in his 12th MLB season. He hit .200, his worst year ever. This year the White Sox were going to have to pay him $13 million, and he’s not getting better.

Maybe Ken Williams was just doing some good old performance management! Hey, Adam, you’re sucking, maybe it’s time to leave the kid at home and start focusing on hitting the curve a little better. We are paying you way more than you’re worth at this point!  Knowing that telling him he can’t bring his kid to work, will potentially do one of two things – 1. he’ll retire and we don’t have to overpay for talent; or 2. he’ll actually get a wake-up call and start hitting. Either way, the White Sox win.

How do I know this is potentially true? Take the same scenario and use a different player, like Miguel Cabrera of the Detroit Tigers, arguably the top player in baseball. If Miggy wanted to bring his son to spring training, or he would retire, what do you think the Tigers would do? If you’re performing, you get perks. Miggy’s kid would be shagging balls in the outfield, I can tell you that!

Adam LaRoche isn’t a hero from walking away from $13 million dollars to spend time with his son. He’s already made $78.5 million in the last 12 years. He and his son can both retire. Adam wasn’t performing.  He is set financially. Leaving to spend time with his son was just a good excuse to end it because he couldn’t hit his weight any longer.

 

T3 – @Benevate

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This week on Talent Tech Tuesday (T3) I review a new and unique benefits solution called Benevate. Benevate is a solution that will help you attract and retain talent and improve employees’ financial wellness. “DRINK” – that’s the new HR drinking game for 2016! If anyone says “Financial Wellness” you have to drink. You might recall that “Candidate Experience” was the HR drinking game code word for 2015.

But, seriously, I really, really like what Benevate is doing!

Benevate is built on a really simple premise, which is how all the great products start. Your younger workforce faces two major hurdles, for the most part:

  1. Student Loans
  2. No Cash to buy a house.

Benevate gives you a simple to use Saas software platform that allows you to manage these two issues with a Student Loan forgiveness program and an Employer Assisted Living loan program.

Screen Shot 2016-02-15 at 2.35.24 PM

Why is this important? Either one of these programs will give you great ammunition to attract and retain a younger workforce.  I can tell you the first time I used ‘student loan forgiveness’ was about 12 years ago when we did this recruiting Pharmacists right out of school, and it worked like a charm! I also used this in healthcare to attract CRNAs when you could find them anywhere, we were fully staffed! I’ve seen companies recently do this with hard to find IT and Engineering talent.

The problem with doing this yourself is that it’s a major pain in your ass, for HR and for the organization in general. HR isn’t built to be a bank/loaning institution. The last thing in the world I want to do in HR is manage a bunch of loans and worry about some kid defaulting, then what do I do. That is why Benevate is so awesome! They take care of all of this, but at the same time allow you the flexibility and freedom to design the program you want for your organization.

So, right about now you’re asking yourself, well all this sounds great Tim, but how do we pay for it!

That’s where it’s important to understand what the true cost of your employees are cost you.  51% of young employees go to the doctor once or less per year! These young workers cost you a ton less to ensure.  They don’t even use their health benefits, for the most part! As an employer, you need to offer them benefit equability. Benefits they’ll actually want and use.

You pay for it by giving benefits to your younger workers that they actually want, which in turn comes with a loan guarantee from them that they’ll stick around. The cost of replacing great talent is crazy high, a heck of lot less, than what you’ll spend on a loan forgiveness program.

Love the program and concept. More companies should use this idea, but they don’t because it was always a pain in the butt. Now it’s not!  Take a look at Benevate, they make loan forgiveness super easy!

T3 – Talent Tech Tuesday – is a weekly series here at The Project to educate and inform everyone who stops by on a daily/weekly basis on some great recruiting and sourcing technologies that are on the market.  None of the companies who I highlight are paying me for this promotion.  There are so many really cool things going on in the tech space and I wanted to educate myself and share what I find.  If you want to be on T3 – send me a note.

Would You Fire Your Top Performer for Punching Another Employee?

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The world of the NBA brings us the real live HR Game Show – What Would You Do?

I know most of you could care less about professional basketball, and I promise, this post isn’t about basketball. In case you didn’t hear last week, Los Angles Clippers Allstar, Blake Griffin, punched an equipment manager of the team, Matias Testi, after a game, while out at dinner.  In the face, more than once, and he broke his hand doing it. So, now he can’t play for the next six weeks.

Most people just chalk this up to stupid, overpaid, professional athlete does wrong. Not even page 1 news. Almost happens on a weekly basis.

For those HR Pros in the audience, you know, the Clippers have a major problem now!  One employee just did bodily harm to another employee. Not only that, your BEST employee just did bodily harm to an employee that can be replaced by a million people in a second.  Your best employee can’t be replaced, and if your competition gets him, it hurts your company. That’s pretty close to the truth.

So, tell me Mr. and Mrs. HR Pro – What Would You Do?

Let’s break down some options:

1. Fire both parties. It takes to get your butt beat. Both were engaged in a verbal spat that one party took further.

2. Fire Blake. He’s twice the size of the guy he hit, and he’s at a much higher level within the company, thus his responsibility is much higher on how he acts.

3. Don’t fire either. Which is probably what’s going to happen – but would never happen in the ‘real’ world. The two parties involved are friends. Something happened that shouldn’t. The lower employee has the job of his life, constantly surrounded by millionaire athletes, he doesn’t want anyone fired. He probably wants to apologize that his head wasn’t softer so he didn’t break Blake’s hand.

4. Fire Matias. He’s replaceable. You could easily cut a severance agreement for a small price and all this goes away. Being in the position he was, he should have known not to push Blake’s buttons and the value Blake has to the franchise.

5. Suspensions all around. Suspend Blake and Matias for their involvement in the industry. The problem with this is the Clips are trying to make the playoffs, probably will, and they’ll need Blake, which is about the same time he would be coming off this injury. Are you really going to suspend your best employee for the playoffs? Heck no. I don’t care about Matias, you can suspend him, no one will notice.

A real HR pro in this situation only has one option. Fire Blake.  He’s demonstrated that he’s willing to physically harm an employee of the company, put the organization in harm’s way by missing games, and even self-implode by not controlling himself in a scenario a normal person would.

This is where reality kicks real life HR Pros in the teeth.

The real call here is to get rid of Matias.  This decision on all fronts leaves the most positive outcomes for all involved.  The Clips get rid of a low-level employee for very little money. If he’s truly a friend of Blakes, he won’t cause problems, he knows where the real money is in this relationship. You can’t leave the possibility, even the remotest, of this, happening again. With Matias on the team, this could always happen again.

Real HR Pros gasp at this scenario because we all know where this would lead in real life. The courtroom. That’s where you miss one really smart play here, that you also can use, the severance agreement. Get them to sign the paper, hand them a check, move forward. The Clips would be smart to move forward, not without their best player, but without an equipment manager, they could easily replace.

Do I do anything with Blake? Yeah, something has to happen. I probably give him the biggest fine I can under the collect bargaining agreement, and maybe even go higher, just to prove a point, knowing it will get knocked down.

Agree or disagree? Hit me in the comments!

Sometimes, You Quit a Job for Love

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Every once in a while you an employee who decides to move out of state, or another city, or a country, to be with the love of their life. There’s very little you can do as an HR pro or leader to keep this person. You can’t beat love. This is a story about that, but way more.

When I was in middle school my Dad did something for me that I will never be able to truly thank him for. His company, Spartan Stores, started sponsoring the Michigan Special Olympics. My Dad was asked if he would volunteer to help cook food for all the participants. He brought me along, even though I really didn’t want to go.

It was one of the best things that ever happened to me. I got to see true joy. True empathy. I got to see something that changed my life. I continued to volunteer all the way through college, then got involved heavily in coaching youth athletics, and I haven’t been back. But, I will. I only say this because I have such a special place in my heart for people living with Downs and other genetic abnormalities. They have so much to show us and offer us.

To feel love this strongly over just one thing in your life, you would be lucky. To feel this love over more than one thing in life is a godsend. Take a view, it’s only 2 minutes:

New Mexico is definitely losing, but Denver is definitely gaining!

I think it’s important to point out, there are two kinds of love here. Job love, which is very strong here. Real love, which is even stronger! When you’re employees leave you for the love of another, it can be heart wrenching on them. Do them a favor, and don’t make it harder.

Just be happy for them. Support them in every way you can. You’ll find another employee. They may never find another love of their life.

Career ADHD: Is Employee Tenure Still Important?

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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.

Payscale recently released survey data showing that the average employee tenure is sitting at 3.68 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 career.

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 realistic 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 real, lasting impact to 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 its 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.