Would You Pay .5% of Your Salary to Employ Your CEO?

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Let’s say you make $50,000. That means you would pay $250 annually to keep your CEO employed.

Are you willing to do that?

That’s, on average, how much each employee of a Fortune 500 company pays for their corporate F500 CEO in terms of the executive compensation of a CEO. Now, I know you don’t really pay any money out of your check to your CEO, directly. But, if your company wasn’t paying your CEO millions of dollars, could they be paying you a little more?

Or, do you believe the compensation your CEO is making is giving you, and all the other stakeholders of your organization, a good return on your investment?

A new study is out that looks at this issue:

How much a typical employee of the S&P500 firms implicitly “contributes” to the salary of his/her CEO? An amount of $273 on average or 0.5% of one’s salary, that is, one half of one percent on an individual salary basis. To assess whether such a contribution is worthwhile, one must determine the value of the CEO for the organization and its workers and stakeholders.

I love the mental exercise of this. Being a CEO of a small business it truly brings into perspective what you bring, or don’t bring, to those you work with each day. At the level of a Fortune 500 CEO, and the amount of CEO compensation at those giant companies, it’s hard to even imagine!

Tim Cook, the CEO of Apple, had a total compensation of $125 million dollars in 2019, down from $136 million in 2018. Do you think the employees of Apple would be willing, across the board, every single one, to pay .5% of their salary to keep Tim as CEO or go with a cheaper option?

Better yet, Apple is a very successful, profitable company. If the employees of Apple chose another CEO making, let’s say, only $10 million per year, would that profitability really change that much?

Many people have this argument around college and professional coaches ‘ salaries in sports. Does an NCAA coach making $8 million a year at a power 5 conference, really that much better than a coach making $500K at a mid-major program? Probably not. CEOs probably aren’t that much different. It’s very rare to find a leader, or coach, who is truly transformational that you can point to and say, yep, Timmy is definitely worth what he’s getting paid!

It would be an interesting internal study within your organization to see what percent of your employees would say they would be willing to pay it. It’s really a great measure for your CEO to understand their impact and worth, and probably bring them down to reality a bit.

What do you think? Would you be willing to pay .5% of your salary to your CEO!?! HRU employees – you don’t have to answer this! I already know you would! 😉

5 New Years Recruiting Resolutions You Need to Follow and How!

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(Boy! Someone needs a shave!)

Free Webcast: January 28, 2019 at 1 PM EST (12 PM CST, 10 AM PST)

Come join me and Jessica Miller-Merrell as we break down 5 of the biggest areas every Talent Acquisition department should be focusing on in 2020!

Session Description:

It’s a candidate-driven job market right now. And there are no signs of the frenzied pace of hiring slowing down. With the rapid-fire pace everyone is moving, it’s a challenge to slow down enough to plan and prioritize. With this webinar, we’ve got you covered. Join this webinar presentation sharing the top 5 recruiting priorities you need to be focusing on in the new year. We’ll go beyond talent acquisition buzz words sharing real-world application that is designed to put you in a competitive advantage in the talent marketplace. Hear how to prioritize your efforts, where to focus, and how to drive the most qualified candidates in the quickest way possible using these 5 strategies for success.
This webinar is worth 1.0 HRCI Business and SHRM credit.

A replay will be available for those unable to attend the webinar live. 

Register Here! 

 

HR Managers! Sometimes Executive Compensation is Above Your Pay Grade!

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From the front lines of in the weeds HR Management in Detroit – HR Manager claims to have been fired for whistleblowing on some unfair executive compensation practices!

From the front lines of real HR:

A human resources manager at the publicly-funded Great Lakes Water Authority has filed a whistleblower arbitration case against the agency, claiming she was fired only days after raising concerns about lucrative new retirement benefits for authority CEO Sue McCormick, and how they were handled.

The benefit netted McCormick, a former manager of the Detroit Water and Sewerage Department, more than $90,000 in additional retirement money in 2018 — an amount so large, it had to be split over two years to conform with Internal Revenue Service maximum retirement contributions by an employer.

Hmmm…sounds fishy…continue:

Though other GLWA employees also received the benefit — designed for former Detroit water department employees who left city employment to come to GLWA before becoming vested in the city’s pension system — McCormick’s bonus under the program was, by far, the largest, said Stephanie Stevenson, a human resources manager with the agency whose job included oversight of employee benefits…

…Stevenson said it seemed as if policies were being created specifically to assist McCormick with her predicament — and were being made without consulting Stevenson, who oversaw benefits.

“This was unfair. It was like an abuse of power — corrupt,” Stevenson said.

Rule number one in HR Fight Club – do not make a benefit change without first consulting the HR Pro in the house!

So, the GLWA decided to terminate HR Manager Stephanie. Did they terminate her because of the whistleblower complaint? “No!” was the exact quote from lawyers representing GLWA. Why was Stephanie fired? They weren’t saying…

Here’s the thing.

Almost every executive makes so much more than the run of the mill employee, and HR Manager, that when you see something like your initial impression is something isn’t right about this! Executive compensation is a different animal altogether!

Now, I don’t know if Stephanie was fired for whistleblowing. But, when you hear the explanation of the additional compensation benefit and its design, whether it was done specifically for the CEO or not, they dotted their i’s and crossed their t’s, and while most employees couldn’t take advantage of this additional benefit, all were eligible.

“Unfair” isn’t illegal and sometimes that’s is so hard to accept. Is it fair this CEO gets a bunch of money given to them when most employees will not be given anywhere near this amount? No. Is it illegal? Also, No.

If I was a betting man, Stephanie, got fired not for whistleblowing, but for probably some stuff she did to prove something illegal was going on, when it really wasn’t, but it felt like it was. Why don’t people come forward with whistleblowing complaints? Because either way, no one wants you around afterward. Rightly or wrongly, a trust has been broken. That’s not right, that’s reality. Funny enough, most HR pros actually know the math on this!

What I find most helpful when dealing with executive compensation stuff like this is to bring a few people into the decision-making process, and have us all together at the same time. I want someone from my legal team, someone from my HR team, and someone from my finance team, hopefully with their CPA. Are we legal, are we following tax laws, are we breaking policy we shouldn’t? Is everyone good? Okay, go.

Executives are hired and fired for making decisions above our pay grade. Sometimes they get benefits that seem unfair and exorbitant. The big question you need to ask, is this illegal or simply just unfair? Those are two very different things!

SHRM-SCP or HRCI-SPHR? HR Pros – Which one should you get?

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I’ve been HR blogging for ten years. You learn a few tricks about blogging after that amount of time. One is you find out what people actually want to read by the search words they use to find your blog and various blog posts.

One of the most all-time most searched for terms that find my blog is:

“SPHR or SHRM” or “SHRM or HRCI” or “SCP or SPHR” or some combination of those terms.

For my non-HR readers, SHRM is the world’s largest HR association. HRCI is an organization that has certified HR pros through education and testing for decades. A couple of years ago, SHRM decided to take that type of activity in-house and do it themselves, which led to competition around who’s certification is better SHRM or HRCI, or which certification should you get SHRM or HRCI?

I wrote about this a couple of times, years ago, and it still comes up and I still get questions about it, so I thought I would do an update on the topic. The first time I wrote about this was in December 2016 when SHRM first announced its move into the certification space. My opinion then was I’m going to have both, and see how it all plays out, but SHRM is the brand name that HR pro and leaders identify with, no one really knows HRCI outside of the HR world.

What’s changed in the past three years? 

Really, not much! It’s played out a little slower than I thought, and there hasn’t been really any big moves like I thought would happen on the HRCI side. My feeling back then was SHRM would slowly bleed HRCI dry and take over the HR certification space. That has definitely happened, but not at the pace I thought it would. I would have thought HRCI would have had to pivot by now or be out of business altogether.

But, a funny thing has happened. HR pros/leaders, by their nature, hate change and are slow to change, so those who had their HRCI certification, have basically just kept at it, instead of changing. If anything, we probably see more people now holding both certifications, which is really kind of silly to pay both fees. In fact, my plan is to not renew my HRCI certification the next time it comes up.

Why?

My feeling hasn’t really changed. SHRM is still, by a mile, the brand name that is recognized in the HR community. The reality is HR pros get an HR certification to better themselves, their career, and their HR knowledge. As an HR pro, when you go on an interview, almost no one is going to question whether you have an SHRM cert or an HRCI cert, only that you have the certification. Also, most executives will identify with SHRM as being the gold-standard, again mainly because the brand is so strong in the industry.

What’s Next? 

In a modern world, what is it that people really need to show you they know their stuff? We all know someone who has a certification in HR that basically sucks at HR, so we go, “well, certifications tell us nothing!” I don’t agree with that. Taking both the SHRM cert and the HRCI cert, those assessments are for real. You just don’t show up, without studying, and pass those. So, there is definitely knowledge that is learned if you have one. But, we know that knowledge, alone, isn’t enough to be great at a profession.

SHRM has launched Micro-credentials, like mini-certifications, where people can dive deeper into certain aspects of the HR knowledge base. I think those have merit.

I think both HRCI and SHRM have completely missed the boat on talent acquisition certification. I’m on the board of ATAP and because it’s newly formed, and mostly volunteer, we don’t have the capacity to make this happen, but someone like HRCI could do it and it would be huge. Corporate TA leaders, more than anyone, struggle to find talent that knows what they’re doing. Again, certification doesn’t mean you’ll be great, but it’s a good first step to show someone actually cares about their profession and educating themselves.

SHRM’s answer to Talent Acquisition was the micro-credential and I got to be an instructor for one of the classes for this credential and the content was really good. But, it’s mainly designed for non-recruiting, recruiters. HR Pros who have to recruit, but it’s not their full-time gig.

More and more, we are seeing that formal education, getting your bachelor’s in HR, etc. It doesn’t have the ROI that it has in the past. This has led to many organizations hiring for positions and no longer requiring a college degree. HR is clearly one of those fields where a degree shouldn’t be a requirement. Some of the greatest HR pros I know do not have a degree but do have certification, and their lack of a formal degree has no bearing on their ability in HR at all. All that said, getting the degree will get you where you want to go faster.

The key to being great in any field is how you educate yourself and keep up on the industry. Too often I find way too many professionals that believe the way you keep up on being a great professional in your field is by showing up to work each day. That is not how you become great at anything! If you do not keep yourself up to date in your field and interact with others in your field, you slowly (or sometimes quickly) become obsolete.

Is there something else I should be getting besides SHRM or HRCI?

I do not feel, in the HR community, there is something else that replaces either one of these right now. There are a ton of new micro-learning, on-demand digital learning sites that are out there (Udemy, Lynda, Khan Academy, etc.) that can augment the things you won’t learn studying for SHRM or HRCI certifications.

Also, I do believe any modern HR Pro/leader has to really work to educate themselves on the HR Technology space that is now a critical component and competency for great HR in today’s world. Neither SHRM or HRCI really go deep enough on HR technology, but you will never get all you need from any one organization.

This is why your HR network of peers and mentors is critical. Networking with HR pros outside of your normal everyday world. Facebook and LinkedIn groups have really been excellent for this, in an online format. Local SHRM groups, DisruptHR, and various other local HR groups are also a great way to network and stay up to date on the latest HR trends and topics.

 

What is this hire supposed to do?

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I’m only talking to leaders today.

We tend to fall into this rut. I have a position on my team. A person leaves. We need to fill that position.

Before you fill your next position, as yourself this one question:

How will this hire bring us closer to reaching our business objective? 

In fact, you might want to ask that question in the interview of the candidate. How are you going to move us closer to meeting our business goals and objectives, and of course, first tell them what those are.

Too often we replace people without really seeking to understand if a certain position is really doing that. Well, we’ve always had a person in this position, so we need to replace this person. But, if that position isn’t really moving you closer to meeting your objectives, maybe it’s the right time to not hire that position, and maybe hire a new position.

Business objectives evolve and change over time. A position you needed five years ago, quite possibly might not be needed today.

I also find that what a certain position is supposed to accomplish sometimes devolves over time based on who had the position. Well, Timmy’s position was supposed to do “X”, but Timmy wasn’t very good at that, but we liked him and now Timmy’s position does “Y”. Really, so do we no longer need “X”?

If any position isn’t moving your department or business closer to your goals, it’s a position you should not be filling. We have a really difficult time as leaders not filling positions on our team that we’ve always had. We love to build our empires, not break them down. The reality is the most effective leaders don’t just backfill positions, they analyze where the real need is or isn’t in their world, and then work to make that happen.

Great leaders don’t backfill positions. Great leaders first decide is this role going to move us closer to meeting our objectives?

How do we find more candidates?

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I get asked this question at least once per day. Sometimes I get asked this question so many times I think someone must be playing a joke on me. I start looking for the camera. Who’s filming this?!

If I don’t just come out and answer the question and I instead ask questions, I find that almost always the person asking the question already knows the answer.

You have a job. You need to fill the job.

Let’s break it down:

  • What do you need?
  • Where are those types of people in your market?
  • How would you let those people know you want them?
  • Any other questions?

The answer to the question is you go to where the people are that you need and you let those people know you want them.

If it’s so easy, why are so many people struggling?

It’s uncomfortable. The answers lead you to be in a place you don’t want to be.

Oh, the people we need work across town at our competition. Oh, we need to get in front of those people in multiple ways. Oh, we need to talk to those people and tell them why we are a better option.

Almost all of us have the answers. The problem is the answers aren’t what we were hoping to hear.

“But, isn’t there an easier way, that will cost the same or less and take less time and effort?” No. There are other ways that will be easier for you, but those will always take more resources. It’s a fairly simple equation. The more effort you want to give up, the more it will cost to replace that effort in other ways.

Want to find more candidates for your positions? You can either do the work or find someone to do the work.

Recruiting Facts: People Actually Like It When You Want Them…

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If I hear one more person tell me that candidates don’t like phone calls, I’m going to shove a phone up your…

I’m not the smartest cat, but I know a couple of things.  Here are a few things I know:

1. You can’t taste the difference of well Gin and high-end Gin after 4 Gin and Tonics.

2. French Fries, Onion rings and Tator Tots taste great fried and taste awful baked.

3. Great tasting chocolate is the reason women can be single. (okay, I stole that one from my wife!)

4. Candidates with car trouble are lying.

5. People like to be told that you want them for a job! It’s flattering. It makes them feel important. It makes them feel valued. They love to listen to what you have to say, regardless of how satisfied they are in their job.

If I called you right now with a job that was something you have always wanted, guess what would happen?  You would call me back. You would call me back almost instantly. You would run out to your car, telling the receptionist on the way out you have an urgent personal call, to hear what I have to say.

Those people. Those thought leaders. Those idiots, who are telling you candidates don’t like phone calls are LIARS!

Why are they lying to you? Here is why I think they are probably lying to you:

1. They are lazy and hope the internet will solve all of their problems.

2. They are hoping to talk the world into believing you never have to make a phone call to get a job.

3. They are scared.

I did a survey where I asked 100 people, mostly millennials, (all potential candidates, since all people are potential candidates) if I called you with your “Dream Job”, would you either pick up my call or call me back?  Would you like to know the results?

100 out of 100 said they would pick up my call or call me back! 100%!

Recruiters who say candidates don’t like phone calls are not recruiters, they’re administrative professionals. Pay them accordingly.

Why Do You Go To Work So Early?

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Cooper: You know Dad you don’t have to go to work so early.

Me: Yes I do, someone has to pay the bills, put food on the table, keep the lights on.

Cooper: Yeah, I guess you’re right.

Me: (internal voice) – he’s probably right.

This was a conversation my youngest son and I had a few years ago. We are both early risers, so he and I have spent many mornings up before the rest of the family.

I like getting to the office early for a couple of reasons. It’s usually quiet, not a lot of distractions, so you can get a lot done, and, personally, I just perform better in the morning. I’m more productive early.

The reality is there are a few that I work with that are like that, but I find a bigger majority is probably not as early risers as I might be if given the choice. Therein lies the real issue, “given the choice”. If you were given the choice to start work at let’s say 7 am or so, or start work at 9 am or so, which do you choose?

I’ve always thought it was silly that high schools start classes, for teens, at 7 – 7:30 am. Teens have growing bodies and developing brains, why not let them sleep in and start school at 9:30 am or so? It truly makes zero sense, if we are actually trying to what’s best for children….but I digress…

What about the modern workplace? What time should work start?

I think for the most part, in environments that can manage this, we should allow workers the flexibility to start when they feel they’ll be most productive. If you’re an early riser, great, get in here and kill it. If you like to stay up late watching Netflix and roll out of bed at 9 am, awesome, get in here and do your thing.

It seems easy enough! So, why doesn’t this happen as much as it should?

The early risers don’t think the late risers really put in the hours they should. I come in at 7 am and I leave at 5 pm, I put in 9 hours. You come in at 9 am and you leave at 6 pm, you only put in 8 hours. It’s not fair! Honestly, this is really the main argument and why so many organizations still force employees to arrive at basically the same time!

It’s back to good old fashion clock watching!

The reality is, in a modern workplace, we should care less about hours and more about what actually gets done. If it takes you nine hours to get done what it takes me seven hours to get done, that’s a ‘you’ problem, not a ‘me’ problem. To make this happen, though, we have to have great measures of performance and hold people accountable to those measures.

Ugh, that’s difficult, let’s just stick to making everyone work the same amount of hours at the same time, that’s so much easier…

 

Are you a “People Person”?

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I was listening to an executive the other day talk about what he needed in an employee. Of course, there were the job skills and competencies, formal education was one, and then that magical phrase came, “Oh, and the candidates better be a ‘people person’!”

A People Person.

What the living hell does that even mean?

A People Person: A person who enjoys and is particularly good at interacting with others. 

Oh, so like a normal person who isn’t an asshole?

The skill of being “A People Person” might be the most over-valued skill of all time. And not because it’s not important, not one wants you to hire an asshole, but because have you ever met someone who when asked said, “You know, I’m just not A People Person!” No! You haven’t! Everyone, from the beginning of time, says they are A People Person!

The reality is, we ask for it because we know the truth, most people don’t enjoy interacting with others. We put up with idiots we run into every day, some of us are better at than others, no profession really does better than another.

In HR, we like to say, “We the People Person People”, but I find it’s actually the opposite. Most HR pros I run into might have the worst People Person skills, but they are paid to do a job, so put on the act fairly well. Once in a while, you find that true kind soul who seems, almost naively, to get along with everyone. “Oh that Mark, he’s a stinker, but you know he once opened a door for me, he’s good people!” Those people might be only real people persons in the world.

I’ve been labeled A People Person in my career. The reality is I’m an inch deep and a mile wide in terms of my interest, so I just have a skill of finding those few things I have in common with people I meet, so conversation comes easy for me when I meet new people. But, I dislike people at the same rate as others. I would consider myself as much of an asshole as most people, I might just hide it better at the right times.

Maybe that’s the true real skill of A People Person. Not being an asshole at the wrong time. Or at least limiting those times you’re an asshole.

Here’s the thing: The next time you hear someone say or ask for A People Person, just smile and chuckle a bit on the inside, because what they are really saying is “I just want someone who isn’t that much of an asshole” but saying “A People Person” sounds so much more professional!

 

A 30-Minute Commute is All Most People Are Willing to Take!

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We all kind of know this fact. Once you get more than 30 minutes away from your job, no matter how you actually come into work, it starts to feel like a chore. You begin to hate the commute. Doesn’t matter if you drive, take a train, walk, etc. 30 minutes, one-way, is our max!

It’s called Marchetti’s Constant: 

Marchetti’s constant is the average time spent by a person for commuting each day, which is approximately one hour. It is named after Italian physicist Cesare Marchetti, though Marchetti himself attributed the “one hour” finding to transportation analyst and engineer Yacov Zahavi.[1] Marchetti posits that although forms of urban planning and transport may change, and although some live in villages and others in cities, people gradually adjust their lives to their conditions (including the location of their homes relative to their workplace) such that the average travel time stays approximately constant.

I can’t tell you how many times, as a Recruiter, I was talked into believing this wasn’t true by a candidate that then screwed me by ghosting on an interview after driving to the location and seeing it was too long, declining an offer late, started the job but then quickly left because the commute was too long, or we had to over-compensate to make up for the time the person spent on the commute.

Probably one out of one hundred people can actually take a longer commute and live with it. 99% of people will eventually crack if the commute is over thirty minutes. So, what does this mean for us trying to attract talent to our organizations? There are certain locations in the U.S. that are much easier to have a thirty-minute commute than others:

On average, large metro areas with the shortage commute time:

  1. Grand Rapids, MI
  2. Rochester, NY
  3. Buffalo, NY
  4. Oklahoma City, OK
  5. Salt Lake City, UT
  6. Kansas City, MO
  7. Milwaukee, WI
  8. Louisville, KY
  9. Hartford, CT
  10. Memphis, TN

All of these metro areas have the majority of their citizens with a commute time under 30 minutes.

Who have the worst commute times? Think about the largest metro areas, even when you take into account their transit options: New York, San Francisco, D.C., Philly, Boston, Seattle, Chicago, etc.

So, it’s thirty minutes one-way or one hour per day, or five hours per week that the average person is willing to commute. I wonder if this plays itself out when you begin to factor in work from home options?

Let’s say you ask someone to commute one hour each way, two hours per day, but you let them work from home two days per week. Total commute time is still more at six hours per week, but would that make a difference enough to retrain and attract more talent to your organization? I have a feeling it would. It’s worth a test for those who have longer commutes at your work location.

Also, I have seen this done by any company, but I would love to see turnover data by commute time! I have seen data on hourly worker turnover and it’s amazing to see the differences by miles from a worksite in a radiant pattern. Every mile you get farther from the work site, the turnover increases exponentially until you get to about five miles where it skyrockets. So, we know if you hire hourly, low-skilled workers, your best bet for retention is less than five miles from your location (this also is about a 15-minute commute – car, public, walking, bike, etc.).

So often we want to focus on the stuff we control, versus stuff the candidate or employee can control, but we think it’s ‘their’ decision. The problem is, we allow people to make bad decisions and don’t think it will affect us, but it does in high turnover. All things being equal, or close to equal with candidates, take the one with the shorter total commute!